"Half of our customers have taken advantage of our added value services," says a top Cellcom executive.

The source also reveals the company intends to focus on the sale and distribution of added value services to the business sector, but as far as the private sector is concerned, the company will launch these services gradually.

Last year Cellcom increased its market share in the business sector to 44% from the previous 41%, but is still aware of the fact in 2002 it will be a lot harder to maintain client levels, to recruit new customers and to manage the subscriptions to the company's three networks, GPRS, TDMA and CDPD.

The cellular operators' revenue growth rate is expected to decrease this year as new subscribers use mostly pre-paid services, and voice services are going down in price.

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The only way to compensate for this decrease is to increase revenues on added value services.

Launching 2.5G
This year all of the three major cellular operators will launch their 2.5G generation networks and commence marketing the added value services on these networks. Revenues from value added services come to about 1% to 2% of total revenues, and it is clear the applications for the various target audiences will be carefully chosen.

Revenues from data communications (including SMS) are expected to reach 4% to 5% this year. In Europe, added value services are predicted to total 17% of the total revenues of cellular operators. Cellcom predicts that in 3 to 4 years its revenues from added value services will come to 205 of its total revenues.

Cellcom repeatedly announced its intentions to hold on to its TDMA network for the next seven or eight years. Market entities are doubtful Cellcom will continue to support its TDMA network for such a long time to come, and attribute the announcements to Cellcom's efforts to ward off pressure from its customers to make a rapid switch to GPRS. Cellcom in any case plans to transfer only profitable customers to GPRS.

The TDMA network today constitutes 7% of all cellular networks in the world, a number which is expected to decrease in the next few years in favor of the GSM And CDMA networks.