Hot Telecommunication Systems Ltd. (TASE: HOT.B1), controlled by Patrick Drahi, reported a positive year in 2017, with revenue of NIS 4.2 billion, 4% more than in 2016, and net profit skyrocketing 486% from NIS 42 million in 2016 to NIS 246 million in 2017, although most of the improvement in profit is attributable to lower depreciation expenses, rather than to the company's business. EBITDA grew 5% to NIS 1.7 billion.

The growing competition in the multi-channel television market was reflected in Hot's reports; the company's revenue in this category dipped 1% to NIS 3 billion, with EBITDA down 4.6% to NIS 1.5 billion. Average monthly revenue per user amounted to NIS 230 at the end of 2017, NIS 1 less than at the end of the third quarter and NIS 3 less than at the end of 2016. Hot also lost 9,000 triple-play subscribers, its most profitable category, in 2017, including 8,000 in the fourth quarter. The company lost 22,000 television and 8,000 landline telephone subscribers, but gained 6,000 Internet subscribers.

Hot is also registering Next TV subscribers (its Internet television service, designed to compete with Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL)) as subscribers, which means that its loss of conventional cable television subscribers was even greater.

Hot's cable sector revenue totaled NIS 749 million in the fourth quarter, down 1%, compared with the preceding quarter, and its EBITDA fell 2% to NIS 368 million in this segment.

Monthly revenue from mobile subscribers rose

Both revenue and EBITDA rose in the mobile phone segment in both the fourth quarter and in 2017 as a whole. Mobile telephony revenue totaled NIS 1.2 billion, 18.1% more than in 2016, and EBITDA increased by NIS 75 million to NIS 224 million. The company had 1.6 mobile phone subscribers at the end of 2017, after gaining 117,000 subscribers during the year, including 2,000 in the fourth quarter. Average monthly revenue per mobile phone user was NIS 52 at the end of 2017, unchanged from the end of the third quarter and NIS 2 higher than at the end of 2016.

"We have attained a significant achievement in the first quarter of 2018, with positive growth in the number of customers for the first time in eight years, despite growing competition in the communications market. This proves that the company's customers are unwilling to compromise," said Hot CEO Tal Granot Goldstein. "Hot is the only communications group in Israel has grown for the second straight year and that finished 2017 with improvement in all financial measures. Hot Mobile recruited the most subscribers in the mobile phone market for the third straight year, and continues to improve in revenue, all financial measures, and strong growth in end-user equipment sales."

Hot had 1,400 employees at the end of 2017, 17.5% fewer than at the end of 2016.

Published by Globes [online], Israel Business News - www.globes-online.com - on March 19, 2018

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