Israel's Partner Comms Q3 profit drops less than expected


TEL AVIV, Nov 19 (Reuters) - Partner Communications, Israel's second-largest mobile phone operator, posteda 65 percent drop in third-quarter net profit as the companyfaces increased competition and an erosion in prices.

Net profit fell to 38 million shekels ($11 million) from 110million a year earlier as revenue decreased 15 percent to 1.12billion shekels, Partner said on Tuesday. Net profitwas up from 20 million shekels in the second quarter.

The company was forecast in a Reuters poll of analysts toearn 30.8 million shekels on revenue of 1.13 billion.

Israel's mobile phone industry was shaken up last year withthe entry of six new operators, sparking a price war - withunlimited calling plans for $25 a month or lower.

"I am encouraged by the initial signs of improvement in thebusiness environment," Partner Chief Executive Haim Romano saidin a statement.

The results for the third quarter reflect Partner'sinvestments in customer service and infrastructure as well asthe adjustment of its cost structure to one appropriate formarket conditions, he said.

The company reduced operating expenses by 97 million shekelsin the quarter and invested 116 million shekels mainly inimproving its network and information technology systems.

Its subscriber base fell 3 percent from a year earlier to2.95 million.

Cellcom, Israel's biggest mobile phone operator, posted a 58percent drop in third quarter net profit to 52 million shekelsand a 15.5 percent decline in revenue.

Pelephone, a unit of Bezeq Israel Telecom, reporteda 9.1 percent drop in quarterly profit and a 9.7 percent fall inrevenue.

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