The government will ensure that electricity revenue will not subsidize telecommunications operations.
Sources inform ''Globes'' that Israel Electric Corporation's (IEC) (TASE: ELEC.B22) entry into the telecommunications market will be included in the next economic arrangements bill. The bill also states that IEC will not own more than 49% of controlling interest in the telecommunications company, and will not control it.
The bill also states that 20% of the new company's ownership will be held by a single company that is not a government company. In order to prevent cross subsidization, IEC will not be allowed to use revenue from electricity sales to subsidize the setting up and operation of the telecommunications operations, in whole or in part.
The government's plan also states that the telecommunications company will be required to deploy IEC's fiber optic network nationwide as a condition of obtaining an inland communications license. This means that the company will only be able to start offering commercial services in late 2011 or in 2012.
IEC is currently running a pilot of its fiber optic network in Kiryat Shmona.
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010