Minister of Communications Ariel Atias is leaning towards publishing a tender for WiMAX frequencies for wireless broadband infrastructure. The winners in the tenders will be operators who guarantee the lowest service price for consumers over five years. WiMAX makes possible broadband-based advanced telecommunications wireline services, and soon for wireless services as well. These services will compete with cellular services.
Atias wants to create more competition against cellular operators, and sees WiMAX as a way of increasing market competition.
Normally, winners in Ministry of Communications tenders went to the highest bidders. Theoretically, the change in the tender structure could create a situation that ensures low prices for wireline and wireless broadband services, to the benefit of consumers, while the state foregoes revenue from the frequencies.
Israel has already held a tender of this kind - for the second cellular operator’s license. At the time, Cellcom Israel Ltd. (NYSE:CEL) undertook to offer fairly low prices for a limited period, which completely changed Israel’s cellular market bringing about a rapid huge increase in the number of users.
As things stand at the moment, even though nothing has been finalized yet, the three large cellular operators, Cellcom, Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR; LSE:PCCD) and Pele-Phone Communications Ltd., may not participate in the WiMAX frequencies tender, nor is it clear whether Hot Cable Systems Media Ltd. (TASE: HOT) will allowed to participate either.
Published by Globes [online], Israel business news - www.globes.co.il - on February 18, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007