HOT concludes 2021 with revenues of NIS 3.85 billion from the fixed sector, a decrease of NIS 115 million from last year, along with an increase in revenues from the business sector and the sale of equipment. The stationary sector, which includes television and the Internet, is the main activity of HOT, and the decline in its revenues indicates the continuation of high competition in the field.
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In 2021, the company also experienced an erosion in its profitability dimensions – a 5.3% decrease in EBITDA from about NIS 1.39 billion last year to 1.32 billion this year. The EBITDA rate from revenue now stands at 34%, compared to 36% in 2020. At the same time, the fourth quarter of 2021 is characterized by a certain increase – revenues in the quarter increased by NIS 29 million to NIS 975 million, and EBITDA increased accordingly. NIS 30 million to NIS 365 million in total.
In the operational aspect, the number of customers in the fixed segment decreased by 14,000 customers this year and reaches 1.03 million customers. This is despite the high pace of deployment of IBC’s fiber infrastructure, which already reaches 35% of households.
In mobile, HOT continues its growth trend and ends the year with 139,000 customers, about 19,000 more customers than it had at the beginning of the year. However, despite the increase in the number of customers, Hot Mobile’s revenues amounted to NIS 834 million, about NIS 1 million less than in 2020.
The increase in customers without an increase in revenue indicates that Hot Mobile works extensively to retain and recruit cellular customers, among other things at the expense of its profitability in the field. This trend is unusual in relation to the reports published by the other cellular companies for 2021, in which there was an increase in revenues from the field as a result of a renewed increase in roaming numbers following the return of flights.
This year, HOT increased its investment amounts per year by NIS 38 million, and now stands at 28% Capex Margin less IBC rights acquisition costs. During the fourth quarter, HOT increased its investment by NIS 118 million, partly due to the deployment of optical fibers. The company’s annual cash flow at the end of 2021 was NIS 229 million, about NIS 112 million less than last year.
Because HOT is not a public company, it does not publish its full reports, and its financial data are published as part of the parent company Altis’ reports. As a result, the data is partial and does not tell a complete picture of the company’s operations. The fierce competition in the cellular field for meat, and still fails to leverage the fiber service so that it will increase the revenue of the stationary sector.
Last month, HOT announced its plans for the current year, including the launch of an app with HOT content that can be watched on the basis of smart TVs and other platforms, broadcasting its future TV content in Mavors to VR glasses holders and DEEP LINK service where the customer can choose between HOT and services Additional streaming without switching between apps.
These programs may sound innovative, but the company has been late in launching important technological innovations for its TV platform, and most of its customers still consume cable TV. In addition, the company aims to continue deploying 5th generation infrastructure and reach a nationwide fiber optic deployment by 2025 through IBC. The fact that the company continues to invest large sums in content and increases its fiber deployment will suffice for an advantage in the future, but it is too early to know what price the company will pay for the delay in launching advanced Internet-based TV platforms.