Discount supermarket chain owner Rami Levi announced on Sunday plans to enter the mobile phone market.
In a statement to the stock exchange, Levi’s company, Rami Levi Shivuk Hashikma, announced that the firm had applied to the Ministry of Communications requesting to become a Mobile Virtual Network Operator (MVNO).
Cornering the supermarket?
“As part of the company’s strategy, [it] seeks to take advantage of its sale centers as a platform for selling additional products and services. The company believes that selling advanced mobile telephone services at [its] stores while taking advantage of [its] branding in the field of cheap prices will provide clients with added value and become an additional source of growth,” read the statement.
The statement added that when the application is approved, Shivuk Hashikma will enter negotiations with “one of the leading communications companies in order to receive the necessary professional services, including operator services, professional customer relations services, and billing services.”
A subsidiary, to be called Rami Levi Shivuk Hashikma Communications LTD, will oversee the operations.
An MVNO provides mobile phone services but lacks infrastructure. They
usually enter into agreements with existing cellular service providers
and piggy-back on their system in exchange for payment.
According to the Ministry of Communications, director- general Eden Bar
Tal received the application on Sunday morning. Rami Levi is the ninth
company to apply for a license of this type. Itoran, Free Telecom and
Telecom 365 have already received approval. Companies waiting for
approval are Israel Postal Company, T2T, Binat communications, Gali
phone and Home Cellular.
Rami Levy is considered a shrewd businessman, and his past record of
aggressive price-cutting is expected to be adopted in the new venture,
too. Levy has holdings in a wide variety of business sectors, including
real estate in Israel and Eastern Europe, and ownership of the Of Haemek
poultry processing plant.
The Israeli mobile phone market is currently dominated by three large
service providers: Cellcom, Pelephone and Orange. The Communications
Ministry hopes that introducing new players into the market will
increase competition and reduce prices.