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eliranr
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Founder at Refael Investment Group
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  • What's in the near future of the Israeli cellular industry? 0 comments
    Jan 13, 2012 9:31 AM | about stocks: CEL, PTNR
    In 2 words: FIERCE COMPETITION!!!
    The Israeli government authorized 2 new companies ("Golan Telecom" & "Mirs") to begin operations starting this March.
    Their main competitive advantage:  Unlimited 4G plans at a fixed price.
    (Just for comparison - Cellcom Israel Ltd.(NYSE:CEL), Pelefon and Partner Communications Company Ltd (NASDAQ:PTNR) aren't ready with 4g speeds as of yet)

    On their websites, the new operators promise to reduce the consumers cellular bill by 50% AT LEAST  (compared to the current carriers: Pelefon, Cellcom & Partner).

    Besides Mirs & Golan, more virtual operators will enter the market too.
    As a matter of fact, according to the Israeli news, "Rami Levi Communication" began operations less than 30 days ago and already got over 12,000 new subscribers. Levi claims that his goal is to reach 250,000 new subscribers within the next 2 years.
    In case you wondered, those subscribers are customers who continue to abandon Cellcom, Pelefon and Partner after a decade of misery and outrageous bills as a result of no regulations and no competition in the Israeli cellular market.

    Amos Shapira - Cellcom's CEO for the last 6 years , who is considered THE BEST in the industry, who brought Cellcom to great places LEFT the company.

    Why? Because he also understands that the days of huge profit margins are over, and he couldn't do much about it.

    The consumers in Israel demand justice and after a very long time  the government has a minister who will deliver it, finally.

    If you are holding any Israeli telecom stock because of the high dividend that paid you more than 10% for the last few years or any other reason you should read "Who moved my cheese?"

    In my humble opinion the dividend isn't sustainable and these stocks have much more downside - so be aware and act accordingly.

    I Believe that in the short run we might witness a fake manipulation by market makers - but don't be fooled. The upcoming CC is going to be ugly. VERY UGLY.

    Disclamiser: I'm short CEL

    Themes: telecom Stocks: CEL, PTNR
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