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Cellcom Israel Announces First Quarter 2012 Results

On revenues from Data services as a potential growth engine, Nir Sztern commented: "We continue to deepen our focus on cellular internet growth by introducing data devices, such as the new iPad, for which we were the first cellular company in Israel to introduce this product, as well as sales of a wide variety of tablets and smartphones. Revenues from content and value added services rose 10.9% compared with the first quarter of last year.

"I congratulate the Ministry of Communications for its decision to open the landline market for competition. We see this as an opportunity to grow and strengthen Cellcom Israel's position as a communications group providing a wide variety of solutions to business and private customers. However, the success of opening this market to competition still depends on the active involvement and supervision of the regulator for the benefit of creating competition in the market.  

"We continue to make every effort to ensure that Cellcom Israel is ready to face the challenges expected this year. We are the company with the best consumer conduct  from among the Israeli cellular operators (according to the Public Trust organization), our brand is the leading brand in the cellular market (according to Globes brand index) and we are in the midst of upgrading our network to enable future surfing speeds of up to 84 Mbps.

"I am confident that all these, together with the qualified human resources of the company will assist in continuing our leadership in the coming years."

Yaacov Heen , Chief Financial Officer, commented: "The operational synergy of the Netvision merger and the efficiency measures we implemented at the end of 2011, affected the first quarter of 2012, and demonstrate our efforts to adjust the expense structure to the level of revenues. We did, in fact, succeed to compensate for the decrease in revenues through our noted efficiency measures in the first quarter. In the second quarter of 2012 the impact of revenue erosion will be significantly higher than the effect of further efficiency measures and therefore, we foresee a decline in profitability compared with the first quarter of this year.

"This quarter, we benefited from lower financing expenses as the Consumer Price Index (CPI) remained unchanged. However, in the next quarter, should the market expectations of higher inflation be realized, we anticipate a substantial increase in our financing expenses, which will have a material impact on our net income for the second quarter of 2012, compared with the first quarter 2012.

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