"Globes" reveals figures today indicating that Israel's wireless operators earn NIS 400-500 million a year from the Palestinian market. The aggregate revenue of Cellcom, Partner Communications (Nasdaq: PTNR; TASE: PTNR; LSE: PCCD), and Pele-Phone Communications Ltd. is NIS 15 billion a year, which means that the Palestinian market accounts for 3% of revenue.
Israel's wireless operators prefer to keep quiet about their activities in the Palestinian market. Officially, the see it as an optional extra, but the figures reveal that it is an inexhaustible source of revenue and profit for Israel's wireless operators. The Palestinian market has 500,000-700,000 subscribers, almost 10% of Israel's wireless operators' aggregate number of subscribers. All Palestinian customers are prepaid subscribers, buying dialing cards for a predetermined number of call minutes.
As a result, there is no relationship between the user and operator, and neither party has any obligations toward the other. This method is very convenient for Palestinian customers, who would not be able to obtain a handset otherwise. It is also convenient for Israel's wireless operators, who are physically incapable of providing services for Palestinian customers.
Average revenue per user (ARPU) for Palestinian customers is very low, at about NIS 50 per month, a quarter of the ARPU of Israeli customers. Cellcom is the strongest Israel's wireless operator in the Palestinian territories, with almost half the market. Partner also has widespread activity, while Pele-Phone has the smallest market share.
Published by Globes [online], Israel business news - www.globes.co.il - on February 15, 2005