Internet boosts Bezeq quarterly net by one third
But Q3 earnings fall short of analysts' expectations, while cellphone revenues fell.
Bezeq reported a 31% rise in quarterly net profit, boosted by record revenue from Internet services and cost-cutting measures that offset declines in the increasingly competitive mobile phone sector.
Bezeq reported net profit of NIS 449 million in the third quarter, up from NIS 342 million a year earlier. Revenue slipped 3.8% to NIS 2.4 billion due to a decline in cellular revenue.
Nevertheless, the telecoms company failed to meet analysts' forecasts of NIS 452.6 million earnings on revenue of NIS 2.35 billion, according to a Reuters poll. Bezeq shares fell as much as 3.5% in Tel Aviv Stock Exchange trading before recovering to a close of NIS 6.49, a delcine of just 0.2% for the day.
Bezeq's mobile unit Pelephone posted a 9.1% fall in profit to NIS 140 million on a 9.7% drop in revenue. Pelephone, Israel's third-largest mobile operator, saw its subscriber base slip 5.5% to 2.683 million.
Pelephone and its two main competitors are engaged in a price war following a shake-up of Israel's mobile phone industry last year that ushered in six new operators.
Competition in the telecoms sector also led to a 3.3% drop in the number of Bezeq's active fixed-line subscriber lines, even as it continued to gain customers for its high-speed Internet services. The company posted a 6.7% rise in the number of Internet subscribers and a 14.1% increase in Internet revenue.
Bezeq International posted record quarterly revenue as it recruited Internet customers for its new submarine cable.
Bezeq reaffirmed its forecast of net profit of between NIS 1.7 billion 1.8 billion for all of this year and earnings before interest, tax, depreciation and amortization, or EBITDA, of NIS 4.25 billion to NIS 4.35 billion.
"We are meeting our ambitious deployment targets for our optical fiber network and look forward to the anticipated publication of the LTE frequency auction, which will enable us top operate a 4G (fourth generation) network," Chairman Shaul Elovitch said.