Partner Communications Company Ltd. (PTNR) Q3 2011 Earnings Call November 23, 2011 10:00 AM ET Executives Gideon Koch – Manager, Revenues-Finance Department Haim Romano – CEO Ziv Leitman – CFO Analysts Michael Klahr – Citibank Richard Gussow – Deutsche Bank Darren Shaw – UBS Presentation Operator
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are contained in Partner’s press release dated November 23, 2011, as well as Partner’s prior filings with the US Securities and Exchange Commission on Forms 20-F, F-1 and 6-K, as well as the S-3 shelf registration statement, all of which are readily available. Please note that the information in this conference call related to projections or other forward-looking statements is subject to the previous Safe Harbor Statement as of the date of this call.For your information, this call is being broadcast simultaneously over the Internet and can be accessed through our website at www.orange.co.il. I will now turn the call over to Partner’s CEO, Haim Romano. Haim? Haim Romano Thank you, Gideon. Good morning to everyone in US and good afternoon to everyone elsewhere. First, it’s my first conference call. I’m the CEO of Orange in the last six weeks. And it’s a great pleasure to be here again, as you well know, I was one of the founders of the company in ‘98 and left the company in 2005, and now I have the privilege to be here again as the CEO of the company. What we can see here is continuing of the trend of the first half of the year. The final – the financial results of the third quarter reflect the impact of the regulatory change, including a reduction of the interconnect tariff together with increasing of the competition in the cellular market. These two operational conditions require Partner to prepare and act accordingly while maintaining the company assets and improving operational processes. My first and most pressing task is to refocus on the organizational towards the customers. Partner has long tradition of treating the customers as one of its main assets. We will continue to take all measures, all necessary steps and action in order to safeguard these key strategic assets. We are implementing now a number of measures aimed to improve the interface of the customer satisfaction and simplicity, and then to increase the customer satisfaction. We expect them to step – improve level of customer service and be well known as the best customer service in Israel as we used to be before. The changes ahead of us are not easy to take, but we are persistent and we’re going to do it the way that we did it before and we are sure that we can do it again.
We also remain focused on long-term needs for the company. As part of these measures, we’re going to intend – we’re going to invest in improving the network and invest in IT systems.Regarding 012 Smile, we continue to work toward maximizing the synergy between the two companies. At the same time, we are beginning to integrate carefully measure or partner with – or – into Smile. Our vision remains one of which Partner as a group offers the customer wide array of service in areas of cellular and fixed telephony. Okay. With that said, I would now like to hand the call over to Ziv Leitman, our CFO. Ziv Leitman Thank you, Haim. As Haim said, our results continue to reflect the impact of the reduction in interconnect tariff and strengthened competition in the cellular market. Cellular service revenue decreased by 25% from ILS 1.4 billion in the third quarter of 2010 to ILS 1.1 billion in the third quarter of 2011. This decrease mainly reflects the reduction in interconnect tariff effective January 1, 2011, which reduced cellular service revenue in the quarter by approximately ILS 282 million. Excluding the impact of the reduction in intercompany tariff, service revenue would have decreased by 5%, reflecting ongoing price erosion and ILS 26 million of one-time provision made in the quarter for lawsuits filed against the company. Read the rest of this transcript for free on seekingalpha.com