Tue Aug 14, 2012 4:42pm IST–Israel’s two largest mobile phone operators Cellcom and Partner Communications are planning television-over-Internet services as weak earnings highlighted their need for profitable new earnings streams.

Haim Romano, Partner’s chief executive, said on Tuesday the company was working to accelerate TV Internet services. “Once the conditions are ripe, Partner will offer an innovative, quality and attractive solution also in this area,” he said.

Cellcom CEO Nir Sztern also said he was examining Internet TV as well as an entry to the cellular credit card business.

The two companies need new revenue streams to adapt to a rapidly changing telecoms landscape. Cellcom, Israel’s largest mobile operator, Partner, the No. 2 operator, and Bezeq unit Pelephone had dominated the sector for more than 12 years until six new operators entered the market this year.

That led to a price war, including unlimited calling plans at $25 or less, in which hundreds of thousands of customers switched to new discounted services. HOT’s new mobile service for instance attracted 250,000 customers in 10 weeks.

Any new Internet TV ventures would need regulatory approval but Israel’s communications minister has pushed for such services to sharply lower consumers’ bills to around 100 shekels ($25) a month, from some 250 shekels charged by cable company HOT and satellite TV provider YES, a unit of Bezeq.

Cellcom and Partner, which operates under the Orange brand, said new competitors and a government mandate in early 2011 to slash call connection fees had forced them to take efficiency measures. Partner has cut 2,100 employees since last October.

EFFICIENCY SAVINGS

Cellcom said its measures such as lowering headcount and reducing expenses had led to savings of 300 million shekels a year. It also won a tender to supply 60,000 army personnel with mobile services.

Its shares were up 3.7 percent in afternoon trading in Tel Aviv, clawing back from a 61 percent decline so far in 2012 and 45 percent drop in 2011. Partner shares, down 60 percent in 2012 and 53 percent in 2011, bounced 6.8 percent…Read More>>

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