Globes 16-7-2012

Citi: new mobile carriers growing faster than expected
At the current rate, Citi says Hot Mobile and Golan Telecom will win 720,000 subscribers within a year, giving them a 7.7% market share.
16 July 12 15:32, Globes’ correspondent

New mobile carriers Golan Telecom Ltd. and HOT Mobile Ltd. are growing faster than initially expected in the two months since their launch, says Citi Research, in explaining the reaction of the current carriers,. Citi analyst Michael Klahr says that HOT Telecom has picked up 90,000 subscribers and Golan Telecom has picked up 30,000 subscribers, for a joint market share of 1.3%.

Klahr says that, at the current rate, Hot Mobile and Golan Telecom will win 720,000 subscribers within a year, giving them a 7.7% share of the market, since the total number of subscribers is not growing.

Klahr notes that Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) mobile subsidiary Pelephone Communications Ltd. was today the first veteran carrier to break the NIS 100 a month barrier for unlimited calls under its own name. The move follows the launch by Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) of a low-cost plan by its 012 Smile Telecom Ltd. subsidiary on June 25, and Cellcom Israel Ltd’s (NYSE:CEL; TASE:CEL) offer of three lines with unlimited calls for NIS 349 a month on July 4.

Klahr says that Partner and Cellcom will likely react to Pelephone’s move with offers of their own for less than NIS 100 a month, and that Hot Mobile and Golan Telecom may further reduce their own prices. He concludes that the NIS 30 per month difference between the prices offered by the veteran carriers and the new carriers and mobile virtual network operators (MVNO) will narrow over time.

Published by Globes [online], Israel business news – www.globes-online.com – on July 16, 2012