Cellcom Israel Announces Filing Lawsuit Against Sharing Network Partner

Rhea-AI Summary

Cellcom Israel Ltd. (NYSE: CEL) has filed a lawsuit against its cellular sharing network partner, Xfone, for breach of payment obligations amounting to approximately NIS 34 million. The lawsuit, presented to the Tel-Aviv District Court, seeks enforcement of their network sharing agreement and includes a request for an interim injunction to prevent Xfone from signing conflicting agreements. The company cannot currently predict the lawsuit's outcome, which could significantly affect its revenue, as detailed in its 2019 annual report.

Positive

• Filed lawsuit may enforce collection of unpaid dues, potentially stabilizing revenue.
• Interim injunction could prevent loss of future agreements, protecting business interests.

Negative

• Potential financial instability if the lawsuit does not favor Cellcom, risking revenue losses.
• Breach of agreement indicates underlying issues in business partnerships, affecting investor confidence.

NETANYA, Israel, Feb. 8, 2021 /PRNewswire/ -- Cellcom Israel Ltd. (NYSE: CEL) (TASE: CEL) (hereinafter: the "Company") announced today that following its previous announcements regarding Marathon 018 Xfone Ltd.'s, or Xfone, the Company's cellular sharing network partner, breach of its monthly payment obligations under the sharing network agreement and annulment notice of the agreement which Company rejects, the Company filed today a lawsuit against Xfone and its controlling shareholder for the enforcement of the network sharing agreement and payment of unpaid monthly payments in the amount of approximately NIS 34 million, with the Tel-Aviv District Court. The Company further filed for an interim injunction to prevent Xfone from entering any contradicting agreement to the network sharing agreement with the Company.

At this stage, the Company cannot assess the outcome of the proceedings.

For additional details regarding the materiality of the network sharing agreement on the Company's results, see the Company's 2019 annual report on Form 20-F, dated March 23, 2020, under "Item 3. Risk Factors - Our network sharing agreements consideration constitute a significant portion of our revenues" and Item 4. Information on the Company – B. Business Overview – Networks and Infrastructure – Network sharing agreements" and the Company's current reports on Form 6-K dated November 16, December 9, 2020 and January 31, 2021.

About Cellcom Israel

Cellcom Israel Ltd., established in 1994, is a leading Israeli communications group, providing a wide range of communications services. Cellcom Israel is the largest Israeli cellular provider, providing its cellular subscribers with a broad range of services including cellular telephony, roaming services, text and multimedia messaging, advanced cellular and data services and other value-added services in the areas of  mobile office, data protection etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates advanced networks enabling high-speed broadband and advanced multimedia services. Cellcom Israel offers nationwide customer service including telephone customer service, retail stores, and service and sale centers. Cellcom Israel further provides OTT TV services, internet infrastructure and connectivity services and international calling services, as well as landline telephone services in Israel.  Cellcom Israel's shares are traded both on the New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For additional information please visit the Company's website http://investors.cellcom.co.il.

Company Contact Shai Amsalem Chief Financial Officer investors@cellcom.co.il Tel: +972-52-998-4774

Investor Relations Contact Elad Levy Investor Relations Manager investors@cellcom.co.il Tel: +972-52-998-4774

 

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SOURCE Cellcom Israel Ltd.

FAQ

What is the lawsuit filed by Cellcom Israel (CEL) about?

Cellcom Israel has filed a lawsuit against its partner Xfone for unpaid monthly payments under their network sharing agreement.

How much money is Cellcom (CEL) seeking in the lawsuit against Xfone?

Cellcom is seeking approximately NIS 34 million in unpaid monthly payments.

What impact could the lawsuit have on Cellcom Israel's (CEL) business?

The outcome of the lawsuit may significantly affect Cellcom's revenue, depending on whether the court enforces the payment.

When was the lawsuit against Xfone filed by Cellcom (CEL)?

The lawsuit was filed on February 8, 2021.

What does the interim injunction sought by Cellcom (CEL) entail?

Cellcom is seeking an interim injunction to prevent Xfone from entering conflicting agreements.