Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has renewed negotiations with Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) for the purchase of transmitters for the company's cellular sites. Cellcom had previously decided to terminate its contract with Bezeq by the end of 2010.
Cellcom's 400 cellular sites are linked by Bezeq's infrastructure because of the difficulty in reaching some of the sites and the lack of a sufficient fiber optic infrastructure. The negotiations apparently related to 200 sites that Cellcom has trouble reaching independently.
Cellcom CEO Amos Shapiro met Bezeq CEO Avi Gabbai and asked him to lower the transmission rates Bezeq charges. Gabbai rejected the request, noting that Cellcom was due to terminate the contract.
Cellcom uses Bezeq's infrastructure instead of an independent infrastructure to reduce costs and record it as an investment rather than an expense.
Although Cellcom owns a developed fiber optic network, and makes massive use of microwave Ethernet technology for its cellular sites, it is finding it hard to totally disconnect from Bezeq, and is therefore returning to the negotiating table to reach a deal for connecting some sites. Cellcom will connect 200 sites independently, or use infrastructure of Hot Cable Systems Media Ltd. (TASE: HOT).
Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2009
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