"Globes" has obtained figures from the Ministry of Communications which show that Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has lost the largest number of subscribers in January-September, weighted for churn between the mobile carriers, as competition in the market takes hold.
Cellcom lost a net 31,287 subscribers in January-September, recruiting 254,765 subscribers but losing 286,053. The numbers at its two main rivals, Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) subsidiary Pelephone Communications Ltd. and Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) are the opposite. Partner recruited a net 24,930 subscribers in January-September, recruiting 266,001 subscribers and losing 241,071; Pelephone recruited a net 20,690 subscribers, recruiting 270,557 subscribers and losing 269,867.
The churn rate is projected to increase over the coming year with the entry of new mobile carriers and mobile virtual network operators (MVNO) into the market, and Cellcom will have to figure out how to halt its subscribers from abandoning it.
Cellcom used to claim that most subscribers who left it had multiple numbers who preferred to wait for their contract period to expire before leaving, instead of paying a fine for early termination of the line. Since the Ministry of Communications banned exit fines earlier this year, this is no longer an issue for subscribers. The ministry's decision could boost the churn rate to 20% a year - similar to the rates in Western countries.
Published by Globes [online], Israel business news - www.globes-online.com - on November 17, 2011
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