Minister of Communications Moshe Kahlon said today that he opposes the rate hikes announced by HOT Telecommunication Systems Ltd. (TASE: HOT), and takes a severe view of them. He has asked the company's executives to reconsider all possible options to change the situation, and that he expects them to understand that in the current climate, the ministry will not continence a rate hike in the telecommunications market.
Yesterday, HOT announced that it was raising its rates for all its cable, telephony, and internet services. The announcement has drawn sharp criticism because the company raised its prices because it could, given the lack of competition, and lack of fear of a response from the Ministry of Communications.
HOT said that the price hike was negligible, and that it did not apply to all customers. It said that the price hike affected only 30,000 subscribers, who will pay a small extra fee for the services they consume. The company simultaneously announced that it was readying the launch of new plans, which would sharply reduce prices.
Beginning on February 16, HOT's prices will rise by several shekels, depending on the service and the subscriber's plan. For example, video-on-demand will rise to NIS 19.90 per month, and prices for separately purchased channels and packages will also rise. The subscription fee for a telephone line will rise to NIS 10 per month, and the cost of calls will rise by NIS 0.10 for calls to both landline and mobile numbers. Triple play subscribers will be less affected, but prices for services will still go up.
Regulations allow for companies to raise prices from time to time, but a company must first notify its subscribers in an organized way, such as a notice on TV screens for cable subscribers, as well as letters sent by mail.
HOT said that it would not discuss its conversations with Kahlon in the press.
Patrick Drahi owns 65% of HOT through Cool Holdings Ltd. HOT's share price fell 2.1% today to NIS 40.34, giving a market cap of NIS 3.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012
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