Bezeq The Israel Telecommunication Corp. Ltd

In Q2, core revenue grew 4% to over ILS 2 billion, comp EBITDA increased 6.2% to ILS 978 million, and comp net profit rose 38% year over year, with management noting the comparison was affected by the change in yes valuation in Q2 2025. For the first half of 2026, comp net profit grew 19% and free cash flow grew 24%. Fixed-Line core revenue increased 1.9% to ILS 999 million; comp EBITDA rose 6.1%; and comp net profit grew 20%. Pelephone and yes both posted growth despite war-related roaming pressure, while Bezeq International business customer revenue increased 9% year over year to ILS 252 million, with comp net profit of ILS 11 million versus ILS 3 million a year ago. Guidance and outlook were unchanged: management said the 2026 outlook and 2029 targets remain intact, including comp EBITDA guidance of ILS 3.7 billion to ILS 3.8 billion, and it reiterated a target of 300,000 5G Max subscribers by year-end.

Tomer Raved framed the quarter as proof of “commercial and operational momentum” across the group, tied to consistent growth in subscribers, profitability and digital infrastructure. He emphasized strategic priorities around fiber, 5G, the Wecom acquisition, and submarine cable investments, saying these could strengthen Bezeq’s competitive position and make Israel a global digital hub. His tone was optimistic and expansionary, but he also said none of the subsea cable, structural separation, or M&A upside is included in the 2029 forecast today.

Yochai Benita highlighted a balanced capital structure, with net debt up ILS 303 million to ILS 5.2 billion and net debt to comp EBITDA at 1.6x. He pointed to lower operating expenses after valuation adjustments, including about ILS 35 million lower operating expenses and about ILS 15 million higher depreciation excluding the valuation impact. He also cited a cash dividend of ILS 415 million, a new ILS 100 million buyback plan, and said the company wants to maintain its AA rating while increasing shareholder remuneration.

Analysts focused on structural separation, fiber/TV bundle economics, mobile ARPU, OpEx sustainability, roaming, and capital allocation. Management said bundling is not cannibalization at the group level because the wholesale fee is a wash and the model creates incremental fiber and TV revenue; it also said the structural separation process is close to completion and elections should affect timing more than the outcome. On mobile, management said ARPU is broadly stable but was temporarily pressured by roaming and some government tender effects, and on leverage it said there is no plan to delever further because the group likes its 1.5x-1.6x leverage and AA rating and prefers to use flexibility for M&A, subsea cables, and higher shareholder returns.