Honey, pick up some milk and a cellphone

ByRON FRIEDMAN
August 9, 2010 00:56

Rami Levi to start marketing cellphone services at his discount supermarkets.

1 minute read.



A Rami Levy supermarket

rami levy 311. (photo credit:Courtesy)

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).

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“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.

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