The Internet market is sizzling and Internet Service Providers (ISP) have been lowering prices and coming out with aggressive sales campaigns over the last few weeks. ISPs have eliminated cancellation fees, and are eager to gather as much market share as possible before the conclusions from the Hayek committee, which calls for the revamping of fixed line communications, are implemented. Another reason is Bezeq Israeli Telecommunication Co. Ltd.'s (TASE: BEZQ) halving prices for high-speed Internet, which has put pressure on prices for lower speed packages.
Following a standard check of Bezeq and ISPs, it appears that ISPs are currently offering the most popular packages for only NIS 30 a month, 10 MB with Bezeq, and 12 MB with HOT Telecommunication Systems Ltd. (TASE: HOT). Last year, this package cost twice as much at Bezeq. Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) ISP subsidiary 012 Smile Telecom Ltd. sells 12 MB Internet packages through HOT for NIS 30, and NetVision Ltd. (TASE: NTSN) sold a similar priced package through Bezeq. Bezeq International has just come out with a promotion in which it is holding a lottery for an iPad 2 for new subscribers, and Smile has begun an aggressive campaign of eliminating all cancellation fees.
This competition began with regulatory changes that began with Bezeq's reverse bundle, following which the ISPs began feeling pressure to lower prices. Bezeq in effect set prices transparently. Every customer can pressure his ISP to match Bezeq's prices, and if they don't, then he can change to the supplier bundling with Bezeq.
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2011
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