UPDATE 1-Israeli Cellcom moves to Q1 loss, revenues decline

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TEL AVIV, May 28 (Reuters) – Israel's largest mobile operator, Cellcom, reported a first-quarter loss, the group said on Tuesday, citing intense competition and eroding prices for cellular services.

CEO, Nir Sztern, said the company had been able to expand its business in fixed-line services, but that "the intensity of competition in the cell segment continues to have a negative impact on the results of this segment ".

Cellcom recorded a net loss of 16 million shekels ($ 4.4 million) for the quarter, which is in line with the forecast of a Reuters poll and compared to a net profit of 7 million a year ago.

The turnover fell by 0.5% to 928 million shekels, but exceeded the forecast of the Reuters survey of 907 million shekels.

The Israeli mobile phone industry was shaken in 2012 with the arrival of many new operators, triggering a price war that resulted in a sharp drop in the number of subscribers, revenues and profits Cellcom and other incumbents.

Last year, Cellcom agreed to buy 70% of Israel Broadband Co (IBC), which holds the exclusive right to deploy fiber optic on infrastructure owned by the public company Israel Electric Corp. This month, she signed a contract with Netflix for the distribution of entertainment service on its Cellcom TV platform.

It predicts that 750,000 households will have access to its fiber optic network by the end of 2022.

Cellcom's mobile subscriber base grew by 1.1 percent year-on-year to $ 2.853 billion, but revenue per subscriber declined 9 percent in the first quarter.

Cellcom launched a low-cost Internet TV service in 2015 that it said had attracted 227,000 subscribers by the end of the first quarter, up 23.4 percent over the previous year. It also has 278,000 customers for its Internet services, up 18.3% from a year ago.

Mr Sztern also hoped that an agreement reached with the Cellcom workers' union during the quarter would reduce spending and would have "a cumulative positive effect of about 54 million shekels on adjusted EBITDA. of the company for the years 2019-2020 compared to the previous collective agreement ". (1 $ = 3.6074 shekels) (Report by Ari Rabinovitch, edited by Steven Scheer and Susan Fenton)