Partner Communications Company Ltd.
Q1 2021 Earnings Call Transcript

Published: 26 May 2021

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Partner Communications First Quarter 2021 Results Conference Call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Gideon Koch. Please go ahead.

[Gideon Koch:]

Thank you, and thank you to all our listeners for joining us on this conference call to discuss Partner Communications' first quarter results for the year 2021. With me on the call today is Isaac Benbenisti, Partner's CEO; and Tamir Amar, our CFO and VP Fiber-Optics. Isaac will provide an update on Partner's business developments and an overview of our results for the first quarter. He will then hand over to Tamir, who will provide a more detailed discussion of our quarterly financial and operational results. And finally, we'll move over to the Q&A.

[Isaac Benbenisti:]

Thank you, Gideon. Good day, everyone, and welcome to our earnings conference call. Partner ended the first quarter of 2021 with subscriber growth in all our operational areas. The company's revenues returned to the levels of the period prior to COVID-19 despite the continued closed skies and full lockdown for a significant part of the quarter. In the cellular segment, the focus on our customer loyalty and the investment in 5G supported the continued organic growth of the subscriber base, which totaled ILS 2.9 million at the end of the quarter with a churn rate of 6.8%, the lowest rate in the last decade. We are continuing with the rapid rollout of Partner's independent fiber optic infrastructure across the country and have reached big -- and have recently begun to deploy in municipalities characterized by low raised buildings and single dwelling units. The Partner Fiber infrastructure already reaches more than 840,000 households as of today, of which 545,000 raised in buildings already connected to the infrastructure. As of today, 165,000 households are subscribed to Internet services over Partner's fiber optic infrastructure, representing a 30% penetration rate from potential customers in connected buildings.

[Tamir Amar:]

Thank you, Isaac. In the first quarter of 2021, we returned to revenues growth compared also to the corresponding period last year, while maintaining the same level of OpEx, excluding the ILS 20 million government-mandated refund we received in the first quarter of 2020. The fixed-line segment, despite the continuing decrease in international call activity, continued to flourish such that its revenue growth more than offset the revenue loss in the cellular segment due to the near complete absence of roaming services. At the same time, we were able to increase revenues from equipment sales despite the third lockdown period during the quarter, while also improving gross profit from equipment sales. We continue to expand our subscriber base in the cellular and fixed-line segments alongside the expansion of the rollout of the 5G cellular network and the fiber optic network that we believe will continue to provide us with substantial growth engines also in the coming years. Our cellular subscriber base totaled 2.9 million at quarter end, the highest level for over six years. Over the quarter, the cellular subscriber base increased by 67,000, of which 13,000 were subscribers of data packages and 8,000 were subscribers of voice packages provided to students with a fixed 12-month package by the Ministry of Education as part of their COVID-19 program. Even excluding these subscribers, the increase in postpaid subscribers totaled 32,000 this quarter, a growth rate that illustrates Partner's strong position in the Israeli communications market. The churn rate in the quarter amounted to 6.8% compared to 7.5% in the corresponding quarter last year. ARPU in the quarter totaled ILS 48 compared to ILS 53 in the corresponding quarter last year. The decrease mainly reflecting the decline in roaming services revenues as a result of the sharp decline in international travel due to COVID-19. The combination of these factors lead us to conclude that in an apples-to-apples comparison, which excludes roaming services revenues from cellular service revenue, a positive trend change and growth in revenue can be discerned.

[Operator:]

Mr. Benbenisti, would you like to make your concluding statements.

[Isaac Benbenisti:]

Yes. Thank you. Just a very short statement saying to all of you, thank you for a wonderful 6 years. Thank you for being with us. Thank you for believing on us. It was a unique time for me, and I anticipate to the company a very bright future. So thank you very much, everybody.

[Operator:]

Thank you. This concludes the Partner Communications first quarter 2021 results conference call. Thank you for your participation. You may go ahead for disconnect.