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Cellcom Israel LTD. Announces Israeli MOC Considering Interconnect Tariffs Reduction
NETANYA, Israel, May 5, 2010-- Cellcom Israel Ltd. (NYSE: CEL) (the "Company") announced
today that following the previously reported examination conducted by the
Israeli Ministry of Communication, or MOC, regarding interconnect tariffs
payable by cellular operators, the MOC announced it is considering changes to
the Israeli regulations which set interconnect tariffs among Israeli
operators, as follows:
- to reduce the maximum interconnect tariff payable by a
landline operator or a cellular operator for the completion of a call
on another cellular network from the current tariff of NIS 0.251 per
minute to NIS 0.0414 per minute from August 1, 2010; to NIS 0.0354 per
minute from January 1, 2011; to 0.0311 per minute from January 1, 2012;
to NIS 0.0280 per minute from January 1, 2013; and to NIS 0.0257 as of
January 1, 2014.
- to reduce the maximum interconnect tariff payable by a
cellular operator for sending an SMS message to another cellular
network from the current tariff of NIS 0.0285 to NIS 0.0019 from August
1, 2010; to NIS 0.0017 from January 1, 2011; to NIS 0.0016 from January
1, 2012; to NIS 0.0014 from January 1, 2013; and to NIS 0.0013 from
January 1, 2014.
- the tariffs do not include VAT and will be updated annually from January
1, 2011, based on the change in the Israeli CPI published in November
of the preceding year against the Israeli CPI published in January
2010.
The Company and the other cellular operators may respond to the proposed
changes within 30 days, at which time the MOC is expected to make a final
determination. The Company can not assess at this stage the ultimate outcome
of the hearing and what the final maximum tariffs will be, but it is
reviewing its possible effect on its results of operations. If the changes as
currently proposed are adopted, then, absent any efforts to mitigate the
expected loss of revenues, the currently proposed changes are expected to
have a monthly adverse effect estimated at this stage to amount to
approximately NIS 35 million on the Company's EBITDA and approximately NIS 25
million on the Company's net income, from August 2010. As the Company intends
to take measures to mitigate as much as possible the expected adverse effects
of such proposed changes, through revenue enhancement as well as cost
reduction, the Company cannot estimate at this stage the actual effect of the
changes, if adopted. The Company intends to object strongly to the proposed
changes but cannot predict the ultimate outcome of such objections.
For additional details see the Company's most recent annual report for
the year ended December 31, 2009 on Form 20-F under "Item 3. Key Information
- D. Risk Factors - Risks related to our business - We operate in a heavily
regulated industry, which can harm our results of operations" as well as
under "Item 4. Information on the Company - B. Business Overview -
Competition" and "Government Regulations -Tariff Supervision".
Forward Looking Statement
The information contained in this press release contains, or may be
deemed to contain, forward-looking statements (as defined in the U.S. Private
Securities Litigation Reform Act of 1995 and the Israeli Securities Law,
1969). Said forward-looking statements, relating to the reduction of
interconnect tariffs and its influence on the Company's results of
operations, are subject to uncertainties and assumptions about the outcome of
the aforesaid hearing and the Company's ability to mitigate the expected lost
revenues. The Company's ability to mitigate the expected lost revenues could
lead to materially different outcome than that set forth above.
About Cellcom Israel
Cellcom Israel Ltd., established in 1994, is the leading
Israeli cellular provider; Cellcom Israel provides its approximately 3.292
million subscribers (as at December 31, 2009) with a broad range of value
added services including cellular and landline telephony, roaming services
for tourists in Israel and for its subscribers abroad and additional services
in the areas of music, video, mobile office etc., based on Cellcom Israel's
technologically advanced infrastructure. The Company operates an HSPA 3.5
Generation network enabling advanced high speed broadband multimedia
services, in addition to GSM/GPRS/EDGE and TDMA networks. Cellcom Israel
offers Israel's broadest and largest customer service infrastructure
including telephone customer service centers, retail stores, and service and
sale centers, distributed nationwide. Through its broad customer service
network Cellcom Israel offers its customers technical support, account
information, direct to the door parcel services, internet and fax services,
dedicated centers for the hearing impaired, etc. As of 2006, Cellcom Israel,
through its wholly owned subsidiary Cellcom Fixed Line Communications L.P.,
provides landline telephone communication services in Israel, in addition to
data communication services. Cellcom Israel's shares are traded both on the
New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For
additional information please visit the Company's website
http://www.cellcom.co.il
Company Contact
Yaacov Heen
Chief Financial Officer
investors@cellcom.co.il
Tel: +972-52-998-9755
Investor Relations Contact
Porat Saar & Kristin Knies
CCG Investor Relations Israel & US
cellcom@ccgisrael.com
Tel: +1-646-233-2161
Source: Cellcom Israel Ltd.
Company Contact: Yaacov Heen, Chief Financial Officer, investors@cellcom.co.il, Tel: +972-52-998-9755; Investor Relations Contact: Porat Saar & Kristin Knies, CCG Investor Relations Israel & US, cellcom@ccgisrael.com, Tel: +1-646-233-2161
Cellcom Israel LTD. Announces Israeli MOC Considering Interconnect Tariffs Reduction
NETANYA, Israel, May 5, 2010-- Cellcom Israel Ltd. (NYSE: CEL) (the "Company") announced
today that following the previously reported examination conducted by the
Israeli Ministry of Communication, or MOC, regarding interconnect tariffs
payable by cellular operators, the MOC announced it is considering changes to
the Israeli regulations which set interconnect tariffs among Israeli
operators, as follows:
- to reduce the maximum interconnect tariff payable by a
landline operator or a cellular operator for the completion of a call
on another cellular network from the current tariff of NIS 0.251 per
minute to NIS 0.0414 per minute from August 1, 2010; to NIS 0.0354 per
minute from January 1, 2011; to 0.0311 per minute from January 1, 2012;
to NIS 0.0280 per minute from January 1, 2013; and to NIS 0.0257 as of
January 1, 2014.
- to reduce the maximum interconnect tariff payable by a
cellular operator for sending an SMS message to another cellular
network from the current tariff of NIS 0.0285 to NIS 0.0019 from August
1, 2010; to NIS 0.0017 from January 1, 2011; to NIS 0.0016 from January
1, 2012; to NIS 0.0014 from January 1, 2013; and to NIS 0.0013 from
January 1, 2014.
- the tariffs do not include VAT and will be updated annually from January
1, 2011, based on the change in the Israeli CPI published in November
of the preceding year against the Israeli CPI published in January
2010.
The Company and the other cellular operators may respond to the proposed
changes within 30 days, at which time the MOC is expected to make a final
determination. The Company can not assess at this stage the ultimate outcome
of the hearing and what the final maximum tariffs will be, but it is
reviewing its possible effect on its results of operations. If the changes as
currently proposed are adopted, then, absent any efforts to mitigate the
expected loss of revenues, the currently proposed changes are expected to
have a monthly adverse effect estimated at this stage to amount to
approximately NIS 35 million on the Company's EBITDA and approximately NIS 25
million on the Company's net income, from August 2010. As the Company intends
to take measures to mitigate as much as possible the expected adverse effects
of such proposed changes, through revenue enhancement as well as cost
reduction, the Company cannot estimate at this stage the actual effect of the
changes, if adopted. The Company intends to object strongly to the proposed
changes but cannot predict the ultimate outcome of such objections.
For additional details see the Company's most recent annual report for
the year ended December 31, 2009 on Form 20-F under "Item 3. Key Information
- D. Risk Factors - Risks related to our business - We operate in a heavily
regulated industry, which can harm our results of operations" as well as
under "Item 4. Information on the Company - B. Business Overview -
Competition" and "Government Regulations -Tariff Supervision".
Forward Looking Statement
The information contained in this press release contains, or may be
deemed to contain, forward-looking statements (as defined in the U.S. Private
Securities Litigation Reform Act of 1995 and the Israeli Securities Law,
1969). Said forward-looking statements, relating to the reduction of
interconnect tariffs and its influence on the Company's results of
operations, are subject to uncertainties and assumptions about the outcome of
the aforesaid hearing and the Company's ability to mitigate the expected lost
revenues. The Company's ability to mitigate the expected lost revenues could
lead to materially different outcome than that set forth above.
About Cellcom Israel
Cellcom Israel Ltd., established in 1994, is the leading
Israeli cellular provider; Cellcom Israel provides its approximately 3.292
million subscribers (as at December 31, 2009) with a broad range of value
added services including cellular and landline telephony, roaming services
for tourists in Israel and for its subscribers abroad and additional services
in the areas of music, video, mobile office etc., based on Cellcom Israel's
technologically advanced infrastructure. The Company operates an HSPA 3.5
Generation network enabling advanced high speed broadband multimedia
services, in addition to GSM/GPRS/EDGE and TDMA networks. Cellcom Israel
offers Israel's broadest and largest customer service infrastructure
including telephone customer service centers, retail stores, and service and
sale centers, distributed nationwide. Through its broad customer service
network Cellcom Israel offers its customers technical support, account
information, direct to the door parcel services, internet and fax services,
dedicated centers for the hearing impaired, etc. As of 2006, Cellcom Israel,
through its wholly owned subsidiary Cellcom Fixed Line Communications L.P.,
provides landline telephone communication services in Israel, in addition to
data communication services. Cellcom Israel's shares are traded both on the
New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For
additional information please visit the Company's website
http://www.cellcom.co.il
Company Contact
Yaacov Heen
Chief Financial Officer
investors@cellcom.co.il
Tel: +972-52-998-9755
Investor Relations Contact
Porat Saar & Kristin Knies
CCG Investor Relations Israel & US
cellcom@ccgisrael.com
Tel: +1-646-233-2161
Source: Cellcom Israel Ltd.
Company Contact: Yaacov Heen, Chief Financial Officer, investors@cellcom.co.il, Tel: +972-52-998-9755; Investor Relations Contact: Porat Saar & Kristin Knies, CCG Investor Relations Israel & US, cellcom@ccgisrael.com, Tel: +1-646-233-2161