Minister of Communications Moshe Kahlon today slashed the inter-network connectivity fee 73% to NIS 0.068 per minute from the current NIS 0.251, as of January 1, 2011. The connectivity fee will continue to be cut in stages to NIS 0.055 per minute by 2014.
The reduction is based on the final recommendations by NERA Economic Consulting, which examined the cost pricing model of cellular network components. Mobile carriers charge subscribers connectivity fees for calls from another network.
Kahlon slammed the mobile carriers for not cooperating and for opacity. "They tried to undermine the credibility of the NERA report. They did not provide the data requested, and their cooperation was only very limited," he said.
"We will publish additional data for the good of the public. The companies have made billions at our expense because of the lack of transparency. I therefore ask the cellular companies for a little modesty when talking about transparency. Israelis cannot understand their cellphone bills, because of the lack of transparency. We acted out of public responsibility, and we have no intention of bringing about the collapse of any company."
The reduction in the connectivity fees will cost Israel's three leading mobile carriers - Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), and Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) unit Pelephone Communications Ltd. - NIS 3 billion a year.
Cellcom's share price fell 0.5% by midday on the TASE to NIS 105.60, but Partner's share price rose 0.3% to NIS 63.76 and Bezeq's share price rose 0.5% to NIS 8.60.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2010
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