The cable companies' shareholders have signed an agreement to establish Hot Telecom as the joint cable infrastructure company of Golden Channels, Matav-Cable Systems Media (Nasdaq: MATV; TASE:MATV) and Tevel. Hot Telecom will provide telephony and high-speed Internet services.
Under the agreement, each company's stake in Hot Telecom will be determined on the basis of its customer situation on November 1. The agreed-upon formula combines the number of customers for television and for high-speed Internet, so that the high-speed Internet penetration by each company will be a critical factor in determining its stake in Hot Telecom. As Tevel currently has the smallest number of high-speed Internet customers, because it began providing the service later than the other two companies. On the other hand, it owns a third of Golden Channels.
The estimated stakes of each company in Hot Telecom, excluding the effect of Tevel's stake in Golden Channels, is as follows: Tevel -34%; Golden Channels - 40%, and Matav - 26%, plus or minus one or two percentage points.
The estimated investment in setting up the first stage of the telephony network is NIS 350 million over three years, the amount the cable companies committed to Antitrust Authority director general Dror Strum, and which is one of the conditions for his approval of the merger.
Senior cable companies' executives believe they will meet Strum's timetable. Strum extended the deadline for the cable companies' merger and their collaboration until November 15, but made a further extension conditional on the companies submitting to him a telephony license, and on the sale of all their holdings in the content companies.
The Ministry of Communications' work on the draft license is in the final stages, on the basis of the cable companies' application from last year. The ministry and cable companies are reportedly fully cooperating in order to meet Strum's timetable. The ministry is due to submit the draft license to the companies this week, provided that the companies have no major objections.
Eliezer Fishman, the controlling shareholder in Golden Channels, is also the controlling shareholder in ''Globes''.
Published by Globes [online] - www.globes.co.il - on October 29, 2003