2Q10 Israel Mobile Operator Forecast, 2009 – 2014: Israel will have 10.5 million mobile phone subscribers in 2014 with Cellcom taking market share of 37.3%

• Publication date: May 2010

IEMR’s Mobile Operator Forecast on Israel provides over 50 operational and financial metrics for the Israeli wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 4Q2011. Operators covered for Israel include: Cellcom Israel Ltd., Pelephone, Partner Communications Co. Ltd., an...

IEMR’s Mobile Operator Forecast on Israel provides over 50 operational and financial metrics for the Israeli wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 4Q2011. Operators covered for Israel include: Cellcom Israel Ltd., Pelephone, Partner Communications Co. Ltd., and Mirs Communications Ltd. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

IEMR’s Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.

Executive Summary

Total wireless subscribers in Israel to reach 10.5 million in 2014

• As an increasing number of mobile phone users own multiple SIM cards, we expect that the number of subscriber accounts in Israel will increase from 9.5 million in 2009 to approximately 10.5 million in 2014.
• The largest operator will continue to be Cellcom; we expect that Cellcom's subscriber base will increase from 3.29 million to 3.92 million over the forecast period, 2009 - 2014.
• We also expect that, by the end of 2014, Pelephone will have 2.99 million subscribers and Partner (Orange) will have 3.18 million subscribers.

Cellcom's subscriber market share will be increasing over the next five years

• We think that Cellcom will continue to lead Israel's wireless market. We forecast that Cellcom's subscriber market share will increase from 34.7% in 2009 to 37.3% in 2014.
• Although Partner will continue to be the second largest mobile operator in Israel after Cellcom, we expect that Partner's subscriber market share will decline slightly from 32% in 2009 to about 30% in 2014.
• Our model forecasts that the subscriber market share of Mirs Communications will remain at approximately 4% over the next five years.

ARPU levels will be stable from 2010 to 2014

• We think that overall ARPU declines in Israel have stopped. Our model predicts that the industry average monthly ARPU will remain in the range of ILS 142 - ILS 143 over the next five years.
• We expect that monthly ARPUs at Cellcom, Pelephone, and Partner will be approximately ILS 144, ILS 133, and ILS 149 respectively in 2014.

EBITDA margins in Israel's mobile operator space will be declining slightly

• We forecast that EBITDA margins (calculated as EBITDA/service revenue) will be decreasing across operators over the next five years.
• Our model predicts that Cellcom's EBITDA margin will decrease from about 45.2% in 2009 to 43.5% in 2014.
• Also, we expect that EBITDA margins at Pelephone and Partner will be declining over the next five years to reach 39.5% and 40.6% respectively in 2014.

Wireless Technology Industry in Israel

Companies Covered in this Country Mobile Operator Forecast
Cellcom Israel Ltd.
Pelephone
Partner Communications Co. Ltd.
Mirs Communications Ltd. (For Mirs, only the subscriber data is available.)

Annual Results & Forecasts for each of the above operators is covered in this report for: CY 2001-CY 2014. Quarterly Results & Forecasts are covered for: March 2003 - December 2011

PREPAID AND POSTPAID SUBSCRIBERS
SUBSCRIBER GROWTH (YoY)
SUBSCRIBERS BY OPERATOR
SUBSCRIBER GROWTH BY OPERATOR (YoY)
NET SUBSCRIBER ADDS BY OPERATOR
NET SUBSCRIBER ADDS GROWTH BY OPERATOR
MONTHLY CHURN BY OPERATOR
POST-PAID SUBSCRIBERS BY OPERATOR
POST-PAID SUBSCRIBER GROWTH BY OPERATOR (YoY)
PREPAID/WHOLESALE SUBSCRIBERS BY OPERATOR
PREPAID/WHOLESALE SUBSCRIBER GROWTH BY OPERATOR
POST-PAID % OF TOTAL SUBSCRIBERS BY OPERATOR
PREPAID/WHOLESALE % OF TOTAL SUBSCRIBERS BY OPERATOR
POST-PAID NET ADDS BY OPERATOR
POST-PAID ADDS GROWTH BY OPERATOR (YoY)
PREPAID/WHOLESALE NET ADDS BY OPERATOR
PREPAID/WHOLESALE ADDS GROWTH BY OPERATOR
MONTHLY ARPU BY OPERATOR
MONTHLY ARPU GROWTH BY OPERATOR (YoY %)
DATA % OF SERVICE REVENUES BY OPERATOR
MONTHLY DATA ARPU BY OPERATOR
DATA ARPU GROWTH BY OPERATOR (YoY)
MONTHLY VOICE ARPU BY OPERATOR
VOICE ARPU GROWTH BY OPERATOR (YoY)
VOICE REVENUE PER MINUTE BY OPERATOR
VOICE REVENUE PER MINUTE GROWTH BY OPERATOR (YoY)
MOU PER SUBSCRIBER BY OPERATOR (MINUTES/MONTH)
MOU/SUBSCRIBER GROWTH BY OPERATOR (YoY %)
SHARE OF TOTAL SUBSCRIBERS BY OPERATOR
HHI INDEX BY SUBSCRIBER SHARE
SHARE OF NET ADDS BY OPERATOR
SHARE OF POST-PAID NET ADDS BY OPERATOR
SHARE OF PREPAID/WHOLESALE NET ADDS BY OPERATOR
SHARE OF SERVICE REVENUE BY OPERATOR
HHI INDEX BY SERVICE REVENUE SHARE
YoY CHANGE IN REVENUE SHARE BY OPERATOR
REPORTED REVENUE BY OPERATOR (REPORTING CURRENCY)
SERVICE REVENUE BY OPERATOR (REPORTING CURRENCY)
EBITDA BY OPERATOR (REPORTING CURRENCY)
CAPEX BY OPERATOR (REPORTING CURRENCY)
SERVICE REVENUE GROWTH BY OPERATOR (YoY)
EBITDA GROWTH BY OPERATOR (YoY)
EBITDA/REPORTED REVENUE BY OPERATOR
EBITDA/SERVICE REVENUE BY OPERATOR
EBITDA/INCREMENTAL SERVICE REVENUE BY OPERATOR
CAPEX/REPORTED REVENUE BY OPERATOR
CAPEX/SERVICE REVENUE BY OPERATOR
(EBITDA-CAPEX)/REPORTED REVENUE BY OPERATOR
EBITDA MARGIN EXPANSION/CONTRACTION BY OPERATOR
REPORTED REVENUE BY OPERATOR (USD)
ARPU BY OPERATOR (USD)
DATA ARPU BY OPERATOR (USD)
VOICE REV/MINUTE BY OPERATOR (USD)
SERVICE REVENUE BY OPERATOR (USD)
EBITDA BY OPERATOR (USD)
CAPEX BY OPERATOR (USD)

Mobile Phone in Israel

Israel Number Of Mobile Phone Subscribers/100 Inhabitants

• $ 250
• Industry data
• February 2013

Yearly, From 2003 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Mobile Telephony
• Countries : Israel

Israel Number Of Mobile Phone Subscribers/100 Inhabitants, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2004 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Mobile Telephony
• Countries : Israel

Israel Prepaid Mobile Phone Subscribers/100 Inhabitants

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2011
By Business Monitor International
Source: BMI, operator results

• Industries : Mobile Telephony
• Countries : Israel

Israel Prepaid Mobile Phone Subscribers, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2006 To 2011
By Business Monitor International
Source: BMI, operator results

• Industries : Mobile Telephony
• Countries : Israel

Israel Number Of Mobile Phone Subscribers/100 Fixed Line Subscribers

• $ 250
• Industry data
• February 2013

Yearly, From 2003 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Mobile Telephony
• Countries : Israel

Wireless Technology in Israel

Israel Mobile Phones, 3g Handset Sales, Mn

• $ 250
• Industry data
• February 2013

Yearly, From 2006 To 2016
By Business Monitor International
Source: BMI research

• Industries : Phones and Pda, Wireless Technology
• Countries : Israel

Israel 3g & 4g Market As % Of Entire Mobile Market

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Wireless Technology
• Countries : Israel

Israel Wireless Service And Wireless Equipment Revenues, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2006 To 2011
By Business Monitor International
Source: BMI, operator results

• Industries : Wireless Technology
• Countries : Israel

Israel Number Of 3g & 4g Phone Subscribers, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2006 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Wireless Technology
• Countries : Israel

Israel Number Of Cellular Mobile Phone Subscribers, % Change Y-o-y

• $ 250
• Industry data
• February 2013

Yearly, From 2004 To 2017
By Business Monitor International
Source: World Bank (International Telecommunications Union - ITU), operators, BMI

• Industries : Mobile Telephony, Wireless Technology
• Countries : Israel