The Ministry of Communications intends to reduce prices for Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) Internet lines (Naked ADSL). Sources inform "Globes" that the ministry decided to split up handling complaints by ISPs against Bezeq and its sales packages from intervening on the price of lines. This is because the ministry needs to have an economic foundation on which to base the Naked ADSL line price reduction. Also, it is quite possible that it will hold a hearing for Bezeq regarding this issue. Another alternative is to wait for Frontier Economics, commissioned by the Hayek Committee, to set Bezeq's tariffs.
The Ministry of Communications approved Bezeq's charge of NIS 25 for Naked ADSL lines, designed for Internet and not for telephony. It is now undeniably clear that the price is inordinately high: This is because Bezeq sells packages that include telephony and Internet for NIS 20 per month, which includes user fees.
The ministry is considering lowering the price by relying on the fact that it approved of Bezeq's price for the line, but did not set it. In other words, the ministry does not feel obligated to stick to the price that it allowed Bezeq to charge, and believes that it has the right to intervene now that it feels that the price is too high.
There are differences of opinion in the ministry on whether or not the ministry should intervene now over line prices, or if it should wait for Frontier. Those who believe that they should wait for the economic study say that they can set a considerably lower price now, then wait until Frontier completes the study and only then settle the accounts between the providers and Bezeq.
Others believe that the ministry must intervene immediately since the unjust prices Bezeq is charging are sky high and it is impossible to sit by idly, and that it is imperative to find an appropriate mechanism to be used immediately that meets legal criteria.
Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2011
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