Mobile virtual network operator (MVNO) 015 Hallo Ltd. today asked the Ministry of Communications to enforce the company's agreement with mobile carrier Pelephone Communications Ltd., after Pelephone, a Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) subsidiary, announced last night that the agreement was cancelled.
Hallo acquired the operations of Cellran Cellular Communications Ltd., which had an agreement to operate a virtual mobile network on Pelephone's infrastructure. Pelephone says that this agreement was cancelled a week ago, but Hallo contends that Pelephone cannot unilaterally cancel the agreement.
Hallo also dismisses Pelephone's contention that the contract was cancelled because Cellran failed to meet its commitments. Hallo says that Pelephone tried to amend the contract, and cancelled it unilaterally when Cellran refused.
The Ministry of Communications will have to make a decision quickly whether to compel Pelephone to honor the contract. If the ministry does so, it will mainly be because it perceives Pelephone as trying to prevent the entry of a new competitor into the market.
If the Ministry of Communications does not intervene, Hallo will have to turn to the courts, which could be problematic for it. Compelling enforcement of agreements between carriers has not been very successful in the long run.
MVNOs need close cooperation with the host carrier. All the MVNOs entering the market - Rami Levy Communications Ltd., Home Center Mobile Ltd., and, shortly, Alon Cellular Ltd. - rely on close cooperation with the host carrier. A direct confrontation between Hallo and Pelephone could mean goodbye for Hallo.
Yesterday, Hallo, an international calls carrier, announced the launch of MVNO services, offering an unlimited calls and SMS package at NIS 99 per month.
Published by Globes [online], Israel business news - www.globes-online.com - on March 28, 2012
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