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Israel’s Cellcom Q3 loss widens as COVID hits roaming revenue

Losses at Israel’s largest mobile phone operator, Cellcom, widened in the third quarter, it said on Monday, blaming a drop in revenue from roaming services due to the coronavirus pandemic.
Cellcom reported a loss of 37 million shekels ($11 million), or 7 cents per share, for the third quarter, versus a 2 million shekel loss, or $0.003, a year earlier.

Revenue rose 3% to 956 million shekels, with service revenue down 2% to 695 million shekels. The decline was offset by a rise in equipment sales.

The results, it said, included the consolidation of smaller rival Golan Telecom, which it bought in August.

Chief Financial Officer Shai Amsalem blamed the profit decline on the COVID-19 crisis, which “caused a sharp decline in roaming revenues from our customers travelling abroad and tourists arriving in Israel”.

Cellcom, which recently received a 5G licence, said its cellular subscriber base jumped 32% in the quarter to 3.641 million from 2.767 million a year earlier due to it gaining Golan customers. The number of customers to its TV service rose 1.6% to 251,000.

The company said it was growing its fibre optics network and now has 80,000 customers, and was working with cable company HOT as partners in the Israel Broadband Company — which has 500,000 households connected — to accelerate fibre network deployment.

“The wide deployment will transform Cellcom Israel from a company that relies on the fixed network of others to a partner in an extensive and independent infrastructure,” said Chief Executive Avi Gabbay, referring mainly to Bezeq, Israel’s largest telecoms group.

He added that the Golan acquisition would significantly contribute to Cellcom’s adjusted EBITDA and free cash flow.

Cellcom opted to forego paying a dividend this quarter. Reuters

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