Economics C'tee cancels cellphone exit fees

MK Akunis: Cancellation of fines is necessary step toward consumer revolution in the cellular market that will be reflected by lower prices.

November 24, 2010 15:23
1 minute read.
A  cell phone user [illustrative]

Cellphone user 311. (photo credit: Ariel Jerozolimski)

The Knesset Economic Affairs Committee today decided to cancel the fines for cancelling cellular telephone contracts. These fines usually appear in the fine print of the contract a subscriber signs with the mobile operator when purchasing a cellphone. Fines can reach thousands of shekels, and in many cases cause consumers to stay shackled to the mobile operator until the termination of the contract period.

After the decision, Economic Affairs Committee chairman MK Ophir Akunis (Likud) said, "The cellular companies keep consumers captive through the exit fines. This is an unacceptable absurdity. Cancellation of the fines is a necessary step toward a consumer revolution in the cellular market that will be reflected by lower prices."

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Earlier, during the Economic Affairs Committee's discussion Minister of Communications Moshe Kahlon called on the committee members to support the reform to cancel the cellular exit fines. He said that the reform was critical because the fines were a major barrier to competition, and without that removal there would be no competition.

Ministry of Finance representative, Yehuda Saban, told the committee about problems in the cellular market and the importance of moving the reform forward to improve the situation. He said that spending on cellular was households' second highest expenditure after electricity in 2008 - a very hefty expense. He said that consequently, any reform would mainly benefit the poor.

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