Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) on Monday posted its first-ever net profit.

The company said that revenues and market share continued to rise in the second quarter, bringing net income of NIS 25.2 million, or 14 agorot per share. In the parallel quarter of 2001 it had lost NIS 44.7 million.

Partner, Israel's second-largest cellular provider, said its revenues rose 24% from the parallel quarter to NIS 991.6 million, compared with NIS 796.9 million in the second quarter of 2001.

Its subscriber base grew by over half a million subscribers in last 12 months to 1.7 million at the end of June. Its market share climbed to 28% from 24% a year earlier, the company said.

For the first six months of the year, Partner posted net income of NIS 2.4 million, or NIS 0.01 a share, compared with a net loss of NIS 181,000, or NIS 1.01 per share, last year.

Its subscriber abandonment rate stood at 1.6% in the second quarter, including provision for subscribers who generated no income whatsoever in the last half-year,

Partner CFO Alan Gelman said the company expects its subscriber base to continue growing in 2002, even though penetration rates are already quite high. The pace at which new subscribers join might slacken, he added. He also noted that the abandonment rate might climb on intensifying competition between Israel's three key cellular operators Partner, Cellcom and Pele-Phone Communications, a subsidiary of the state-run Bezeq phone company.

The company's second-quarter results, mainly its financing costs, were heavily impacted by changes in shekel-dollar exchange rates, Gelman said. He added that the company believes it can command enough resources including bank credit for its third-generation network investments without need to raise further financing in the near future.

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