The sale of Mirs Communications Ltd. to Patrick Drahi is the greatest Chanukah gift the Israeli telecommunications market could have received. Minister of Communications Moshe Kahlon should ask himself how he got so lucky.
Kahlon has been handed a new Israeli mobile operator with an independent infrastructure. There is no better news for the Israeli telecommunications consumer, since competition based on companies with their own infrastructures is better than competition based on companies that lease infrastructure from the current operators.
For now, the Ministry of Communications wants to complete as quickly as possible the publication of the tender for frequencies and regulatory easing that will allow Drahi to establish a network expeditiously.
The sale of Mirs marks the change that Motorola Inc. (NYSE: MOT) is undergoing around the world. Mirs is the last mobile carrier owned by Motorola, and its sale was held up until now by one man: Motorola Israel general manager Elisha Yanay, who announced his resignation three days ago. Yanay, who also serves as Mirs chairman, strongly opposed the sale, and did all that he could to keep the company.
With the sale, for the first time, Mirs will be freed from the narrow interests of Motorola. Joseph Maiman, Motorola's partner in Mirs until a few years ago, left the company completely. Motorola was no help to any operator it partnered with, not to Pelephone Communications Ltd. at the time, nor to Mirs.
Drahi will have to set up a new mobile network as quickly as possible in to order sever the ties with Motorola as fast as he can and to start seizing market share from Israel's three established mobile operators, Pelephone, Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). Finally, there is an opportunity for competition in the private market.
At the moment, it is not clear what Hot Cable Systems Media Ltd. (TASE: HOT) will look like after its merges with Mirs. Drahi will have his work cut out to establish a telecommunications group even before he has completed the measures needed to improve HOT's condition. Members of his team say that he'll need several years to bring HOT to the level of his French cable company. He'll have just as much work at Mirs.
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2009
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