HOT Mobile Ltd. rode its "couples bargain campaign" (a two-line cellular package for NIS 40 a month) to success in January 2015 with 40,000 new subscribers. Golan Telecom Ltd., the usual leader in new subscribers, added only 27,000 new subscribers.
HOT Mobile launched its new campaign after Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) announced the launching of its new television services. Cellcom, which recently attempted to halt its loss of subscribers with a package combining television and three cellular lines for NIS 199, has had no success thus far. On the day following the launching of this package, Golan Telecom offered a package for NIS 37 a month for the first line and NIS 2 for each additional line. Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) immediately responded with a lifelong cellular package on 012 Mobile at NIS 39 a month. Alon Mobile followed with a package for NIS 15 a month, and Walla Cellular also chimed in with an improved package. In response to the renewed liveliness in the market, the shares of veteran operators Partner and Cellcom plummeted, with shareholders losing hundreds of millions of shekels on their investment.
What caused the success of HOT Mobile's campaign? It was the right bargain at the right price at the right time. The campaign also proved that the cellular market stands apart from other markets; those who linked it other sectors, such as Internet, landline telephony, or television, did not achieve the effect they hoped for. Israeli consumers prefer their attractive cellular package to be independent of other services. That is also the reason why other comprehensive bargains in the past were unsuccessful.
A bad month for the veteran companies
The veteran companies came off poorly in the results of customer churn. The figures show that Cellcom lost the most subscribers (27,000). Despite its bargain campaign, Partner shed 23,000 subscribers, followed by Partner with an 18,000 subscriber loss. Walla Cellular, which surfs on the Pelephone network, therefore could have expected better results in the figures for new subscribers. Its figures, like those of 012 Mobile, are not included in the subscriber mobility statistics. There were not many changes among the virtual operators: Rami Levy recruited far more subscribers than its virtual competitors, thanks to an aggressive bargain campaign, while YouPhone continued to lose subscribers, despite a particularly attractive offer.
YouPhone recently asked the Ministry of Communications to intervene in the matter of fictitious subscriber churn. The company said that it noticed this month that a certain company in the market had recorded fictitious churn of thousands of customers. These were new previously uncounted prepaid customers. This phenomena has created a gap in YouPhone's churn and number of subscribers.
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2015
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