The mobile telephony data for May show Golan Telecom Ltd. ceding more ground, while HOT Mobile Ltd. is strengthening its position. As reported by "Globes" at the beginning of the week, Golan Telecom lost (new subscribers minus those leaving it) nearly 12,000 subscribers, while HOT Mobile gained 5,500 subscribers. Golan Telecom's subscriber losses, which are picking up speed, are moving directly to the profit line of the veteran operators. In other words, as a result of Golan Telecom's weakness, the veteran operators have stopped losing subscribers.
In addition to losing subscribers in net terms, the number of new subscribers joining Golan Telecom has fallen drastically. Before the crisis created by the proposed merger deal with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Golan Telecom was recruiting 25,000-30,000 new subscribers a month, but its number of new subscribers has dropped substantially. Does this mean that the Israeli public is not indifferent to Golan Telecom's move, and regards it as a means of making a killing at the expense of the state, or has Golan Telecom simply stopped offering new bargains, so that the public is no longer knocking on its door, as it did in the past? It should be taken into account that a drop of a few more shekels in the price no longer excites the Israeli public, which will no longer switch networks for this reason when prices are already low.
The trend among the veteran operators is stable. The fact they did not finish the month with a net loss of subscribers may indicate less dramatic pressures on prices. On the other hand, these companies have nothing to hold on to, because the stopping of subscriber abandonment among them is fragile, and any bargain by a new player will mean a net loss of subscribers for them.
The leading trend among the virtual operators is the strengthening of Telzar 019, which is consistently recruiting more and more subscribers, and ended May with 2,300 more subscribers, thereby bypassing Rami Levy Cellular, which recruited 1,000 fewer subscribers than Telzar 019.
Published by Globes [online], Israel business news - www.globes-online.com - on June 1, 2016
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