After a last-minute delay early this month, the Ministry of Communications today awarded Cellcom Israel Ltd. an inland telephony operators license. Cellcom will receive a special license, allowing it to add regular telephone services to the company’s wireless and transmission services.
Cellcom’s special license does not require the company to provide universal service, such as Bezeq Ltd. (TASE: BEZQ) and the HOT cable television franchise. Cellcom can therefore choose its customers, and plans to approach only the business sector, which is considered more profitable than the household sector. The business sector generates more call-minutes, and requires a smaller deployment of infrastructure.
Cellcom predicts that it can provide initial inland telephony services to 1,500 office buildings. The company has also approached its transmission services customers to buy the company’s inland telephony services.
Cellcom has become Israel’s fifth national inland telephony services provider, after Bezeq, HOT, Golden Lines International Communication Services Ltd. and IDB Holding Corp. Ltd. (TASE:IDBH) unit “Globcall” (a Cellcom sister company).
The Ministry of Communications delayed granting Cellcom an inland telephony services license when it discovered that Cellcom would offer the services through a company in which it was only a limited partner, and could not therefore guarantee the subsidiary’s financial standing. Following negotiations between the Ministry, Cellcom and IDB, it was decided to grant license even though the original structure was retained.
Another IDB subsidiary, Barak I.T.C. Ltd, may also soon obtain a special inland telephony operators license.
Published by Globes [online], Israel business news - www.globes.co.il - on April 23, 2006
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