Israel Electric Corporation (IEC) (TASE: ELEC.B22) today obtained a permit to conduct a pilot to test the provision of telecommunications services over the utility's fiber optic network. The pilot in Kiryat Shmona will include 150 households, which will receive Internet access over fiber optic lines. The households will be able to obtain telecommunications services from several providers.
Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), NetVision Ltd. (TASE: NTSN), and possibly 012 Smile Networks Ltd. are due to participate in the pilot. The objective is to test the usability of IEC's fiber optic network for telecommunications services.
If IEC is permitted to provide telecommunications services, this will cause a shake-up of the market. IEC owns thousands of kilometers of fiber optic cables, and if they are efficiently used to provide telecommunications services, this will be a major threat to Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Hot Cable Systems Media Ltd. (TASE: HOT).
In many countries, power companies provide telecommunications services to operators, although the utilities may not operate independently. This has been blocked for years in Israel because of initial conditions set by the Ministry of Finance on IEC, including restructuring of the company before it is allowed to enter new fields.
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010