KIRYAT ONO, Israel, Aug 9 (Reuters) - Partner Communications , Israel's second-largest mobile phone operator, said on Wednesday it would push ahead with the development of a nationwide high-speed fibre optic network to make it more of an integrated multi-service telecoms group.
Partner's revenue and profit has plunged in the wake of a 2012 reform that opened up the mobile market to a host of new players that sharply brought down prices.
As a result it has sought to join the worldwide industry trend towards offering so-called multi-play packages of mobile and fixed line telephony and internet services and last month launched a new internet-based TV service offering cut-rate packages in partnership with Netflix.
In the past few months Partner has also connected up about 30,000 homes to its ultra-fast fibre network in 20 cities, mainly in the centre of the country including Jerusalem and Tel Aviv. These customers receive Internet speeds of up to 1 gigabit per second, 10 times what is currently available elsewhere.
"By the end of the year we will more than double what we have done now," Partner's Chief Executive Isaac Benbenisti told a news conference in reference to the 30,000 homes which have been hooked up to fibre so far.
To cover all of Israel would take "four to five years," he said.
Although Israelis can receive Internet speeds of up to 100 megabits, the country averaged just 13.7 megabits per second in the first quarter for 33rd place globally, according to the most recent Akami State of the Internet report.
With profits low, Partner will pay for expanding its fibre optics network to customers' homes through cost cutting measures and increasing its debt, Benbenisti told Reuters.
In May Partner reported a first-quarter net profit of 51 million shekels ($14 million), a 264 increase from a year earlier and its best quarter in more than a year.
"We are not looking to do dividends," Benbenisti said. "We are rearranging the capital structure of the company."
Last month Partner raised some 250 million shekels in a public bond offering. At the end of the first quarter, its net debt stood at 1.42 billion shekels ($395 million), down from 2.1 billion shekels a year ago.
The increased debt load is needed, Benbenisti said, "in order to be ready to invest in projects that will create the future of the company."
Partner is competing with Bezeq Israel Telecom, the largest telecoms group in Israel, which is also in the process of developing a nationwide fibre network. ($1 = 3.5986 shekels) (Editing by Greg Mahlich)