Sources inform ''Globes'' that the government will end price controls on Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) as soon as the wholesale market is announced and the structural separation is cancelled a few months later.
At a meeting this morning, officials from the Ministry of Communications and Ministry of Finance discussed the final format of the wholesale market, which will be the future structure of Israel's telecommunications market.
After many discussions and disagreements, Minister of Communications Moshe Kahlon decided to cancel price controls on Bezeq immediately upon creation of a wholesale market with the agreement of Bezeq and its competitors. The requirement for structural separation in the company will be cancelled a few months later.
Kahlon has reserved flexibility in order to avoid delaying the cancellation of price controls unnecessarily, and to be able to verify that the wholesale market is working seriously.
It was also decided that Kahlon will call on Bezeq and HOT Telecommunication Systems Ltd. (TASE: HOT) to reach agreements on the wholesale market - in other words, the user price for their landline networks. If the parties can reach agreement, the Ministry of Communications will not intervene, but if there are no agreements on a price with mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), and with anyone who wants to use Bezeq and HOT's landline networks, the ministry will set the price itself and intervene in favor of carriers with no landline infrastructures.
Kahlon's final document is due to be published within a few days. It will probably resemble the Hayek committee recommendations which were presented six months ago.
Published by Globes [online], Israel business news - www.globes-online.com - on April 17, 2012
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