Fixed line fuels Bezeq 1Q profit rise
Israeli telco Bezeq Group grew net profit by close to 50% year-on-year in the first quarter, despite an overall fall in revenues during the period.
The telco’s 43% increase in net profit to 582 million Shekels (€117 million) was fuelled by a strong performance from its fixed line division, and a drop in the carrier’s overall operating expenses during 1Q12. However, those successes weren’t translated into revenue, with the group’s sales down 5.9% year-on-year to 2.7 billion Shekels.
Finance chief and deputy chief executive, Alan Gelman, says top line growth in the fixed line business was “primarily driven by demand for broadband access speed upgrades,” on its next generation network infrastructure, along with higher transmission and data sales. However, he notes the growth was offset by lower sales at Bezeq’s Pelephone mobile business, “which was negatively influenced by regulatory changes enacted in 2011” and strong competition.
Net profit at the fixed line business grew 182.9% year-on-year to 348 million Shekels, however Pelephone’s income slipped 30.3% to 216 million Shekels. Bezeq International, the telco’s internet and ICT business, generated a profit of 36 million Shekels in 1Q12 compared to 46 million in 1Q11, while its Yes TV unit remained in the red with a 64 million Shekel loss – though that is almost 10 million Shekels lower than its loss in 1Q11.
Bezeq Chairman Shaul Elovitch says the first quarter results bear testament to the telco’s “strategy of long-term investments in advanced infrastructure,” amid increasing competition in its domestic market.