Operator: Ladies and gentlemen, thank you for standing by. Welcome to Cellcom's Third Quarter 2020 Results Conference Call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Cellcom's Investor Relations team at GK Investor & Public Relations at 1-646-688-3559 or view it in the News section of the company's website www.cellcom.co.il. I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin, please?
Ehud Helft: Yes. Thank you, operator. I would like to welcome all of you to Cellcom Israel third quarter 2020 results conference call. And I would like to thank management for hosting this call today. With us here on the call are Mr. Avi Gabbay, the CEO; and Mr. Shai Amsalem, the CFO. Mr. Gabbay will open by providing a summary of the quarter results. Mr. Amsalem will review the financials. We'll then open the call for any questions that you may have. Before I turn the call over to Mr. Gabbay, I would like to remind our listeners that in this call management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties and management may make any additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995 and in Israeli Securities Law of 1968. I note that, actual results may differ from those discussed today and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company's filing with the Securities and Exchange Commission, including under Risk Factors in the company's annual report for the year ended December 31, 2019, filed under Form 20-F, which was filed on March 23, 2020 with the SEC. In addition, any projections as to the company's future performance represents management's estimated review. Cellcom Israel will assume no obligation to update these projections in the future as market conditions change. I would now like to hand over the call to Mr. Avi Gabbay. Avi, go ahead please.
Avi Gabbay: Thank you, Helft. Good day to all of you, and welcome post Golan. Following, the closing of the Golan deal at the end of August, Cellcom enhances its position as Israel's largest mobile service provider with 3.6 million subscribers. The deal strengthens Cellcom Israel's position as the leading communication company in Israel, and we expect Golan to contribute to our adjusted EBITDA and free cash flow. I would like to welcome both the new employees to Cellcom Group, as well as all Golan customers that will now benefit from being part of the larger Cellcom family. Another important milestone that happened in the quarter is the investment agreement with the HOT Telecommunication to invest in IBC, our fiber network infrastructure subsidiary. Through our partnership, with the Israel Infrastructure Funds, which is still pending regulatory approvals, HOT's entry would significantly strengthen IBC market position as a fiber optic company that would service a significant portion of the market.
Shai Amsalem: Thank you, Avi, and good day to you all. I will provide you with a summary of our results. The details can be found in the press release we issued earlier today. This quarter we consolidated for the first time the result of Golan Telecom, but only for one month as the acquisition was completed at the end of August. Revenues for the third quarter of 2020 totaled to ILS956 million compared with ILS928 million reported in the third quarter of last year. Out of those, the service revenues were ILS695 million, 2% below the ILS709 million reported in the third quarter of last year and the revenues from equipment were ILS261 million, 19% above the ILS219 million reported in the third quarter of last year. Due to, among others, the increase of the online activities, though this type of revenue carry a lower profitability. In addition I would like to note that the fixed-line segment service revenue grew 5% over the third quarter of last year to ILS327 million. This increase resulted mainly from the net increase in the revenues from Internet and TV services. Cellular revenues were ILS414 million compared with ILS439 million in the third quarter of last year. The main reason for the decline is the absence of roaming revenues incoming and outgoing due to the lack of international travel.
Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question-and answer session. The first question is from Tavy Rosner of Barclays. Please go ahead.
Chris Reimer: Hi. This is Chris Reimer on for Tavy. Thank you for taking my question. First, if we could talk a little bit about the cellular market, we saw your announcement about Xfone. Can you give us more color about the situation and what it means in terms of potential financial impact on Cellcom if they don't pay and potentially go out of business?
Avi Gabbay: Okay. As you mentioned, the Xfone failed to pay the monthly payments that should have been paid at the beginning of the month. We don't really understand the reason they didn't pay. They actually said that there are issues regarding the agreement between us that we tend to complete. We don't accept it. We don't really understand or cannot now, for the meantime, give any expectations about what we're going to do with it or what's going to happen with it? I believe that, very soon, we will know and report about this.
Chris Reimer: Okay. And regarding fiber, can you go over the agreement between HOT and the IBC. And just looking at the big picture, do you think – sorry, there's a risk of overbuild maybe with competition, does it get 80% and partner going full speed ahead with IBC as well deploying?
Avi Gabbay: Well, we see it, as you know, we see the IBC deal that we did with HOT is very, very important and significant issue for us. You have to understand that today, as for now, you can see that Cellcom and partner are kind of second-tier in the fixed-line market means that HOT and Bezeq has the facilities across the country and we have some limited facilities across the country. And this deal with HOT will allow us to be part of the network that will be deployed all over the country and actually we're going to be part of Tier 1 and not Tier 2. That's why we see it as very important. It will allow us an access to fiber optic over the country in a price that the over infrastructure pace not some of that has leased on this infrastructure. So, it's going to give us the advantage in the competition between us and otherwise.
Chris Reimer: Okay. Thank you. That’s helpful.
Operator: There are no further questions at this time. Mr. Gabbay, would you like to make your concluding statement?
Avi Gabbay: Yes. Thank you very much. And I would like to thank all of you for joining our conference and your continued interest in our company. I look forward to hosting you again in our next call. Have a good day.
Operator: Thank you. This concludes the Cellcom Israel Ltd. Third Quarter 2020 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.