Bezeq rivals set sights on IDF

The IDF's entire relationship with Bezeq is likely to change.

Sources inform ''Globes'' that a target=new href=>Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has joined the calls for the IDF to open up its telephony services to other providers apart from Bezeq (TASE: BZEQ). Cellcom joins Hot Cable Systems Media Ltd. (TASE: HOT) and 012 Smile.Communications Ltd. (Nasdaq:SMLC; TASE: SMLC), which have called on the IDF to open up its telecommunications services to other providers, and to cease working exclusively with Bezeq. The latter has been considered the IDF's in-house telecommunications services provider for many years, and despite their disagreements over discounts and fees, until recently the IDF been unwilling to even consider alternatives.

The entry by new competitors to the IDF's telecommunications services network is expected to change the IDF's entire relationship with Bezeq. The IDF previously received discounts because of its size and the fact that it worked exclusively with Bezeq, and these are likely to be cancelled once the other providers make their entry. At present there is no alternative network large enough to provide service to the IDF bases and sites where the army needs telephony services.

At the same time, the IDF is setting up its own telecommunications network and is currently putting out a large tender for the selection of a telecommunications provider to build the network for it. As part of this process, the IDF intends to gradually reduce its dependence on Bezeq and switch all its telecommunications activity to an IP-based telephony network that will connect all its bases and operations centers.

Published by Globes [online], Israel business news - - on June 16, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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