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By Steven Scheer
JERUSALEM, Nov 20 (Reuters) – Bezeq Israel Telecom missed estimates with a 27 percent decline in third-quarter profit that was hurt by a decrease in net profit in the cellphone service unit and the Internet and said it would move forward with the restructuring plan.
Profits fell to 234 million shekels ($ 63 million) from 322 million a year earlier, Israel's largest telecommunications group said on Tuesday, coming below the 255 million expected by analysts in a Reuters poll.
Revenues slipped 4.7 percent to 2.3 billion shekels, not far from the 2.34 billion expected by analysts.
"Quarterly results reflect the impact of the growing competitive environment," said Chief Financial Officer Yali Rothenberg.
The company repeated 2018 estimates for a 1.0 billion shekel net profit.
Bezeq is being investigated for alleged securities violations and is part of the company's overhaul.
In August, he said he planned to combine several of his businesses to cut costs. Under the proposal, which still requires regulatory approval, Bezeq will combine the cellular telephone business, satellite TV and Internet service providers – Pelephone, YES, and Bezeq International. Its fixed-line business, which controls much of Israel's telephone and Internet infrastructure, will remain separate.
Bezeq said he had not received an answer from the Ministry of Communications regarding his plan.
Chairperson Shlomo Rodav said Bezeq had launched negotiations with unions about reducing work on Pelephone, Bezeq International and YES.
"We continue to believe that there is significant value to open at Bezeq and we believe that the launch of an upcoming strategic plan will help rebuild investor confidence and pave the way to resume shares," said Barclays analyst Tavy Rosner. .
Bezeq shares have risen 16.5 percent since announcing plans on August 23.
Rodav said the company is ready to deploy its fiber optic network but is discussing with regulators how best to proceed. Bezeq seeks wholesale price guarantees and other issues to ensure project profitability.
Net income at Pelephone, Israel's third-largest mobile telephone operator, fell 75 percent to 6 million shekels, while its customer base slipped to 2.185 million from 2,475 million a year earlier.
Bezeq, Israel's former telecommunications monopoly, began to face stronger competition in 2015 after the government opened the market to small rivals offering cheaper but more limited services.
$ 1 = 3.7032 shekels
Reporting by Steven Scheer; edited by Tova Cohen and Jason