Note 22 – Operating expenses
Operating expenses disclosed by nature of expense amounted to $ 53,207, $45,480 and $34,311 for the years ended December 31, 2017, 2016 and 2015, respectively. The breakdown of Employee benefit expenses and severance payments, Cost of equipments and handsets, Provisions and Bad debt expenses are disclosed in Notes 13, 7, 17 and 5, respectively.
The main components of the remaining operating expenses are the following:
Interconnection costs and other telecommunication charges
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Years ended December 31, |
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|
2017 |
2016 |
2015 |
|
Fixed telephony interconnection costs |
(486) | (445) | (327) |
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Cost of international outbound calls |
(272) | (268) | (192) |
|
Lease of circuits and use of public network |
(490) | (461) | (336) |
|
Mobile Services - charges for roaming |
(348) | (414) | (374) |
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Mobile Services - charges for TLRD |
(1,552) | (965) | (941) |
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|
(3,148) | (2,553) | (2,170) |
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Fees for services, maintenance, materials and supplies
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Years ended December 31, |
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2017 |
2016 |
2015 |
|
Maintenance of hardware and software |
(671) | (546) | (331) |
|
Technical maintenance |
(1,393) | (1,329) | (854) |
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Service connection fees for fixed lines and Internet lines |
(600) | (267) | (224) |
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Service connection fees capitalized as SAC (Note 3.j) |
23 | 14 | 14 |
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Service connection fees capitalized as Intangible assets (Note 3.j) |
50 | 41 | 36 |
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Other maintenance costs |
(716) | (524) | (396) |
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Obsolescence of inventories – Mobile Services (Note 7) |
(17) | (45) | (38) |
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Call center fees |
(1,999) | (1,428) | (1,297) |
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Other fees for services |
(1,211) | (862) | (793) |
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Directors and Supervisory Committee’s fees |
(66) | (60) | (36) |
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(6,600) | (5,006) | (3,919) |
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Taxes and fees with the Regulatory Authority
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Turnover tax |
(3,528) | (2,817) | (2,122) |
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Taxes with the Regulatory Authority |
(1,049) | (1,078) | (917) |
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Tax on deposits to and withdrawals from bank accounts |
(626) | (539) | (403) |
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Municipal taxes |
(531) | (395) | (289) |
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Other taxes |
(373) | (296) | (212) |
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(6,107) | (5,125) | (3,943) |
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Commissions
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Agent commissions |
(2,602) | (3,078) | (2,659) |
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Agent commissions capitalized as SAC (Note 3.j) |
986 | 1,403 | 1,172 |
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Distribution of prepaid cards commissions |
(842) | (763) | (635) |
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Collection commissions |
(1,147) | (1,295) | (983) |
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Other commissions |
(26) | (116) | (88) |
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(3,631) | (3,849) | (3,193) |
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Advertising
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Media advertising |
(769) | (527) | (524) |
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Fairs and exhibitions |
(264) | (176) | (137) |
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Other advertising costs |
(185) | (171) | (153) |
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(1,218) | (874) | (814) |
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Cost of VAS
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Cost of mobile value added services |
(829) | (1,446) | (1,218) |
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Cost of fixed value added services |
(45) | (53) | (38) |
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(874) | (1,499) | (1,256) |
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Other operating expenses
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Transportation, freight and travel expenses |
(927) | (961) | (768) |
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Delivery costs capitalized as SAC |
79 | 134 | 85 |
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Rental expense |
(1,069) | (765) | (540) |
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Energy, water and others |
(1,117) | (783) | (429) |
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International and satellite connectivity |
(246) | (215) | (202) |
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(3,280) | (2,590) | (1,854) |
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D&A
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Depreciation of PP&E |
(5,039) | (4,358) | (3,046) |
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Amortization of SAC and service connection costs |
(1,524) | (1,474) | (1,045) |
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Amortization of 3G/4G licenses |
(325) | (338) | (324) |
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Amortization of other intangible assets |
(40) | (28) | (23) |
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(6,928) | (6,198) | (4,438) |
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Disposals and impairment of PP&E |
Years ended December 31, |
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2017 |
2016 |
2015 |
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Gain on disposal and impairment of PP&E (*) |
- |
- |
31 |
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Impairment of PP&E – Fixed services |
(5) | 2 | (116) |
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Impairment of PP&E – Mobile services |
(229) | (369) | (114) |
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Decrease of PP&E – Fixed services |
(16) | (1) |
- |
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Decrease of PP&E – Mobile services |
(66) | (15) |
- |
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(316) | (383) | (199) |
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(*) Since 2016 these results are included in Other Income.
Operating expenses, disclosed per function are as follows:
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Years ended December 31, |
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2017 |
2016 |
2015 |
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Operating costs |
(32,287) | (27,628) | (20,578) |
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Administration costs |
(3,306) | (2,453) | (1,827) |
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Commercialization costs |
(16,708) | (14,829) | (11,594) |
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Other expenses – provisions |
(590) | (187) | (113) |
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Gain on disposal of PP&E and impairment of PP&E |
(316) | (383) | (199) |
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(53,207) | (45,480) | (34,311) |
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Operating leases
Future minimum lease payments from of non cancellable operating lease agreements as of December 31, 2017, 2016 and 2015 are as follows:
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Less than 1 |
1-5 years |
More than 5 |
Total |
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2015 |
436 | 890 | 31 | 1,357 |
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2016 |
636 | 1,169 | 74 | 1,879 |
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2017 |
681 | 1,185 | 143 | 2,009 |
Further information is provided in Note 3.k) to these consolidated financial statements.