Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) today reported sharply lower revenue and profits for the third quarter of 2012, due to lower prices, loss of subscribers, and a halving of equipment sales.
Revenue fell 25% to NIS 1.32 billion ($336 million) for the third quarter from NIS 1.75 billion for the corresponding quarter of 2011. Net profit fell 36% to NIS 110 million ($28 million) from NIS 172 million for the corresponding quarter.
Service revenue fell 16% to NIS 1.15 billion ($294 million) for the third quarter from NIS 1.34 billion for the corresponding quarter. Mobile service revenue fell 17% to NIS 892 million from NIS 1.07 billion, due to continuing price erosion of cellular services, including voice and data services, following the entry of new competitors in the first half of 2012, lower roaming services revenue, and a loss of 6% of its mobile subscribers over the preceding year. Fixed-line service revenue fell 13% to NIS 296 million from NIS 341 million, due to the loss of subscribers and lower prices.
Equipment sales fell 57% to NIS 165 million for the third quarter from NIS 385 million for the corresponding quarter, due to increased competition, lower market demand following heavy smartphone sales in 2011, and more stringent payment terms.
Cash flow from operations fell by 4% from NIS 513 million in the third quarter of 2011 to NIS 491 million in the third quarter of 2012, although free cash flow was barely changed at NIS 375 million.
Partner's churn rate rose to 10.4% in the third quarter from 7.2% in the corresponding quarter, with the loss of 56,000 subscribers during the quarter to 3.04 million subscribers. The churn rate for September was lower than that for July and August, the months immediately after new carriers and mobile virtual network operators (MVNO) entered the market. Partner's share of the mobile market fell to 30% at the end of September from 31% at the end of June.
Average revenue per user (ARPU) fell 13% to NIS 97 per month in the third quarter from NIS 111 per month in the corresponding quarter, but minutes of use per subscriber rose 11% to 457 minutes per month from 410 minutes.
Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2012
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