Minister of Communications Gilad Erdan and the Ministry of Finance have passed a series of telecommunications reforms in the Economic Arrangements bill, including in multichannel television. The reforms include the narrow broadcast package by satellite broadcaster DBS Satellite Services (1998) Ltd. (Yes) and Hot Telecommunication Systems Ltd. (TASE: HOT.B1), which provides cable television, giving Erdan the authority to lower prices or intervene in the composition of stations. He also received the authority to require Yes and Hot to sell the narrow broadcast package to companies wanting to enter the television market.
A telecommunications company that wants to provide television broadcasts will be allowed to market Yes or Hot's narrow broadcast packages. It can buy the package of channels at a price approved or ordered by the minister, and it will have the right to add its own channels to the package and sell them to its customers.
The reform is necessary because any company that wants to compete against Hot or Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), Yes's parent company, will have to supply television service to its customers in addition to telephony and Internet. Television is the most expensive item of the package, and without a solution for broadcasts, new companies will find it difficult to enter the landline market. The intention is mainly Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), which want to compete in telephony and also provide television broadcasts.
Erdan has also secured positions for the Ministry of Communications, including the position of chief scientist. This is an important job, which if properly utilized should help the ministry formulate a long-term strategy. It was also decided that the Ministry of Communications' frequencies committee will be held by the civilian sector, which is currently controlled by the defense sector, after a change by Ariel Atias, when he was minister of communications.
The ministries also agreed to expand the number of channels offered by digital terrestrial television (DTT). A tender will be published, the winner of which will decide which topics will account for at least 75% of the broadcasts: sports, children's shows, movies, nature, television series, documentaries, culture, or news. The tender's winner will have the right to finance the broadcasts with advertisements, except for the children's shows, or by charging customers.
Published by Globes [online], Israel business news - www.globes-online.com - on May 16, 2013
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