Partner Communications Co. Ltd. (Nasdaq: PTNR; TASE:PTNR and Bezeq Israel Telecommunications Company Ltd. (TASE:BZEQ) have announced the signing of a long-term irrevocable right-of-use (IRU) agreement. As part of the agreement, Bezeq will provide Partner with fiber-optic infrastructure for 15 years. The value of the agreement could amount to NIS 1 billion.
Under the agreement, which will come into effect next month, Partner will purchase 120,000 non-specific fiber optic infrastructure lines in buildings connected to Bezeq's fiber-optic infrastructure. Partner will sell the services based on infrastructure that it leases as part of the "wholesale market," which allows it to market packages in one account and allow customers to manage all their services through one communications provider.
Partner notified the Tel Aviv Stock Exchange (TASE) that the right to use the fiber optic lines will be granted in five equal annual installments, with the first installment beginning on January 1, 2023. Partner will pay Bezeq for the right of use NIS 574 million plus VAT for the first agreement period, which will be divided into five equal payments at the start of 2023 until 2027, plus half of the linkage differences.
Partner will also pay annual maintenance fees at a rate of 4% of the overall payment, plus linkage differences, in accordance with the terms set forth for all of the fiber optic lines that it is granted a right of use until that year.
Bezeq chairman Gil Sharon said, "The level of access to fiber optic lines at the end of 2022 will reach 70% of households and nearly 100% by the end of 2024. The IRU agreement makes it easier for service providers to market fiber optic line connectivity and will allow improved offers to customers and the competition to provide fiber optic connectivity services will increase."
Published by Globes, Israel business news - en.globes.co.il - on December 22, 2022.
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