The Ministry of Communications will ask Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) to cut the cost of its naked ADSL service (i.e., Internet access without a telephone service) by 40%. A top ministry official told "Globes" that the ministry expects the company to accede to the request, but that if it does not, the ministry will use its authority to compel the company to do so.
The Ministry of Communications found that Bezeq has cut its Internet access prices by 40%, except for its naked ADSL service, which has stayed at NIS 25 per month for years. Since the company sells communications services in various plans for less than NIS 25 per month, this price reflects a mark-up that harms competition and consumers who want telephony services from Bezeq's competitors.
The Ministry of Communications rejects Bezeq's argument that naked ADSL is not under regulatory supervision, and believes that it has the authority and duty to intervene in the service price, because of its effect on competition.
The ministry has not explicitly ordered Bezeq to lower the price to the discount price it offers customers - i.e. 40% - because it believes that a polite request should be made first. Only if Bezeq refuses will the ministry exercise its authority. This will give the company the opportunity to make its case in a hearing.
Published by Globes [online], Israel business news - www.globes-online.com - on August 23, 2011
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