Haaretz 24-10-2012

Mobile newbies count 500,000 subscribers

Five months in the business HOT adding subscribers at rate of 2,000 daily.

The upstart mobile carriers Golan Telecom and HOT Mobile say they have together signed up half a million customers in the five months that they have been operating.

HOT Mobile, which went live on May 14, said this week it had 350,000 subscribers, while Golan Telecom reported having 150,000. As of August 13, then last time Hot reported its user numbers, it had 250,000 subscribers, which means that that the company has been signing up an average of 2,000 customers a day since it opened for business.

“We plan to turn ourselves into a key player in the cellular market and ensure that the benefit to consumers is for the long term,” said Yaakov Nadborny, Hot Mobile’s CEO.

The company, formerly known as MIRS, has two advantages over Golan: It offers additional services such as Internet and has MIRS’ existing customer base. As an enticement to new subscribers, the company said this week that it  will offer two months of free service, by imposing charges on new accounts from January 1, it said.

MIRS had long been a small player in a field dominated by Israel’s big three  Bezeq’s Pelephone unit, Partner Communications and Cellcom Israel. MIRS and Golan Telecom won the Communication Ministry’s tender to set up cellular networks using GSM technology, which allowed French telecom entrepreneur Michael Golan to enter Israel’s playing field and gave MIRS an opportunity to become a larger player.

In an effort to introduce greater competition into the field, the Communications Ministry also allowed virtual cellular operators  which buy airtime in bulk from companies that have physical networks  to enter the field. As a result, prices have dropped precipitously. Under the tender terms, both Golan Telecom and Hot Mobile posted bank guarantees worth hundreds of millions of shekels. They will receive their guarantees back if they achieve a 7% market share  the equivalent of 500,000 customers  within five years. MIRS had initially predicted it would take three years to reach the 7% benchmark.

So who’s losing out?

Cellcom has been hit hardest by the rival mobile carriers, while Pelephone has emerged the least scathed of the big three. During the week of October 11-18, for example, Hot signed up 5,800 new customers and Golan, 4,200. Meanwhile, Cellcom lost 5,700; Partner, 2,800; and Pelephone, 1,800. These figures comprise only customers who transferred an existing phone line; they do not include those who ordered a new number.