cell phones 88 224.
(photo credit: Courtesy)
Mirs Communications and 018 Xfone Communications won the Communications
Ministry’s tender for two wireless frequency bands late on Monday – and on
Tuesday promised that their victories would lead to lower prices for
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Mirs will pay NIS 710 million and Xfone will pay NIS
705m. for the tender, around triple analysts’ predictions, after
defeating Golan Telecom and Select Communications in the
Communications Minister Moshe Kahlon (Likud) has called the
tender, which delivers the companies frequency bands for wireless carriers using
third generation technology, the most important step taken by the ministry
during his tenure.
Speaking at a joint press conference alongside Mirs
controlling shareholder Patrick Drahi and Xfone owner Hezi Bezalel, Kahlon joked
that he would take back their licenses if they intend to cut rates by any less
than 50 percent. Adopting a more serious tone, he said, “There is room to lower
mobile prices, and we hope that they will fall. Prices have somewhere to fall to
– and sharply.
This is a great push for the market, which has great
Kahlon said that in his opinion this would be the
last tender for these technologies in Israel.
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“We were worried that the
market was saturated, and that nobody would participate, but I am pleased that
this was not the case,” he said.
Drahi, who is also the controlling
shareholder in cable TV, Internet and telephone carrier Hot Telecommunication
Systems, signaled that Mirs would push hard to lure customers away from the
three other existing cellular communication providers Partner (which operates
mobile carrier Orange), Cellcom and Pelephone, which dominate the
“The more we pay in the tender, the more aggressive we have to
be,” he said, adding that he would consider merging Mirs and Hot into a single
Israel Consumer Council CEO Ehud Peleg told The
Jerusalem Post that the introduction of the new companies would ensure a level
of competition and fairness that did not currently exist in the cellular
There were two problems prior to this tender, Peleg said, the
first being that it was difficult to break a contract with a cellular company,
and for which important regulatory steps were taken in the past two years to
make it easier for consumer to do so.
The second problem, he said, was
that consumers needed an alternative company to which they could move, which
“until now did not exist.”
He said, “Today when new players join [the
market], for which they erected a very smart incentive, a tender...
[the mobile companies] will begin to offer attractive packages to the
Peleg said Israeli consumers had ranked cellular companies in
last place in terms of their level of fairness and transparency, adding that a
million consumers had indicated they would move to a new operator should one
emerge in the market, with 54.5% listing an “attractive price” as their main
consideration when making that choice.
He called Tuesday’s announcement
of the tender’s winners a “good result” for consumers, but added, “The
responsibility rest also on the shoulders of the consumer to take advantage of
this opportunity, and not to be lazy, but rather to make comparisons, to make
calculations, and to choose the service that is most worthwhile for them, now,
when the opportunity has opened up in front of them.”
Capital Markets predicted that Partner and Cellcom would be hit hard by the two
new competitors, saying that “aggressive prices and determination by the bidders
in the mobile carriers tender highlight the size of the competitive threat
against the current carriers.
“Cellcom Israel and Partner Communication
will be the main victims of the pending change, as their mobile business is, and
will probably continue to be, their core activity even after the mergers with
NetVision and 012 Smile Telecom, respectively,” it continued.
on Bezeq Israeli Telecommunication Co., which owns mobile carrier Pelephone,
will be less significant because of that company’s diversity, Leader
said.Globes contributed to this report.
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