Kahlon: Finance Ministry can block Golan-Cellcom deal

If two of the players join forces, they would control 40% of the market, and prices would creep back up.

By
November 9, 2015 20:54
1 minute read.
Moshe Kahlon

Moshe Kahlon. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

 
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Finance Minister Moshe Kahlon said on Monday that his ministry has the authority to block the sale of discount mobile provider Golan Telecom to its competitor Cellcom.

“We will not allow the sale of Golan Telecom to Cellcom. In recent days I’ve been hearing that the Finance Ministry does not have authority to stop the sale. I’m telling you that we do have the authority,” he said at a Calcalist conference in Ashdod.

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The Economy Ministry’s Antitrust Authority and the Communications Ministry are the regulators most often cited as having say in such a deal. The seat of the antitrust commissioner, however, has been vacant since the end of the summer.

Golan, Kahlon said, had received permission from the state to use cellular frequencies as part of the reform.

“You don’t want to use the frequency? Give it back to the state,” he said, adding, “Nobody here will take a ride on the backs of the citizens.”

Much is at stake for Kahlon in blocking the merger.

The cellular reform plan he pushed as communications minster was his signature achievement, allowing new players such as Golan and Hot Mobile to enter the market and dramatically drive down consumer costs. If two of the players join forces, they would control 40 percent of the market, and prices would creep back up, according to the Israeli Consumer Council, an advocacy group.

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But market analysts have called into question whether or not Israel’s tiny market has room for so many players.

“As we’ve said in the past, we believe that at the end of the day, the market will shrink to four players,” said Ilanit Scherf of Psagot Investment House.

She agreed, however, that such a move would reduce sales and price discounts in the market, and introduce premiums for extra features.

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