Sources inform ''Globes'' that 012 Smile Telecom Ltd. may bid for 3G UMTS frequencies rather than rely on entering the mobile market as an mobile virtual network operator (MVNO). The company's plan got a strong boost with reports that the Ministry of Communications plans to slash inter-network connectivity rates, which will help its MVNO plans. The company is now waiting for clarifications about setting up an independent network.
The joint Ministry of Communications and Ministry of Finance tenders committee is waiting for a feasibility study by consultancy firm Shaldor Ltd., which has recommended easier terms for the winner of the UMTS frequencies tender. Smile is waiting to see the tender's final terms, and if they are good, the company may decide to bid in the tender.
Smile, under the new ownership of Joseph Maiman-controlled Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL), and run by CEO Stella Handler has little choice but to become a mobile operator. Currently, the company is an international calls and Internet services provider (ISP), with some inland telephony business, and is not part of a larger telecommunications group. For this reason, the final Ministry of Communications policy on protecting new mobile operators is critical.
For example, regulation gives mobile operators considerable leeway, but is highly restrictive in the landline market. Bezeq Israeli Telecommunication Co. Ltd's (TASE: BEZQ) telephony rates are tightly controlled by the government, and it must maintain structural separation between its units.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2010