Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) released its first quarter financials this morning, presenting a 7% drop in revenue in comparison with the first quarter of 2015, to NIS 977 million. Services revenue fell 6% to NIS 710 million while equipment sales revenue fell 9% to NIS 267 million.
The company's EBITDA fell 2% to NIS 222 million and net profit fell 44% to NIS 14 million.
Partner's subscriber base declined by 3% in the quarter to 2.69 million, of which 2.17 million, or 81%, were post-paid subscribers and 518,000, or 19%, were pre-paid.
ARPU (average monthly revenue per user) fell 3% to NIS 67. The decline is attributed to erosion in process because of fierce competition, partly offset by a rise in revenue from the agreement with Hot Mobile on rights to use Partner's network.
In February 2016, following the cancellation of its agreement with France Telecom for the use of the "Orange" brand, Partner rebranded most of its products and services under the "Partner" brand. Partner's churn rate during the first quarter was 11.2%, which compares with 12.7% in the first quarter of 2015 and 11.1% in the fourth quarter of 2015. The churn rate among post-paid subscribers fell while among pre-paid subscribers it rose.
Partner CEO Isaac Benbenisti said, “The first quarter of 2016 was marked by our decision to part with the Orange brand and to launch the Partner brand. This decision was part of a strategic move to transform from a cellular focused company into a full communications group that offers both retail and business customers a variety of communication solutions in addition to cellular services. As part of the changes that the group is undergoing, we intend to unite the fixed line activities of the Partner Group under the Partner brand and, as a result, to cease using the 012 Smile brand in 2017. The unification of the operations under the Partner brand is expected to streamline systems and improve the customer experience. The transition relates to the 012 Smile operations only and does not include the 012 Mobile cellular brand.
"Also during the first quarter, we signed a collective employment agreement with the employees' representatives and the Histadrut New General Labor Organization. The agreement balances between the desire to improve the welfare of the company's employees and the challenges that the company is facing.
"At present, our main challenge is the lack of clarity regarding anticipated regulatory decisions. Only after there is regulatory certainty that creates equal enforcement on all players in the market will we be in a position to invest in an advanced technological infrastructure that may enable the citizens of Israel to enjoy advanced services similar to world trends."
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2016
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