HOT Mobile Ltd. edged out Golan Telecom Ltd. in the mobile mobility sweepstakes in March 2014. The two carriers are neck and neck and the only carriers with positive mobility in the market, but they are paying a heavy price for gaining subscribers, because the large discounts they are offering make it very hard to earn a profit in the long run, while financing the establishment of their networks.
Hot Telecom gained 26,525 new subscribers in March, and lost 18,999 subscribers, for a net increase of 7,526 subscribers. Golan Telecom gained 20,196 new subscribers in March, and lost 14,918 subscribers, for a net increase of 5,278 subscribers
Hot Mobile maintained its recruitment lead in March, thanks to its aggressive discounts and ability to leverage ties with the other activities of Hot Telecommunication Systems Ltd. (TASE: HOT.B1), such as wireline Internet. Customers are buying the NIS 50-60 monthly mobile package with free 100 Mbps home Internet access. This is an offer that Golan Telecom cannot make, and it is reflected in Hot Mobile's edge over its rival.
Both Hot Mobile and Golan Telecom have high churn rates, but because Hot Mobile has far more subscribers, it can absorb the loss of subscribers better than Golan Telecom.
Golan Telecom's launch earlier this week of a new NIS 35 monthly plan was presumably intended to challenge Hot Mobile's lead. The effort seems to have worked, in view of the mobility figures, which show the two carriers close to each other.
The three veteran carriers continue to show dismal mobility numbers. While Pelephone Communications Ltd. and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) show improvement, Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) still has net negative mobility. Even though Cellcom recruited more new subscribers than either Pelephone or Partner in March, it still lost the largest number of subscribers. Although it is the largest of the three veteran carriers, it is paying a very heavy price in its churn rate. Pelephone had the lowest churn rate among the three carriers, but it is also paying a heavy price in discounts and fees to external marketers.
Pelephone gained 43,239 new subscribers in March, and lost 47,934 subscribers, for a net loss of 4,695 subscribers. Cellcom gained 48,935 new subscribers in March, and lost 55,371 subscribers, for a net loss of 6,436 subscribers. Orange franchisee Partner gained 47,629 new subscribers in March, and lost 52,833 subscribers, for a net loss of 5,204 subscribers
Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2014
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