Yesterday (Sunday), something happened in the Israeli cellular market. Partner's request to the Ministry of Communications demanding that it stop The fourth generation frequency auction, andCellcom's appeal The Antitrust Authority to stop the Hot Mobile's promotionOn a cell phone, they can be considered a warning sign.
Cell phone Although it did not file a complaint or contact the antitrust authority, it is in exactly the same predicament. The old cellular companies expect to have a very serious problem this year, and they are calling for a rethinking of the regulatory conditions that allowGolan Telecom AndHot Mobile Sell the same mobile product for a quarter of the cost.
It is possible to estimate that in the foreseeable future one of the companies will run into some kind of distress, and the question right now is whether to continue the same policy and not intervene - that is, allow the market to do its thing - or try to create order in the chaos and control it.
Want more news, videos and stories? Join the Haredim 10 WhatsApp channel >>
The question is which of the two options will cause the least amount of harm to the industry and to us as consumers. After all, even the potential collapse of a cellular company could have a heavy price.
2015 opened with a storm of fierce cellular competition, and it could be that the start of the year is a harbinger of what is to come. Today joined the celebration of promotionsYouPhone, which announced Today (Monday) on the sale of a cellular package for 15 shekels per month, for a period of six months.
We usually report on the results of the competition, as reflected in mobility data, once a month, but this time it's worth checking how the aggressive promotions of the past two weeks have affected the market.
It is important to note that the biggest beneficiaries of competition are the customers, and that among the cellular companies there are those who lost and those who lost less. After all, no cellular company can profit from selling a cellular package at a price of 20 shekels per month.
chain reaction
Here's a quick reminder that explains the market shake-up: At the end of December CellcomLaunched Its television. Hot Mobile, which feared that the move would harm Hot, responded with a campaign that included a payment of 40 shekels per month for two cellular lines and an Internet provider.
The chain reaction was not long in coming, andGolan Telecom responded with an operation which offers 2 shekels per line, for those who pay 37 shekels per month for their first line. The one who joined later is partner, which offered 012 Mobile customersA 39 shekel lifetime sale, thatarrested Only two days later.
It is important to mention that as part of the television launch, Cellcom is selling the television and 3 cellular lines for NIS 198 per month. Cellcom's strategy is to connect the two products and retain cellular customers by offering them an affordable and attractive package.
The migration map of the last two weeks presents an instructive picture that shatters some of the early assumptions of some companies. In the last two weeks since the outbreak of competition (Cellcom launched TV on December 29, and the data is calculated from December 28 for convenience until the end of last week), Golan Telecom, for example, recruited a net (new customers minus those who abandon) 14,459 customers. Hot Mobile, on the other hand, recruited a net 9,145 subscribers.
What happened to the old cellular companies in those crazy two weeks? Cellcom has lost 7,966 net subscribers since the launch. Despite the difficult picture, it is impossible to judge Cellcom's move yet, and it takes time to see whether it is a success or a failure, because customers have not yet internalized Cellcom's entry into television.
What happened to Partner, whose campaign led to sharp declines in the shares of the media companies? The orange company lost 8,968 net subscribers in two weeks. This means that its campaign was a resounding failure and did nothing to help it, neither to stop churn nor to recruit new customers. Time will tell whether the company's campaign was successful or not.
It turns out that most of the customers who joined the campaign came from Partner and its subsidiary, 012 Mobile. Partner has suffered a double blow in the past two weeks: it has eroded its average income, and its stock has lost about 15% - a loss of nearly half a billion shekels.
Pelephone, despite making an effort to maintain market share at the cost of eroding revenue, lost 7,648 net subscribers. Here too, it can be seen that Wala Cellular, which serves as Pelephone's marketing arm and offers discounted packages, did not really help it.
Although it lost fewer subscribers than Cellcom and Partner, Pelephone was hit just as hard, considering that Pelephone is the smallest player among the three oldest companies in terms of subscriber numbers. However, it is worth noting that Pelephone decided not to participate in the "New Year's Eve celebrations" and did not respond directly to the promotions of the other competitors.
Where is the business going?
Among virtual operators, the beginning of the year reflects what we saw throughout last year: these companies have effectively ceased to be relevant, and they rely mainly on the option of tailgating Golan and Hot.
It's pretty clear that Rami Levy serves as Pelephone's marketing arm, and because he rides on its network, he brings it revenue that helps it cope with the fact that Hot Mobile stopped using its network this year.
YouPhone sits on Pelephone's network, but unlike Rami Levy, it actually lost 1,282 customers. It's possible that the mid-month figures are what led the company to launch the campaign this morning, to show that it's still in the game.
So if we want to make an interim summary and try to guess what will happen here during the year, we can estimate that the trend of pressure on prices from Golan and Hot Mobile will continue in 2015. Both companies are interested in bringing about a market collapse and taking over the old companies. From their perspective, the sooner they do it, the better.
Continuing this price war and bloodshed will be difficult for them, so they are trying to speed up the process. If Partner and Cellcom go into losses - and this is a very real scenario, especially if interest rates rise - one of the shareholders in the old cellular companies will have to ask himself where the business is going from here, and what is the point of continuing this mutual bloodshed.
