Partner, Hot Mobile sign network sharing agreement

The carriers will set up a subsidiary that they will own in equal shares, which will operate and develop a cellular network.

On Friday, Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) announced a network sharing agreement with Hot Mobile Ltd. As "Globes" reported, under the agreement and subject to regulatory approval, the carriers will set up a subsidiary that they will own in equal shares, which will operate and develop a cellular network by pooling their radio access network infrastructures to create a single radio access network. Each company will retain and operate its own core network and will be responsible for providing cellular telecommunication services to its own customers, including customer service, value-added services, marketing and sales. The agreement is due to come into effect by the end of 2014. >p>Under the long-term 15-year agreement, Partner and Hot Mobile have signed an interim rights of use agreement, under which Partner will grant Hot Mobile, when possible, rights of use of its cellular network in order to supplement Hot Mobile’s network coverage.

Since it began operations, Hot Mobile has been hosted on Pelephone Communications Ltd.'s network, and the announcement of the network sharing agreement between Hot Mobile and Partner has important consequences for Pelephone. Pelephone has earned tens of millions of shekels per quarter from hosting Hot Mobile, and these profits will now go to Partner.

Minister of Communications Gilad Erdan said in response, "I welcome this agreement. It will reduce the number of antennas nationwide. There is no justification for the deployment of five separate networks in a small country like Israel. Together with the development of telecommunications infrastructures in Israel, other considerations should be taken into account relating to people's quality of life and the character of public space. The network sharing agreement will optimally foster competition, enable full exploitation of the spectrum, and save money to the benefit of consumers. The Ministry of Communications under my leadership will continue to encourage competition and promote the deployment of advanced telecommunications infrastructures."

Hot Mobile chairman Herzel Ozer said, "I welcome the agreement between Hot Mobile and Partner, which is an important milestone in the mobile market, and is in line with Minister of Communications Gilad Erdan's policy on sharing sites and frequencies. This step will enable us to move forward and launch 4G services and will position Israel alongside the most advanced countries in the world. We intend to continue investing in the development of infrastructures, while keeping the best prices for our customers."

Partner CEO Haim Romano said, "We are heeding the call of Minister of Communications Gilad Erdan for cooperation between the operators in order to reduce the number of network sites and to combine, as much as possible, the cellular operators' infrastructures, taking into account environmental protection considerations and public opinion regarding network sites. This cooperation, the first of its kind in Israel, will increase competition in a manner that will benefit the consumer, will develop advanced cellular infrastructures and enable maximal utilization of the existing spectrum for the benefit of launching the fourth generation services. In addition, the cooperation will address the surging demand for mobile data services, will significantly improve the customer's experience and will enable him to enjoy the most advanced services in Israel."

Pelephone said in response, "Pelephone and Hot have an exclusive nationwide roaming agreement through the end of 2014, and we expect Hot to honor the agreement."

Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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