The Antitrust Authority will not allow Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) to merge with its subsidiary DBS Satellite Services (1998) Ltd. (YES), until after the establishment of the wholesale market, which will allow Bezeq's competitors to use its infrastructures.
Sources inform ''Globes'' that the Antitrust Authority recently asked telecommunications carriers for their opinion about the progress of negotiations on the wholesale market. The sources believe that the Antitrust Authority found it difficult to justify its refusal to allow the Bezeq-YES merger after the establishment of the new wholesale market, which is expected to consist of four telecommunications groups, two of which - Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) - are due to buy infrastructures from Bezeq and HOT Telecommunication Systems Ltd. (TASE: HOT) at reduced prices.
Until now, the Antitrust Authority has opposed the Bezeq-YES merger on the grounds that Bezeq's control of both landline telephony and satellite communications infrastructures would give it too strong a holding in these telecommunications infrastructures (the third infrastructure is cable). The Restrictive Trade Practices Tribunal rejected this position and proposed allowing the merger with conditions, but the Antitrust Authority appealed against the ruling to the Supreme Court, which overturned the lower court's ruling. Bezeq believes that the decision harms YES, because the ban on cooperating with Bezeq to offer customers telephony, television, and Internet services, gives Bezeq's competitor, HOT, an edge.
The Antitrust Authority and Bezeq have been in talks about the Bezeq-YES merger for years, in view of changes in the telecommunications market, the most important of which has been the massive switch by customers to viewing content online, and the higher speeds on landline networks which make it possible to watch television via the Internet.
Today, Bezeq announced that it has reached an agreement with Partner about the structure of the new wholesale market, but that the important issue of the price was still open. The carriers decided that if they cannot reach agreement on the price, the Ministry of Communications will decide the matter.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2012
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