JERUSALEM, May 14 (Reuters) - Cellcom, Israel’s largest mobile phone operator, reported a 77 percent drop in quarterly net profit, weighed down by a one-time expense for a voluntary retirement programme and as fierce competition in the sector continued.
Cellcom said on Thursday it earned 26 million shekels ($6.8 million) in the first quarter, compared with 114 million a year earlier. Excluding a 30 million shekels expense for the retirement programme, Cellcom made a profit of 51 million shekels.
Revenue dipped 6 percent to 1.062 billion shekels, led by a drop in service revenue but partly offset by revenue from equipment sales. The company, though, is banking on a newly launched television service to boost future revenue.
Israel’s mobile phone industry was shaken up in 2012 with the entry of six new operators, sparking a price war that led to steep drops in subscribers, revenue and profit at Cellcom and two incumbent rivals.
Cellcom lost 82,000 subscribers in the January-March period, with its base declining to 2.885 million.
The company’s board opted not to distribute a dividend for the first quarter.
$1 = 3.8281 shekels Reporting by Steven Scheer