Cellcom, Israel’s largest cell phone provider, has revealed that it is the target of a class action suit that could result in its needing to pay out almost $190 million in damages. The revelation comes after the company announced a poor third quarter.
Together with another company which receives hosting services from Cellcom, it has been charged that the firm unlawfully and in violation of its license and agreement with its subscribers, failed to provide service to their subscribers during the previously reported network malfunction that the defendants suffered on November 6, 2014.
The total amount claimed from the defendants, if the lawsuit is certified as class action, is estimated to be approximately $18.8 million (although under the calculations detailed elsewhere in the lawsuit — approximately $187 million), of which approximately $15.6 million (under the said calculations – approximately $158 million) is attributed to the Company.
Cellcom stated that at this early stage it cannot assess the lawsuit’s chances of success.
Cellcom can ill afford to lose any more money as the company’s total third quarter revenues decreased from the same period last year 6.7% to $309 million and its service revenues decreased 13.1% to $238 million.
The company attributed the drop in income to increased competition in the moil telephone services industry in Israel. It chose not to issue any dividends as a result.