Bezeq The Israel Telecommunication Corp. Ltd (BEZQ) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to Bezeq's Fourth Quarter and Full Year 2020 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and broadcasted over the web. At this time, I would like to turn the call over to Mr. Naftali Sternlicht, Investor Relations Manager for Bezeq. Mr. Sternlicht, please go ahead.

Thank you, operator. Welcome, everyone, and thank you for joining us on the call today. With us from Bezeq Group's senior management team, we have Mr. Gil Sharon, Bezeq's Chairman; Mr. Dudu Mizrahi, Bezeq's Fixed-Line CEO; Mr. Ran Guron, CEO of Pelephone, Bezeq International and yes; and Mr. Or Moses, Bezeq Group's Head of Finance and Capital Markets. Before we start, I would like to draw your attention to the safe harbor statement on Slide #2 which also applies to any statement made during today's call. The speaker's comments will generally follow the slide presentation, which is available under the Slides tab on the webcast link and may also be downloaded from Bezeq's IR website. You can go through the presentation by clicking on the arrows on the left or right-hand side. Let me now turn the call over to our Chairman, Mr. Gil Sharon for prepared remarks. Or will then continue the presentation of the group financial highlights followed by Dudu discussing Bezeq fixed line results. Ran will pick up with the results of our subsidiaries, after which management will be available to answer questions.

Thank you, Naftali, and hi, everyone. Let's start with Slide #3 talking about our group's strategic vision, which has always been to be the leader of the Israeli telecommunication market, providing a full range of products and services for the residential and the business market, while striving for better operating results. To ensure that we are constantly fulfilling this vision, we have implemented strategies in key areas of technology, business, regulation and human resources. On the technology front, we lead the Israeli telecommunication market by investing in high-quality and advanced infrastructure as well as the provision of quality and efficient service. Currently, we're focused on fiber optics and 5G mobile network as our growth engines. We aim to optimize the balance between market share and profitability, both for fixed line as well as subsidiary companies, while maintaining strong financial positions and exploring new business development areas. We continue to strive for regulatory removal of structural separation, which will allow the full merger of the company so that we can improve customer service, strengthen competitive capabilities and create shareholders' value. Our human resources, we continue to engage and align management and employees to create value through incentives and compensation while striving to provide managerial flexibility and response time. Turning to Slide #4. On the financial side, we met our 2020 guidelines in all categories. Adjusted EBITDA declined only slightly year-over-year, despite the decrease in revenues of ILS 200 million, mainly from the impact of COVID-19 on roaming revenues at Pelephone. The stability in adjusted EBITDA was due to an increase in revenues in the fixed line business and significant cost-cutting at the subsidiaries. Adjusted net profit increased by 25% year-over-year, primarily due to decrease in finance expenses in Bezeq Fixed-Line. Free cash flow amounted to almost ILS 1.5 billion, an increase of ILS 110 million year-over-year, allowing us to continue to reduce the group's net financial debt. At Bezeq Fixed-Line, we grew revenues for the first time in 5 years, while continuing to improve operating metrics. At the subsidiary companies our streamlining measures lead to continued decrease in operating expenses. Pelephone continued to grow its postpaid subscriber base. And yes, made a significant improvement in the free cash flow. We also made progress on the regulation front. The Knesset approved the fiber optics deployment outline and the Ministry of Communication hearing with the intention to allowing Bezeq Fixed-Line to offer unified broadband services. A few words about strategy. The past few months marked the beginning of strategic turnaround for Bezeq Group, where we focused on intensive preparation due to changes that the telecom market is undergoing. The spirit of our strategy is moving from defense to offense. Our strategic plan includes the restructuring and merger between Bezeq International and yes and the spin-off of Bezeq International ICT Business division into a separate company, as well as the launch of the fiber optics project to the residential market. All of which are based on our transition from defensive position to 1 where we take initiative and lead the market in all areas. The objective of the restructuring of the subsidiaries is primarily to adapt ourselves to the changing environment in the regulation of ISP providers as well as the disruptive changes in the content and TV area, while adjusting operations of the companies to the market in competitive landscape. This will allow us to provide the best response to the needs of our customers through a unified sales and service interface and the ability to offer triple play bundles. The process will lead to further efficiencies that are expected to result in savings of tens of millions of shekels a year as well as improvement in sales. In addition, the spin-off of the ICT Business division will enable us to better focus on the business and unlock value. Now let me turn the call back to Or to talk about the financial results. Thank you.

Thank you, Gil. Let's turn to Slide 6. The group's strong financial results continue to validate the strength of the group operations, the diversification of sources of revenue and the ability to streamline expenses. Revenues in 2020 totaled ILS 8.72 billion compared to ILS 8.93 billion in 2019, a decrease of 2.3%. Revenues in the fourth quarter of 2020 were ILS 2.2 billion in line with the prior year quarter. The decrease in revenues in 2020 was due to lower revenues in Pelephone, Bezeq International and yes, partially offset by an increase in revenue in Bezeq Fixed-Line. On Slide 7, group-wide salary expenses in 2020 decreased by 2.2%, totaling ILS 1.89 billion. The decrease was primarily due to lower salary expenses in Pelephone, Bezeq International and yes, partially offset by an increase in Bezeq OnLine and Bezeq Fixed-Line. The increase in salary expenses in the fourth quarter was primarily due to an increase in salary expenses in Bezeq Fixed-Line due to the recruitment of new employees for the fiber project as well as expenses relating to the new employee agreement. Meanwhile, group wide operating expenses decreased both year-over-year and quarter-over-quarter, the decrease in operating expenses was due to continued streamlining in operating expenses of the subsidiary companies. Turning to Slide 8. Adjusted EBITDA in 2020 totaled ILS 3.66 billion compared to ILS 3.69 billion in 2019, a decrease of 0.8%. Adjusted EBITDA in the fourth quarter of 2020 was ILS 887 million, up from ILS 870 million a year ago. Group-wide adjusted net profit in 2020 totaled ILS 1.14 billion compared to ILS 913 million in 2019, an increase of 25%. Adjusted net profit in the fourth quarter of 2020 was ILS 277 million compared to ILS 203 million in the same quarter of 2019, an increase of 36%. Moving to Slide 9. Free cash flow in 2020 totaled ILS 1.48 billion compared to ILS 1.37 billion in 2019, an increase of 8%. Free cash flow in the fourth quarter of 2020 was ILS 613 million compared to ILS 344 million in the same quarter of 2019, an increase of 78.2%. The increase in free cash flow was due to the increase in profitability as well as changes in working capital. CapEx in 2020 totaled ILS 1.5 billion compared to ILS 1.55 billion in 2019, a decrease of 3.4%. CapEx in the fourth quarter of 2020 amounted to ILS 368 million compared to ILS 324 million in the same quarter of 2019, an increase of 13.6%. The increase in CapEx was due to an increase in Bezeq Fixed-Line due to the launch of the fiber project. On Slide 10, we have broken down subscribers and ARPU by different business segments. Let me point out that subscribers in cellular and retail broadband segments increased during the quarter and retail broadband ARPU grew to ILS 102 compared to ILS 98 in the fourth quarter of 2019. Turning to Slide 11. We are adapting operations to evolving market conditions and continue to improve our risk profile. Of particular note, this past quarter is the year-over-year decrease of ILS 1.1 billion in net debt as well as decrease -- and the decrease in net debt-to-EBITDA leverage ratio from 2.4 in the fourth quarter of 2019 to 2.1 in the fourth quarter this year. Lastly, on Slide 12 and 13, I'm pleased to say that we met or exceeded our guidance on all 3 metrics in a challenging year. For the 2021 fiscal year, currently, we are forecasting group-wide adjusted net profit of ILS 1 billion, adjusted EBITDA of ILS 3.5 billion and CapEx of ILS 1.7 billion. Now Dudu will share with you updates on Fixed-Line operations.

Thanks, Or. In 2020, we achieved the best financial results of Bezeq Fixed-Line in many years, which affected the significant momentum in all areas of our operations. Despite intensifying competition and quarterly revenues Broadband Internet Services grew by 6.4% year-over-year to reach ILS 417 million. For the first time since 2014, a number of our retail subscribers has increased. On Slide 16, our full WiFi strategy, which focuses on improving the broadband experience continued to prove itself and our revenue continued to grow. At the end of 2020, more than 0.5 million customers were using the advanced BE router with another 0.25 million customers benefiting from WiFi handsets. All deals, along with the ongoing upgrade in broadband speed, led to an increase in the average revenue from retail broadband customers to ILS 99 per month. As you can see on Slide 17, our retail net is the only product in the Israeli telecommunication market with growing ARPU, while we are constantly adding new services and products to our customers. Turning to Slide 18. I'm excited to share that we recently launched our fiber network, and since then we are witnessing significant demand for the new services. I'm convinced that we will connect customers to a fiber network at unprecedented rate in Israel, while expanding our deployment at a faster pace. Even today, over 0.25 million households may connect to our fiber network in every month, more and more Israelis can join Bezeq Network revolution all over the country. Today, we offer broadband speed of 1 gig, and we will soon launch our 2.5 gig plan. On Slide 19, our Telephony offering saw a significant increase in traffic during the year due to the pandemic. With outgoing minutes up 14% year-over-year and incoming minutes up 19% year-over-year. As a result, Telephony ARPL increased year-over-year for the first time in many years. Turning to the next slide. In addition to the Telephony, we saw revenue growth in transmission and data, cloud and digital services segment, annual revenues for the transmission and data segment were up 6.6% year-over-year. Annual revenue for the cloud and digital segment were up 5.1% year-over-year due to the increasing virtual exchanges and cloud services for businesses. Year-over-year, decline in the quarterly revenues of the other segment was due to new pricing agreement with Hot and the Broadcasting Corporation. On Slide 21. In the business sector, we continue to widen the variety of our operation while deepening integration solution and cloud services for businesses that represent significant growth edge. We are promoting transmission network and IPVPN Internet links between branches combined with SD-WAN technology. In addition, we are combining data hosting and IT systems solution in the basket of business solution using 2 major platforms, VMWARE technology and physical servers. On the next slide, to provide better digital services and an improved customer experience, we are focusing on a 24/7 support with particularly high SLA for critical application, while positioning B144, the expert in digital marketing and advertising for small business. On Slide 23, our retail operations are also doing well with the addition of new stores, rapid growth in e-commerce activities and expansion of the range of product in a variety of category. On Slide 24, we completed the move of our headquarters to Holon which is expected to save millions of shekels in operation expenses -- in operating expenses. Moving to Slide 25. Revenues in 2020 totaled ILS 4.16 billion compared to ILS 4.07 billion in 2019, an increase of 2.1%. This is the first time in 5 years, we have recorded an increase in annual revenues. Revenues in the fourth quarter of 2020 were ILS 1.06 billion compared to ILS 985 million in the same quarter of 2019, an increase of 7.1%. The increase in revenue was due to an increase in most revenue items, partially offset by a moderate decrease in revenues of Telephony service in 2020. Turning to Slide 26. Expenses increased year-over-year for both full year and the fourth quarter. The increase in operating expenses were primarily due to an increase in interconnection fees and payments telecom operators due to the increase in traffic, an increase in subcontractor expenses provisions for doubtful debt and advertising expenses. The increase in salary expenses in the fourth quarter of 2020 was primarily due to the recruitment of new employees for the fiber project as well as expenses in connection with the new employees agreement. On the next slide, our profitability metrics increased across the board. Adjusted EBITDA in 2020 totaled ILS 2.65 billion compared to ILS 2.6 billion in 2019, an increase of 2%. Adjusted EBITDA in the fourth quarter of 2020 was ILS 660 million compared to ILS 650 million in the same quarter of 2019, an increase of 7.3%. Adjusted net profit in 2020 totaled ILS 1.09 billion compared to ILS 879 billion in 2019, an increase of 24.2%. In summary, we continue to grow broadband Internet revenue, which is driven by increase in subscriber and ARPU, sales of BE Router and WiFi handset is seeing tremendous success. Last but not least, the launch of nationwide deployment of fiber as well as unified broadband Internet will drive continued growth. We entered 2021 with focus on growth in all segments of our operations. And after a year of outstanding results, I'm convinced that we will successfully meet the challenges we have set for ourselves for this year. Now let me briefly talk about corporate responsibility. Last month, we published our corporate responsibility report. Main subjects of the report include corporate governance, code of ethics, employees' rights and fair employment practices, dialogue with customers, environmental policy, social involvement and contribution to the community and more. The report was prepared in accordance with the Global GRI and SASB standards and ideology. The publication of the corporate responsibility report is part of an ongoing and consistent move to reflect Bezeq's performance in the area and continuous improvement in such indicators. Bezeq, as the largest telecommunication company in Israel, is working towards long-term improvement in all corporate responsibility indicators and the present report marks the onset of significant step in this area. I would encourage you to review the report on our website for more detail. Today, I just want to draw your attention to a few things. On Slide 33. In 2020, our scope 1 GHG emissions decreased by 15.3% year-over-year, while our Scope 2 GHG emission decreased by 4.3% year-over-year. Decrease in emission was due to the introduction of electric hybrid vehicle in the company that significantly reduced fuel consumption as well as various energy-efficient measures. In addition, remote work led to reduced use of vehicle and decreased electricity consumption at the company's offices. On Slide 34. Our electricity consumption and fuel consumption have been decreasing for 3 years in a row, while recycled waste has been increasing over the same time period. We will continue to reduce the impact of our operation on the environment. With that, I'll turn the call to Ran to talk about Bezeq subsidiaries.

Thanks, Dudu. Turning to Slide 36. 2 years into the Alpha project, we are pleased to report that it has been a tremendous success. We appointed 1 unified management team to streamline the decision-making process. Our efficiency measures led to saving of ILS 230 million in salary and operating expenses compared to 2018. Moving to Slide 37 to 38. In 2020, we deepened the synergies between the subsidiary companies, continued the streamlining process and successfully dealt with the COVID-19 pandemic. All 3 companies grew their subscriber base, while meeting financial targets, a leading technological innovation in each industry, mobile, television and Internet. Meanwhile, we achieved significant progress on technology of the 3 companies. while continuing to lead in innovation. At Pelephone, we were the first to launch and operate our 5G network, a future growth engine of the Israeli economy. At yes, we completed a turnover and record profile, balanced cash flow and return to subscriber growth. Within a year, we expect to be the largest TV company broadcasting through the Internet. At Bezeq International, this month, we launched our fiber plus plan of broadband Internet over fiber optics. We will continue to operate and ensure that the technological leader of the -- that we are the technological leader of the telecommunication market in Israel. Moving to Slide 39 to 40. Today, we are excited to announce the next phase of Alpha. In which we are examining the merger of Bezeq International into yes, in order to consolidate the service and business operation of the companies and to provide added value to our customers. In addition, we will continue to realize synergies between the companies while utilizing existing resources and personnel in the best way possible. The plan includes the spin-off of Bezeq International ICT Business division to a separate company and concentration of the head office services for all 3 companies in Pelephone. The process will yield further efficiencies that are expected to result in a saving of tens of millions of shekels a year. Key areas for future saving includes continued streamlining and employee headcount, structural and organizational unification and related savings in real estate and overhead costs, joint procurement as well as saving and investments and costs of support through switching to 1 CRM system. Turning to Slide 41 to 45. Let's briefly look at some key financial metrics of subsidiary companies as well as a whole, and then we look at them individually. We continued to lower salary expenses during the year since 2017 salary expenses decreased by 20%. Revenues went down year-over-year for full year of 2020 as well as fourth quarter due to a decrease in roaming revenues as a result of the pandemic. Expenses declined across the board due to continued streamlining in operating and salary expenses as well as COVID-19 labor union agreements that partially offset the decrease in revenues. Adjusted EBITDA decreased year-over-year due to the pandemic impact on roaming revenues, which was partially offset by improving result in yes and by adoption of measures to adjust expenses. Adjusted net profit was up year-over-year for a full year as well as the fourth quarter. Turning to Slide 46 through 49 at Pelephone. At Pelephone for the next-generation of cellular in Israel, we are looking to provide our customers with diverse handset, record speed, private broadband and wide coverage of 5G services. Leveraging new and improved services, we have grown the number of postpaid subscribers since 2017. During the year, Bezeq international posted growth in its core business services and data centers connectivity, international data and IT projects. The company is prepared with extensive service and IT solution to enable and to increase its operations. In 2020, the company restated its financial statements due to the error discovered in past reports. As a result, the Board of Directors appointed an independent examiner who issued his report on January 2021. We are actively working to implement the recommendation of the independent examiner report by the time of the publication of the first quarter results. In addition, in 2020, we recorded an impairment of assets of ILS 307 million, primarily due to the impact of regulation. Moving to Slide 51 to 53. At yes, we returned to subscriber base growth in 2020, while customers continue to migrate to IP. The success of IP migration is manifesting itself through the improvement of financial metrics, including significant improvements in operating and free cash flow. I will now turn the call back to Or.

Thanks, Ran. Let me remind you that we will be holding a virtual analyst conference in Hebrew for the local market after this call. This concludes our prepared remarks. Operator, let's begin the Q&A session.

[Operator Instructions] The first question is from Tavy Rosner of Barclays.

I have a couple. First, with regards to the potential resumption of dividends, if my notes are correct, I believe you can technically do so starting in Q3 this year. Have you got -- have you guys given any thoughts with regards to the timing and the scope of a resumption?

This is Gil. Yes, you're correct. For the third quarter, hopefully, it will be possible. And it is on our agenda to discuss it at that time.

Okay. Understood. Thanks for that. Moving on to the potential merger of Bezeq International into yes. I wanted to ask what approvals are required from the MOC if at all? And then, I guess, looking at it from a broader perspective, Gil, in your prepared remarks, you mentioned continuing to seek the removal of structural separation, given that the Supreme Court asked you to kind of withdraw your request. What are the alternate ways for you guys to kind of seek that -- these things?

Okay. So first of all, the merger that we're planning at Bezeq International and yes, and the spin-off of the ICT business. While the merger itself does need the approval of the MOC, but we believe that since we're already operating these companies under 1 management, and we are allowed to market products together in these companies. So we do not believe there will be, I would say, rejections. But of course, we will have to apply for their permission, and we will immediately after the holidays, start working with them to receive this approval. As you know, we are not still -- we're not allowed yet to merge the companies with Bezeq because of structural separation. As I said, it is our goal or the end game is to reach the removal of structural separation. They know -- the ministry and the regulators know that this is our intention. This will bring better service and response and quality to Israeli households. And I think at the end, we will get it. But in the meantime, we want to do as much as we can. So we see this merger as a good strategic move on its own. And also, if and when, we will be allowed to further merge with Bezeq then this new, yes, these merged yes, will, later on, when possible, will be merged into Bezeq. So we see it as the right strategy today and as a piece of the puzzle of tomorrow. Also, the spin-off of the ICT. We think there's sort of, I would say, a hidden treasure there at Bezeq International, and we think that by spinning it out and putting more focus on it, we can unlock value.

Thank you, Gil, for the color. Last 1 for me, if I may, probably, for Dudu with regards to fiber. So obviously, that's great news that you finally sought all the approvals and started the project. I just wanted to get your thoughts on the competitive landscape. As you know, you have competition, and they are being quite active, both on the rollout side and making sure they have the right financing. So how do you look at the Bezeq offering in that context? And just a follow-up on that regarding the fact that you will be charging for -- you will be charging customer before installation fees, which is something that's not being done at the moment. So do you believe that competition will match your fees or conversely that potentially you might have to face pushback from customers on that end?

Tavy, well, bear in mind that our project is totally different than what's been going on currently. What's been done currently by Partner and Cellcom and IBC due to the fact that our rollout will be much, much higher. We'll be reaching most of Israel in a very short period of time. As we said, we will reach -- by the end of the year, we will reach 1 million households, which is more than what's been done in the market for the last 5, 6 years, and then we'll continue aggressively deploying. So we'll -- obviously, we'll meet much, much larger amount of bigger amount of households in Israel than what the competition has to offer currently. And of course, we offer our network on a wholesale basis to the other players. I think that eventually, our prices -- our offering is very competitive. Now bearing in mind, all the qualities that Bezeq brings with that offering in terms of service level and all the other qualities of Bezeq offering. So we think that our offering is very competitive, and we expect to see very, very high penetration of our fiber services very, very soon.

The next question is from Ondrej Cabejšek of UBS.

A couple of questions for me as well. Maybe 1 follow-up on the dividend. I assume that your net debt-to-EBITDA will be 1 of the factors in determining the scope of the dividend. Is there a level that you, as management, would be targeting or comfortable with for the medium or long term, at which point we could kind of think that that's the level you will want to target. And I assume that from our end, what the dividends will be accordingly? That's 1 question. Second question. If you could just give a color in terms of -- you're not hiring new employees because of the fiber project. Is there a run rate in terms of cost, either OpEx or CapEx that you can give us what impact these new hires will have on the free cash flow? And the third question, please. In terms of regulatory issues over the next 12 to 18 months, clearly, we've got the fixed voice conversations around the rate. Is there anything else that you would highlight that that's likely to take place in 1 of the areas where I think what I'm targeting clearly is the DSL, the copper rate, which have been adjusted to the higher traffic. So can you give us an abate in terms of do you still see that higher traffic as people start returning to work to school, et cetera. Do you still see that this would have a negative impact on your wholesale copper revenue?

Ondrej, regarding the dividend, as Gil said, we will discuss -- the Board will discuss it when it will be relevant in the second half of 2020. And of course, the Bezeq's financial stability will be 1 of the key components of this discussion, but we don't have a target to give you right now.

Regarding employee recruitment. So I don't think it will have a very substantial effect on our results or on our Capex. So basically, we are recruiting roughly around 200 employees, mainly on the deployment side and technicians, which install the customer premises services. I don't think it will have a very big effect on our CapEx now. But you can see our CapEx prediction on our financial results. And you can see that the effect of that is quite moderate. Regarding telephony, obviously, we expect traffic to reduce once the pandemic is over and people are returning to work from the outside of the home and children going to school -- back to school. But we are seeing more and more people returning and taking a Fixed-Line -- installing the Fixed-Line in their premises, even with the decrease in usage. So that's 2 trends we can expect once to see reduced traffic. And then I can see more and more people taking a Fixed-Line back to the home.

The next question is from Omri Lapidot of Leumi Partners.

Even though 2020 was a difficult year due to the coronavirus, the group managed to retain its adjusted EBITDA. However, for 2021, a year which we assume will drive some improvements in the corona effect. Your forecast for the adjusted EBITDA represents a decrease of over ILS 100 million. What are the main drivers for this assumption? Will the revenues suffer a significant decrease? Or does it come from an increase in expenses? What should we expect in the following years?

I think there are 2 or 3 major effects on the EBITDA for this year, which is hard to predict. One is the telephony pricing reform that was published by the Ministry of Telecommunication a few weeks ago, which we're still having tough time to predict what will be the exact effect of that on our results. The second big effect is also coming from regulation is the reducing the wholesale pricing that was done at the beginning of the year. And the third is, of course, still -- we still expect to see some effect on the pandemic, mainly, I think, on the roaming side. All 3 are very hard to predict. And I think being very cautiously -- in our prediction, we took a conservative approach and published the number that you see.

And just to add to Dudu, there is also the universal fund and the results of regulation. As all telecommunication companies in Israel to fund the universal fund that we subsidize deployment of fiber in non-economical areas.

The next question is from Jerry Dellis of Jefferies.

My first question is whether you can provide us with an outline on the timetable towards developments on the structural separation topic. My second question is, when you're making investment decisions about how hard to go on fiber deployment. How do you marry those against the reality that you must be a little bit uncertain about the composition of the Ministry of Communications going forward and perhaps also the industrial policy that they might be seeking to follow? And then my third question, please, is I'll be interested in any color that you're able to provide us about competitive reaction to your fiber -- commercial fiber launch in the last couple of weeks?

On the issue of removal of structural separation, as I said, we do not know if and when it will be removed. It's an issue that we're continuously talking with all regulators. And once there's a new government in place, we will discuss it again with the new ministers, both of finance and telecommunications. Meanwhile, as I said, we're doing steps that we believe will be approved. As I said, the restructuring at the subsidiary level, as I mentioned before. Dudu?

Regarding the -- Jerry, regarding the fiber deployment, basically we have -- the regulation have been published and what we need to do is to choose out of 3,000 areas that -- Israel was divided to 3,000 areas from which we need to choose which areas we want to deploy or not, and we are doing the analysis based on where it's economical for us to deploy. And of course, the fact that the Ministry of Communication has announced that they are going to abolish the separation between the access and the high-speed path is helping us looking forward, helping us to further increase the deployment regarding what the other competitors are doing or will do once we start offering fiber services. I think like everyone else, we read in the newspapers that some of the players are talking, Partner and IBC are talking mainly usage -- using each other's network. I think that it is fair to assume that deployment will be now slower or even stop once they're seeing that Bezeq is very aggressively deploying, and they can use Bezeq network on an alternate basis. So I think it is fair to assume that we'll see some changes in the deployment of several of these small networks that currently are growing.

[Operator Instructions] The next question is from Tavy Rosner of Barclays.

Yes. Just a follow-up on Pelephone. Just wondering what are your thoughts with regards to pricing in 2021 in the context of the kind of decrease in the number of competitors that we've seen during the quarter? Do you expect that to have any potential impact on pricing across the industry?

We will not be making an assessment about prices. But I can say that we see price stability during this year, and we believe this will continue because numbers of players is reducing, and we hope to see this stability going on, but I will not go into prices further than that.

There are no further questions at this time. I would like to remind participants that a replay is scheduled to begin in a period of 3 hours on the company's website at www.bezeq.co.io. Mr. Or Moses, would you like to make your concluding statement.

Thank you. I would like to thank you all for taking the time to join us today. Should you have any follow-up questions, please, please feel free to contact our Investor Relations department. Management looks forward to speaking to you on the first quarter of 2021 earnings call. Thank you, and happy Pesach.

Thank you. This concludes Bezeq's Fourth Quarter and Full Year 2020 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.