Cellcom Israel’s CEO Discusses Q1 2013 Results – Earnings Call Transcript

Cellcom Israel Ltd. (CEL) Q1 2013 Earnings Conference Call May 13, 2013 9:00 AM ET

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cellcom Israel Ltd. first quarter 2013 results conference call.

All participants are present in listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. (Operator Instructions).

I would now like to hand the call over to Ms. Porat Saar of CCG Investor Relations. Ms. Saar, would you like to begin.

Porat Saar – CCG Investor Relations

Thanks Sadena. I would like to welcome you all to the conference call and thank Cellcom Israel’s management for hosting this call today. With us here are Mr. Nir Sztern, CEO; and Mr. Yaacov Heen, CFO. Mr. Sztern will open by providing a summery of the main highlights of the first quarter 2013 results, followed by Mr. Heen, who will review Cellcom Israel’s financial performance in further detail.

Before I turn the call over to Mr. Sztern, I would like to remind our listeners that in this call management’s prepared remarks contain forward-looking statements, which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions.

Therefore the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995 and in the Israel Securities Law 1968.

Actual results may differ from those discussed today and therefore we refer you to a more detailed discussions of risks and uncertainties in the company’s filings with the Securities and Exchange Commission included under Risk Factors in the company’s Annual Report for the Year Ended December 31, 2012, 20-F filed with the SEC.

In addition, any projections as per the company’s future performance represent management’s estimates as of today May 13, 2013. Cellcom Israel assumes no obligation to update these projections in the future as market conditions change. You should have by now received a copy of the company’s press release. If you’ve not yet received so, please call CCG Investor Relations at 1-646-233-2161.

I would now like to hand the call over to Mr. Nir Sztern. Nir.

Nir Sztern – Chief Executive Officer

Thank you Porat. Good day everyone and welcome to our first quarter 2013 earnings conference call.

As we anticipated, the competitive environment continues to negatively impact our results and we can see the aggressive competition in pricing plans over the past year taking a toll on our profitability. Despite the aggressive marketing campaigns, the pace of net portability of subscribers and new operators declined significantly. Likewise, the churn of post-paid subscribers for Cellcom Israel decreased.

Our focus on operational excellence remains unchanged and its in this area we maintain our impressive results. For the first quarter we continue to streamline our profits used, while leveraging synergies from the merger, achieving savings at an annual rate of over NIS 600 million compared with the end of 2011.

Cellcom Israel customer service continues to be in recognition. In the ministry of communications report for 2012 that was published in April of this year, Cellcom Israel was nominated as the leader of customer service in the cellular industry.

The company has also led the market in innovative fields, with its Cellcom Israel mobile store exhibition. In the full period to time approximately 100,000 visitors due to the most advanced technologies in the world presented in the cellular and electronics exhibit and received hands on experience with innovate gadgets and technologies in the fields of health, finance, photography, gaming and fitness. We expect such exhibits to enhance our brand value and strengthen our stance as a leading cellular operator in Israel.

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