Last month’s NIS800m (US$220m) completion of fixedline/ ISP operator 012 Smile’s acquisition by cellco Partner Communications was the first deal triggered by new regulation on telecoms ownership.
The Ministry of Communication (MoC) telecoms regulator has…
Last month’s NIS800m (US$220m) completion of fixedline/ ISP operator 012 Smile’s acquisition by cellco Partner Communications was the first deal triggered by new regulation on telecoms ownership.
The Ministry of Communication (MoC) telecoms regulator has approved changes enabling mobile operators to hold an ILD (international landline operator) licence if they agree to a structural separation between their long distance and cellular operations – meaning separate managements and separate IT systems. Previously, these kinds of companies have been owned as separate entities, but often under the umbrella of a single holding group.
The MoC has said it will end the need for structural separation until the end of 2012, or until a sufficient number of MVNOs are in place, whichever happens sooner.
What this will mean for consumers, who until now have had to pay separately for different telecoms services offered by the same telecoms provider, is the opportunity to buy triple or quadruple play products.
“The regulator now feels that it is better to have five big groups providing all services than many companies competing to offer many services”, Hapoalim analyst David Levinson told TelecomFinance.
By absorbing 012 Smile, Partner will be able to make significant inroads into the long-distance and internet market.
It too has offered these services for a few years, but had failed to attract significant customer numbers.
Now, presumably buoyed by Partner’s success, leading mobile operator Cellcom is looking to buy 100% of ILD and ISP Netvision from the holding company that owns them both, IDB. If successful, Netvision will effectively become a private company that is wholly owned by Cellcom, until structural separation rules come to an end, Itai Brezis, Cellcom’s Director of Strategy, Business Development and IR, explained to TelecomFinance.
Cool Holdings, the holding company controlled by French businessman Patrick Drahi that owns cable leader Hot Cable Systems, last year made a US$180m offer to buy a controlling stake in MIRS, the number four mobile operator owned by Motorola. Drahi is therefore set to go head to head on quadruple play with the incumbent, Bezeq.
That group comprises four separate subsidiaries: mobile operator Pelephone, ILD and internet operator Bezeq International, satellite operator Yes, and outsourcing group Bezeq On-Line. Under the new rules, Pelephone and Bezeq International would be allowed to join, although TV operations will remain separate until the MoC decides that there is effective competition from IPTV.
