Israel's Bezeq Telecom to reach 1 million homes with fibre optic in 2021

By Steven Scheer

JERUSALEM (Reuters) - Bezeq Israel Telecom reported lower quarterly profit on Wednesday and said it was advancing a plan to merge two business units to cut costs and ramping up deployment of a fibre-optics network.

Bezeq, Israel's largest telecoms group, earned 299 million shekels ($92 million) in the first quarter excluding one-time items such as a 125 million shekel capital gain from the sale of real estate, compared with 325 million shekels a year earlier.

Revenue rose 1.6% to 2.2 billion shekels, boosted by a 3.5% gain in internet and cloud and digital services revenue.

Bezeq said its deployment of an ultra-fast fibre optics network had reached 480,000 homes. Chief Executive David Mizrahi said he expected to reach 1 million households by the end of 2021.

The company repeated its forecast of net profit of 1.0 billion shekels in 2021 after reporting a profit of 796 million in 2020. Bezeq said its board approved a merger of its satellite TV business YES and ISP subsidiary Bezeq International "to strengthen their operations through the sale of triple play bundles and to deepen the synergies and efficiencies of the subsidiary companies."

Once a state-owned monopoly, Bezeq had until now been barred from offering discounted packages of phone, TV and internet unlike its smaller rivals.

Bezeq's Pelephone business, Israel's third-largest mobileoperator, recorded a quarterly profit of 8 million shekels,versus a 2 million shekel loss a year earlier. Revenue slipped0.5% to 570 million shekels while its subscriber base rose to2.492 million from 2.356 million.

Rival Partner Communications posted a 50% decline in first-quarter net profit and Cellcom last week recorded its first profit since 2018. Cellular firms have been hurt by the lack of revenue from roaming services as Israel's borders have been shut to foreigners.

Even before the pandemic, mobile phone operators had struggled to remain profitable after a shake-up of Israel's mobile phone industry in 2012.

($1 = 3.2460 shekels)

(Reporting by Steven Scheer; Editing by Edmund Blair)