A top executive from Telecom Italia SpA (NYSE: TI; BIT: TAT) visited Israel last week to prepare for a subsidiary MedNautilus to bid in the Israel Electric Corporation (IEC) (TASE: ELEC.B22) telecommunications infrastructure tender. MedNautilus operates the undersea telecommunications cable that links Israel with the world.
Sources inform ''Globes'' that Telecom Italia has asked the Ministry of Communications for a permit to bid in the tender, because its present terms stipulate that a company with an operator's license from the ministry is barred from the tender, which is intended solely for new players in the sector.
Telecom Italia is waiting for the tender's Request for Information (RFI).
MedNautilus sees value in connecting its undersea cable with IEC's nationwide fiber optic network. The company's potential rival in the tender, Tamares Telecom Ltd., faces a similar problem and has also asked the Ministry of Communications for permission to bid in the tender.
Although Ministry of Communications wants new players to bid in the tender, it does not consider either MedNautilus or Tamares Telecom as companies that compete in the domestic telecommunications infrastructure market, so it will be simple to approve their requests, with suitable restrictions.
Both the Ministry of Communications and the Antitrust Authority are examining MedNautilus's standing in the market, because it has had a monopoly in the undersea cable and there is concern that it will take an aggressive tariffs policy with the entry of new companies in the market.
Published by Globes [online], Israel business news - www.globes-online.com - on September 27, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011