HOT - Telecommunication Systems Ltd.

Key Executives:

Hertzel Ozer
CEO

Israel Lederberg
Dep CEO & CFO

Investor Relations:

Dana Admoni Phone: +972-77-707-7028

Web Site:

http://www.hot.net.il

Email:

dana.admoni@hot.net.il

Exchange:

TASE

Symbol: HOT

Year Listed: 1993

Main Indexes:

TA25, TA100, Maala SRI

Industry:

Cable Communications, Communications, Internet, Media

Year Established:

1987

# of Employees:

5,801

Research Coverage:

IBI Ltd., Leader Capital Markets, Meitav Investment House, Migdal Capital Markets, Psagot Investment House

Auditor:

Ernst & Young - Kost, Forer, Gabbay & Kasierer, Somekh Chaikin (member of KPMG International)

Main Subsidiaries:

HOT Telecom LLP | Mirs Communications Ltd.

Rating:

A1/Stable (Rated by Midroog (a subsidiary of Moody's)

Office Address:

Spain House, 1 Europark St., Yakum 60972 Israel

Telephone:

972-77-707-7171

Fax:

972-77-707-8809

HOT - Telecommunication Systems Ltd. is Israel's premier cable television operator, providing analog and digital cable television brand services and video-on-demand (VOD) services as well as broadband Internet access, IP telephony over cable and telecommunication services (via HOT Telecom). HOT has a 61% share of the multi-channel TV subscriber market in Israel.
Cable television
HOT provides nationwide, multi-channel cable television services to over 890,000 subscribers. It offers some 162 channels, including off-air, local and foreign channels, satellite, dedicated/theme channels, national TV stations, interactive channels and VOD. It offers digital base packages, personal video recording converters, triple play services (TV, telephony and Internet access) as well as high-definition (HD) channels.
HOT Telecom
HOT Telecom LP is a limited partnership offering nationwide telecommunication services to residential and business customers, including access to high-speed Internet and fixed-line telephony over a hybrid fiber and coax advanced network. Other telecommunication services offered by HOT Telecom include data transmission services on IP and SDH, remote access, end-user equipment, routers and IP virtual private networks (VPNs).
As of December 31, 2011, HOT's broadband Internet access had 768,000 subscribers and 635,000 telephony lines.
HOT Triple

HOT is currently the only communication group in Israel offering a "Triple package", which provides communication solutions for the entire home: multi-channel television, fast internet services, and fixed-line telephone services. Customers who subscribe to the "Triple package" enjoy all three services from a single provider, at attractive prices.

Mirs merger

In November 2011, HOT completed the transaction to purchase mobile phone operator Mirs Communications Ltd. In consideration for all the rights in Mirs, the company paid NIS 485 million in cash for the company's shares and for a loan assignment from the company’s previous shareholders, after deducting the net financial debt of Mirs. An additional maximum amount of NIS 450 million is expected to be paid in the coming years, based on meeting certain conditions, and may be lower. The merger will significantly strengthen HOT Group's ability to compete with Bezeq and Israel’s other large telecom providers, enabling HOT to expand the amount and diversity of services offered to its clients. HOT is also entitled to market Mirs cellular phone services. As of December 31, 2011, there were 444,000 cellular lines.

Management

CEO: Hertzel Ozer

More Info

Dep CEO & CFO: Israel Lederberg

More Info

Directors

Chairman: Stella Handler

Jeremie Bonnin

Abraham Burstyn

Yinon Engel

Dexter Goei

Amos Sapir

Relly Shavit

Israel Tchetchik

	Three Months Ended December 31
Income Statement Data ($m)	2011	2010
Total Revenues	233	217
Gross Profit	69	62
Gross Margins %	30%	29%
Operating Income	58	26
Interest, Net	-10	-12
Pretax Income	47	14
Net Income	33	12
Data translated at the NIS/$ exchange rate of 12/31/11

	Year Ended December 31
Income Statement Data ($m)	2011	2010	2009
Total Revenues	883	852	819
Gross Profit	273	233	172
Gross Margins %	31%	27%	21%
Operating Income	167	76	72
Interest, Net	-52	-50	-51
Pretax Income	115	26	21
Net Income	89	28	22
Diluted Earnings Per Share ($)	1.15	0.36	0.29
Data translated at the NIS/$ exchange rate of 12/31/11

Balance Sheet Data ($m)	12/31/11	12/31/10
Total Cash & ST Investments	4	0
Current Assets	130	87
Total Assets	1,744	1,410
Current Liabilities	457	345
Total Equity	505	398
Data translated at the NIS/$ exchange rate of 12/31/11

Key Financial Ratios	12/31/11	12/31/10
Current Ratio	0.29x	0.25x
L-T Debt/Equity	106.9%	148.7%

Business Summary	2011
	Revenues
Cable TV broadcasts	68%
Telecom services	59%
Cellular services	2%
Intercompany sales	-29%

Dividend Policy

On February 19, 2012, a dividend of NIS 365 million (NIS 4.699 per share) was paid. Except for this distribution, the company has not declared or paid any other dividends from January 1 , 2010 through March 21, 2012.

Main Shareholders (March 27, 2012)
Patrick Derhi	64.69%

Fast Internet

Ultra Fast Internet
HOT launched UFI (Ultra Fast Internet) in October 2009, offering 100 Mega Bit. It is based on DOCSIS 3 technology, among the world's most advanced, allowing HOT the flexibility it needs in the face of rapid technological development in the coming decade.

HOT Business

HOT Business
HOT offers a variety of advanced services for its business customers including: telephone services - connection via a telephone modem or through PRI routes for large organizations; Internet services - fast internet connection through modem or communications and for large organizations through fiber optics transmission; and Multi-channel television - personally selected programming from a wide range of content. HOT's business customers are from all sectors, including small and mid size businesses, and from leading companies in the public, financial, and high-tech sectors.

Telephony

Telephony
HOT telephone services are based on cutting edge technology cable infrastructure. Customers enjoy a telephone network managed and monitored by HOT’s advanced service and control center, and benefit from a variety of other state-of-the-art services.

Television

HOT View on Demand
HOT brought the View on Demand revolution to Israel, while changing the television content consumption culture by offering a range of advanced services.

HOT V.O.D.
HOT VOD enables customers to enjoy a content library, among the largest in the world, at their leisure. The library contains up to 30,000 hours of TV series, more than 2,000 movies, shows, music, and other content for all ages. Approximately 60% of the company’s customers regularly use this service, with about 25 million orders in the service each month.

Start Over
Start Over is an exclusive service enabling the viewer, while a broadcast is in progress, to view the program from the beginning, simply by using the remote control. The service is available for a number of select channels. Some two million uses of this service are recorded monthly.

HOT Magic HD
HOT Magic HD is a recording cable converter that enables the viewer to manage the broadcast schedule, control it, record dozens of hours of broadcast, and more. The operation is user friendly.

Interactive Games
HOT offers a variety of interactive TV games for all ages.

Announcements

14/5/2012
HOT MOBILE (Subsidiary) to Begin Selling Today Cellular Services Over a 3.9 Generation GSM Network

21/3/2012
HOT Reports Fourth Quarter and Full Year 2011 Results

14/2/2012
HOT-Net (Subsidiary) to Begin Offering ISP (Internet Service Provider) Services to Private Customers

13/12/2011
HOT Reports Compromise Agreement with ACUM to Reduce Provision for Artist's Claims by NIS 100 Million - To be recorded in the fourth quarter of 2011

16/11/2011
HOT - Telecommunication Reports Third Quarter 2011 Financial Results

12/10/2011
Israel Ministry of Communications Approves Transfer of Control of MIRS to HOT

31/8/2011
HOT Reports Second Quarter and First Six Months 2011 Financial Results

18/5/2011
Hot Reports First Quarter 2011 Results

All Announcements

News

Globes - 13/5/2012 - Bezeq Int'l to provide int'l calls platform to HOT's Mirs
The Bezeq-HOT collaboration is raising hackles, as they are Israel's only two companies with full-service telecommunications networks. More Info

Forbes Healthcare - 22/9/2011 - Hot Health IT Start-Up ZocDoc Raises $25 Million From Goldman Sachs
Four-year-old start-up ZocDoc raised $25 million in a Series C round from Goldman Sachs, bringing the total amount of money raised to $95 million--the largest in the health IT space. The funding comes on the heels of a $50 million investment from Russian tech investor Yuri Milner. Goldman Sachs also has a stake in DST Global, Milner and steel tycoon Alisher Usmanov's investment vehicle.  One of ZocDoc's first angel investors works at Goldman. More Info

Globes - 31/8/2011 - Barclays sees strong upside in HOT
"HOT is the only player in Israel that can compete against Bezeq." More Info

Globes - 13/6/2011 - Knesset c'tee approves higher royalties from Hot
Despite opposition from the Council for Cable TV and Satellite Broadcasting, royalties will increase 2.5%. More Info

Market Data: Company Profile

Market Snapshot

Summary Share Information

Google Finance
Company Summary

Midroog, a Subsidiary of Moody's
Ratings

HOT - Telecommunication Systems Ltd. ist der erste Kabel-TV-Betreiber Israels mit einem Angebot an analogen und digitalen Kabel-TV-Marken-Dienstleistungen und Video-on-demand-Dienstleistungen (VOD) sowie Breitband-Internetzugang, IP-Telefonie via Kabel und Telekommunikationsdienstleistungen (via HOT Telecom). HOT hat einen Anteil von 61 % am Mehrkanal-TV-Abonnement-Markt in Israel.
Kabelfernsehen
HOT bietet landesweite Mehrkanal-Kabel-TV-Dienstleistungen für über 890.000 Abonnenten. Im Angebot befinden sich 162 Kanäle, inklusive Direktübertragung, lokale und ausländische Sender, Satellit, Themenkanäle, Landessender, interaktive Kanäle und VOD. Weiterhin gehören analoge und digitale Basis-Pakete, PVR-Konvertierung (persönliche Videoaufnahmen), 3-play-Service (TV, Telefon und Internetzugang) sowie High-Definition-Kanäle (HD) zum Angebot.
HOT Telecom
HOT Telecom LP, eine Kommanditgesellschaft (limited partnership), bietet Highspeed-Internetzugang, landesweite Festnetztelefoniedienstleistungen via Kabelnetzwerk und Telekommunikationsdienstleistungen. HOT Telecom hat ein einheimisches Voice-over-IP-Telefonie-System ins Leben gerufen. Eine solche Dienstleistung wurde vormals nur von Bezeq angeboten. Andere Dienste beinhalten Fernzugriff, Endbenutzerausstattung und IP-VPNs (virtual private networks).
Am 31 Dezember 2011 verfügte HOTs Breitband-Internetzugang über 768.000 Abonnenten und 635.000 Telefonleitungen.
Die Investitionen von HOT beinhalten eine 0,9-%-Beteiligung an Partner Communications Ltd., einer GSM-Mobilfunkfirma.

HOT Telecommunication Systems Ltd est le premier opérateur de télévision par câble en Israël, fournissant des services de télévision analogique et numérique et des services de vidéo à la demande (VOD), ainsi qu’un accès internet à haut débit, la téléphonie sur IP par câble et des services de télécommunication (via HOT Telecom). HOT détient 61% du marché des abonnements à la télévision multichaînes en Israël.

La télévision par câble
HOT fournit des services de télévision multichaînes par câble dans tout le pays, à plus de 890 000 abonnés. Il offre quelques 162 chaînes, dont des chaînes hors antenne, locales et étrangères, le satellite, des chaînes à thèmes, des stations de télévision nationales, des chaînes interactives et des services VOD.
Il propose des forfaits de base analogiques et numériques, des outils de conversion des vidéos personnelles enregistrées, des services « triple play » (télévision, téléphonie et accès internet), ainsi que des chaînes en haute définition (HD).

HOT Telecom
HOT Telecom LP est une société en commandite offrant un accès internet à haut débit, des services nationaux de téléphonie fixe via le réseau câblé ainsi que des services de télécommunications. HOT Telecom a lancé un service national de téléphonie voIP, service autrefois fourni uniquement par son concurrent Bezeq. D’autres services incluent l’accès à distance, des équipements terminaux et des réseaux privés virtuels sur IP (VPN).
Au 31 Décembre 2011, l’offre internet à haut débit de HOT comptait 768 000 abonnés et 635 000 lignes téléphoniques.
Les investissements de HOT incluent 0,9 % de parts chez Partner Communications Ltd., une société de téléphonie mobile.

HOT – Telecommunication Systems Ltd. es el principal operador de televisión por cable de Israel, proporciona servicios de televisión analógica y digital por cable y servicios de vídeo bajo demanda (VOD) junto con acceso a Internet de banda ancha, telefonía IP sobre cable y servicios de telecomunicaciones (a través de HOT Telecom). HOT tiene una participación del 61% del mercado de suscripción a TV multi-canal de Israel.
Televisión por cable
HOT proporciona servicios de televisión por cable multi-canal en todo el país, a más de 890.000 suscriptores. Ofrece unos 162 canales, incluyendo canales extranjeros, locales y fuera del aire, satélite, canales temáticos/dedicados, emisoras de TV nacionales, canales interactivos y VOD. Ofrece paquetes básicos digitales y analógicos, conversores personales de grabación de vídeo, servicios combinados triples (TV, telefonía y acceso a Internet) junto a canales de alta definición (HD).

HOT Telecom
HOT Telecom LP es una sociedad limitada que ofrece acceso a Internet de alta velocidad, servicio de telefonía fija en todo el país sobre la red de cable y servicios de telecomunicaciones. HOT Telecom ha lanzado un sistema doméstico de telefonía de voz sobre IP, un servicio que solamente ofrecía anteriormente Bezeq. Otros servicios incluyen acceso remoto, equipos para el usuario final y redes privadas virtuales sobre IP (VPN).
A 31 de diciembre de 2011, el acceso a Internet por banda ancha de HOT tenía 768.000 suscriptores y 635.000 líneas telefónicas.
Las inversiones de HOT incluyen una participación del 0,9% en Partner Communications Ltd., una compañía de telefonía móvil por GSM.