Cellcom Israel revenue dips 2.3 percent in 2011

Telecom Lead Middle East: Cellcom Israel has posted 2.3
percent decrease in revenue to NIS 6,506 million ($1,703 million) in 2011.
However, for Q411, Cellcom’s revenues increased 0.2 percent to NIS
1,665 million ($436 million).


For 2011, net income decreased 36.1 percent
to NIS 825 million ($216 million) and for Q411 the company posted
76.2 percent decrease in net income to NIS 76 million ($20 million).


Revenues from content and value added services
(including SMS) increased 4.9 percent in 2011, representing
approximately 26.4 percent of service revenues.


Revenues from content and value added services
(including SMS) increased 0.7 percent in Q4, representing 31.4
percent of service revenues.


EBITDA decreased 18.7 percent to NIS 2,167 million ($567
million) and EBITDA margin stood at 33.3 percent in 2011, down from 40
percent in 2010.


In 2011, cellular subscriber base totaled approx.
3.349 million in 2011. 3G cellular subscribers reached approx. 1.331
million in 2011, representing 39.7 percent of total cellular subscriber base.


“We believe that our strong basis as a leading
cellular company along with the synergies derived from the merger with
Netvision, will create an advantage that will enable us to endure these market
changes,” said Nir Sztern, chief executive officer of Cellcom Israel


Nir Sztern summarized 2011 as a year of regulatory
changes and increased competition, which eroded the Company’s revenues and


For 2011 results, the company consolidated Netvision’s
financial results as of September 2011, and so, Netvision’s fourth quarter
results are fully consolidated.


“We expect some of the cost savings potential of the
Netvision merger to be reflected in 2012. Netvision’s contribution to EBITDA
for the fourth quarter totaled NIS 63 million. We have updated the
valuation of Netvision and found that there is no need for an impairment of the
goodwill which was recognized following the acquisition of Netvision,” said
Yaacov Heen, chief financial officer. 


Last year, Cellcom announced
that Discount Investment Corporation (DIC), the company’s controlling
shareholder, sold up to 5 percent of the company’s share capital.


DIC entered into an agreement with a financial
institution to sell 3,260,870 shares of Company stock, constituting
approximately 3.3 percent of the company’s issued share capital, for a total
consideration of NIS 300 million in cash.


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