The Gronau Committee, chaired by Prof. Reuven Gronau, has published its long-awaited report on competition in the local telecommunications market. One of the main recommendations of the report is to allow Bezeq (TASE: BZEQ) and its subsidiaries to market a triple-play service package (telephony, Internet, and television), provided that the Bezeq chain is unbundled. Once this happens, its subsidiaries can also be granted inland telephony service operating licenses.
The Gronau committee recommends that the Bezeq network should be broken down into segments in a way that will allow the development of a wholesale market for landline services, and the leasing of access segments to rival companies. A company seeking to take advantage of the segmental breakdown may offer the full-range of services carried over landline infrastructure, including telephony and Internet, subject to the terms of its license.
The committee also addressed the issue of Bezeq's call rates, and ruled that as long as Bezeq's market share was greater than 60% (it currently stands at 88%), the existing mandatory tariff scale set out by the Ministry of Communications should remain in place.
As for cellular communications, the Gronau committee has recommended the opening up of the cellular communications market to new competitors. It also recommended that mobile virtual network operators (MVNOs) be allowed to operate services over existing cellular networks, and the addition of new companies offering technologies for WiMAX, which will be based on a nationwide deployment.
With regard to the international calls sector, the committee recommends that the tariff for international calls made through cellular handsets should be set by the international calls companies, which will forward a fixed connectivity charge for use of cellular networks to the company whose network was used.
As for multi-channel television, the committee recommends the adoption of a framework arrangement under which a basic package consisting of between five and 10 channels will be on offer. These will include the open channels and other channels with specific social or cultural content at the provider's discretion. The price of the package will be set by the multi-channel television providers HOT, and YES.
Published by Globes [online], Israel business news - www.globes-online.com - on March 12, 2008
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