Bezeq raises internet prices 22%

New subscribers will pay NIS 55 per month for a 5-mega package, instead of NIS 45.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has raised its internet prices by 22%. New subscribers will NIS 55 per month for a 5-mega package, instead of NIS 45. This is Bezeq's second internet rate hike within three months, after a sharp increase in April.

There are several possible explanations for Bezeq's latest rate hike. The first is to equalize rates for new and current subscribers, to prevent discrimination. The second is apparently the company's response to the Ministry of Communications' cancellation of the fixed fee for an ADSL only line (i.e. no telephone line), which has forced the company to cover tens of millions of shekels in lost revenue a year. The third, the previous rate hike apparently caused subscribers to switch providers, as competition in the telephony and internet supplier sector rises, forcing the company to cover lost revenue.

Bezeq's prices are only for one year, after which the price rises to NIS 75 a month for a 5-mega plan, as well as for 10 through 100-mega plans.

Initial reports say that the Ministry of Communications is displeased by Bezeq's rate hike. Since internet prices are not supervised, there is little the ministry can do to block the rate hike, but the action will probably result in some kind of reaction.

Bezeq's share price rose 1.3% by early afternoon to NIS 4.30, giving a market cap of NIS 11.5 billion.

Published by Globes [online], Israel business news - - on June 19, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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