TEL AVIV, June 27 (Reuters) - Partner Communications , Israel’s second-largest mobile phone company, launched a home TV service on Tuesday as part of a plan to generate new income streams in the face of intense competition in the cell phone market. Partner’s revenue and profit have plunged in the wake of a 2012 reform that opened up the mobile market to a host of new players and its new TV service follows a similar move by rival Cellcom two years ago.
Partner TV will be available from July and will cost 69 shekels ($20) a month, or 89 shekels with a subscription to Netflix. It will offer cut-rate packages bundling TV with home phones and internet and may include mobiles later.
Israel’s television market is dominated by cable company HOT and satellite TV firm YES, whose extensive offerings can cost over 300 shekels a month, and analysts say Partner will need to grab up to six percent of the TV market to break even.
While the price is low enough to lure many Israelis to Partner’s new service, critics believe the absence of an HBO channel, which rivals have, could keep those who enjoy “Game of Thrones” and other HBO shows away.
Based on the Android TV operating system, Partner TV will offer 40 Israeli and international channels and a wide range of on-demand TV shows and movies. Viewing will be available on tablets and mobile phones, in addition to a set-top box.
“The market is changing,” Partner Chief Executive Isaac Benbenisti. “We see how people consume content - it’s different. We see the massive movement from traditional TV to the open world.”
“People are looking for open devices to watch Netflix and YouTube,” he told Reuters after a news conference. “We are combining the traditional TV, the traditional way people consume content, with the open world.”
He said that while content was expensive, Partner would be able to keep costs low by using the open Android system and that full-service telecoms firms had to offer packages bundling multiple products together.
“In the United States we are we seeing similar narrow bundles and skinny bundle services and we think Israeli is going to adopt it very quickly,” Partner Chairman Adam Chesnoff said.
Cellcom launched an internet-based TV service of channels and on-demand shows and movies for 99 shekels a month two years ago and it now about 125,000 subscribers.
Barclays analyst Tavy Rosner said Partner’s subscribers would probably come from YES, which has been losing customers.
“Partner will likely need to reach about five to six percent market share to break even on the TV side,” he said. ($1 = 3.5175 shekels) (Editing by David Clarke)