IDB Group to compete with Bezeq

Market for private phone service gets crowded with Globcall entry.

March 6, 2006 06:56
2 minute read.
IDB Group to compete with Bezeq

phone funny 88. (photo credit: )

Nochi Dankner will finally get his chance to take on Bezeq after the Communications Ministry granted his IDB Group subsidiary, Globcall Communications, a license to offer fixed-line telephone service to private homes through its Voice over Internet Protocol (VoIP) technology. Globcall said it invested over NIS 50 million to develop the necessary infrastructure, which enables it to expand its existing business services, to the private sector, while paying NIS 1m. for the license and a deposit of NIS 10m.

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"This license represents another stage in opening up the telecommunications market to competition," said Communications Minister Avraham Hirchson at the signing ceremony in Jerusalem on Sunday. "We have no doubt that the consumer will benefit from this in the form of lower rates." While Globcall becomes the second company to compete with Bezeq in the private sector, after cable company HOT started its service in November 2004, it is the first IDB company to break into the fixed-line market. Nochi Dankner has been increasing his telecommunications holdings, including gaining majority control of cellular provider Cellcom, and Internet and long distance calling companies Netvision and Barak, with the aim of developing the IDB Group into the main competitor to Bezeq. Globcall CEO Amnon Shaked said the group will decide in the coming days whether to use prefix "075" or "079." Cellcom, Barak and Netvision have all requested similar licenses from the Ministry and will all use the same calling prefix as Globcall if and when their requests are approved. Globcall provides network termination point (NTP) services to business centers, including domestic and international calls, voicemail systems, unified messaging systems and broadband Internet services in cooperation with NetVision and Barak. "This license gives us the capacity to provide added services through VoIP and will enable us to provide the same bundled service to the private sector," Shaked said. Bezeq, which until just over a year ago had a monopoly in the fixed-line telephony market, is barred from offering bundled services through its subsidiaries, until it loses more than 15% of its market share. Haim Geron, deputy director general for engineering & licensing at the Communications Ministry said it would take some time before Bezeq reaches that level. "It's difficult to compete with Bezeq," Geron said. "It's a company that provides good service at competitive prices." HOT meanwhile, has accumulated approximately 85,000 subscribers in the 14 months its been in the market. Internet provider 012 Golden Lines received a permit to provide service to businesses only through Voice over Broadband technology in December. It still awaits permission to extend that service to private homes.

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