"Israeli wireless operators and Internet service providers (ISPs) are violating regulations in Palestinian Authority areas. They are illegally competing against PalTel Palestine Telecommunications Co. - Itisalat (PSE:PALTEL) and Palestine Cellular Communications (Jawwal)," alleges PalTel CEO Mousab Khorma.
Khorma also claims that Israel's Ministry of Communications takes unilateral decisions that harm the interests of Palestinian communications companies. "As a result, we are unable to utilize our potential sources of revenue," he says.
Khorma said the recent decision to slash wireless connectivity charges also applies to Palestinians, for instance a call from a Palestinian fixed line phone to an Israeli wireless phone, even though the Palestinians were not a party to the decision.
Palestinians also have no direct access to international switchboards, forcing PalTel to place international calls through Israeli international calls carriers. PalTel seeks the cheapest Israeli carrier when pricing its international services for its customers. The problem is greatest when Palestinians try to place calls to Arab state with which Israel has no diplomatic relations, requiring calls to go through mediating switchboards, raising the price of calls.
Khorma said Israel's four wireless operators operate in Palestinian areas illegally, controlling 60% of the Palestinian market, without licenses from the Palestinian Ministry of Communications. He says the Israeli companies flood the Palestinian market, offering substantially lower prices than in Israel, which he claims is an attempt to break Jawwal.
A Palestinian court in Ramallah recently ruled in favor of Jawwal's petition and ordered the Israeli companies to cease operating. Khorma said Jawwal was examining ways to implement the court ruling.
Israeli ISPs violate PalTel's exclusivity in providing Internet infrastructures and equipment in the territories, by bypassing PalTel to provide Palestinians customers with Internet services. Khorma says Israeli ISPs and their Palestinian partners control 70% of the Internet market in the Gaza Strip. Israel's Ministry of Communication does nothing to prevent this.
PalTel has 275,000 fixed-line subscribers and Jawwal has 300,000 wireless subscribers. PalTel has 1,550 employees and Jawwal 400. Their aggregate profit totaled $15 million in 2003.
Israel's Ministry of Communications stated in response that the information was incorrect and distorted. It stated that Israel takes care to cooperate with Palestinian communications companies, which are considered a great economic success in the Palestinian Authority. "We regret that our goodwill and great assistance is being used as a superficial propaganda tool," said the ministry.
Published by Globes [online] - www.globes.co.il - on August 18, 2004