The investors who looked into the possibility of purchasing the controlling interest received an indication that the high debt is not an obstacle if Harpo and the flights continue to grow.
Cellcom estimates that the average income per subscriber will increase by several shekels in the next 3 years, and thus the company will be able to overcome its high debt problem. These estimates were given to the investors with whom the company met as part of the attempt to find a buyer for the shares of the company controlled by Discount Investments.
● Doron Cohen, CEO of DSKSH, also wants to change from a senior manager to a controlling shareholder
● Partner increases the price of the TV package by 40%
According to one of the sources who was interested in Cellcom, the message conveyed by the company was that the price increase in the market had begun, but the same source was not impressed by this. According to him, the company will have to go through streamlining processes, which is not certain that can happen against the background of the hawkish committee in the company. Cellcom has a debt of NIS 2.5 billion and one of its risk factors is the question of whether additional interest rate increases will apply in the near future, which may have a negative effect on it.
The fifth generation packages are expensive, but no change in experience
We will explain that 5 shekels in the average income when the group has 3.5 million subscribers, produces an increase of tens of millions of shekels per year and in the longer term even more because the transition process is gradual. At the same time, Cellcom has already started selling packages for NIS 35 per month instead of NIS 29 for packages that are not fifth generation. It is the gradual transition to fifth generation packages that makes the difference, and what happens in the field is that the customers who purchase an advanced device that supports fifth generation, the company also tries to sell them the compatible package that costs more.
In practice, in Israel the fifth generation has no meaning, because at the moment the deployment of the fifth generation is clearly insufficient and does not produce a significant change in the user experience, but many customers are still tempted to take the package for the more expensive fifth generation.
We will explain that the development that Cellcom is talking about is also supported by other companies in the market who expect that the transition to the fifth generation, at the same time as the slowdown in roaming, will result in cell phone prices rising. It is important to emphasize at the same time that this coming Thursday the WECOM company, which replaces Expon Cellular which operated the WE4G brand, is expected to present its marketing plans and launch its renewed activity.
The big question is whether WECOM will try to recapture market shares through low prices or whether it will create added value through integrated packages with Internet and the like, but in any case its entry in a new Acetla will increase the competition and expand it and not the other way around.
Another point that Cellcom sees as a bright spot for investors is of course the issue of returning flights and the expected increase in revenues from international roaming services. From this point of view, the sight of tens of thousands of flights at Ben Gurion Airport is very encouraging for the companies.