The high churn rate of HOT Mobile Ltd. continues to be troubling, despite the attractive packages the company offers. This is what caused Hot Mobile to drop to second place in the net new subscribers chart (new subscribers minus subscribers left the company), clearing the way for Golan Telecom Ltd. to step up to first place, thanks to its lower churn rate.
Hot Mobile’s churn rate is very high. The company attracted 33,000 new subscribers last month, but lost 24,000 - a net increase of 8,900. It is safe to assume that the impressive number of new subscribers is thanks to Hot Mobile’s aggressive sales, which include very low prices, like all the mobile operators, but it’s hard not to wonder if perhaps Hot Mobile is not doing enough to retain its existing customers, because the effort the company puts into expanding its subscriber base comes with very high costs.
Thus Golan, which continues to retain its ever-low prices, recruits many fewer new subscribers than Hot Mobile, but because of its much lower churn rate, it managed to have a higher net new subscriber rate. Golan Telecom had a total of 14,000 net new subscribers in April.
In the battle between the veteran companies, Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) continues to lose more subscribers than Pelephone Communications Ltd. (which loses the fewest) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). Though the discrepancies are not terribly dramatic, the biggest problem facing the veteran players is still the continued loss of customers to Hot Mobile and Golan Telecom. Partner lost a net 9,400, Pelephone lost 6,200, and Cellcom lost 8,600.
Published by Globes [online], Israel business news - www.globes-online.com - on May 3, 2015
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