Revenues at Cellcom, Israel's largest cellular operator, rose 0.5 percent in the second quarter year-on-year to NIS 1,608 million despite the challenging economic and tourism environment hitting roaming revenues.

"This quarter Cellcom continued to present growth in revenues, operating and net profit and cash flow, as well as steadily increasing and improving its subscriber base operating in a challenging competitive environment, highly regulated and turbulent macro-economic environment. This macro-economic environment mainly affected our roaming revenues, as inbound and outbound tourism continued to be impacted by the global economic slowdown," said Cellcom CEO Amos Shapira. "This effect of the decrease in roaming revenues was entirely offset by the rapidly growing demand for content and value added services, which increased by over 30% this quarter, as well as land line services in which we continue to present a significant growth almost without adding to the company's costs due to the existing synergy to our core business.

Total Revenues from services increased 0.7% to NIS 1,420 million. Revenues from content and value added services (including SMS) increased 30.6%, represent 14.7% of services revenues. The monthly average revenue per user for the second quarter decreased 3.5% and totaled NIS 143.7, compared to NIS 148.9 in the second quarter on 2008. This decrease was, among others, the result of the lower roaming revenues recorded during the second quarter following the decline in tourism.

EBITDA for the second quarter 2009 totaled NIS 637 million, or 39.6% of revenues; and net income for the second quarter 2009 reached NIS 277 million. Basic earnings per share for the second quarter 2009 reached NIS 2.82.

Shapira added that ongoing efficiency measures this quarter enabled Cellcom to further reduce operating expenses, as well as operating expense as a percent of revenues, and to present growth in both operating and net income and cash flow.

"In the quarter we have launched, in a primary launch in Israel, the "Android" by Samsung with Google's operating system and in the near future we will launch the iPhone by Apple," said Shapira.

Subscriber base increased approximately by 20,000 during the quarter, mostly post-paid subscribers. Cellcom has a 34% market share of subscribers and over 3.2 million subscribers. Cellcom started its operations in 1994 using a TSMA network.