Golan Telecom Ltd. left its rivals in the dust in April 2014, recruiting 23,000 new subscribers, net, thanks to its NIS 35 per month plan that dragged the market into a bitter price war. Rival Hot Mobile Ltd. recruited just 7,500 net new subscribers in April.
The monthly figures show that Golan Telecom is the pacesetter in the market, dictating the strength of competition. When the carrier increases its discounts to gain market share, as it did in April, it goes all out, and has a massive impact on all the carriers without exception, especially on the mobile virtual network operators (MVNOs). Conversely, when prices of mobile plans are over NIS 50, customers are pickier.
April was a very hard month for the MVNOs. YouPhone Ltd. took the biggest hit, recruiting just 114 net new subscribers, and had a high churn rate. YouPhone has the fastest growth among the MVNOs in the past year, and its poor performance in April is surprising. Rami Levy Cellular Ltd., which had a temporary jump in March, had positive net recruitment of subscribers in April, but far fewer, even though it benefited from its new NIS 35 monthly plan announced ahead of Passover.
Among the veteran carriers, April was characterized by strong customer movement in the haredi (ultra-orthodox) community, mainly in the direction of Golan Telecom, which launched a special plan for haredim. Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) had the biggest churn as a result. Although Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) had the highest number of recruitments, it too had a high churn rate. In total, it lost fewer subscribers than the other veteran carriers.
The April mobility figures also show that for the veteran carriers, swinging to a loss is no longer an impossibility. Although they are profitable, the NIS 35 monthly plans will result in a new crisis, which they may not be able to survive.
Published by Globes [online], Israel business news - www.globes-online.com - on May 1, 2014
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