A dramatic decision by Minister of Communications Gilad Erdan on his last day in office. Erdan decided today to complete the policy of opening fixed-line communication to competition (wholesale market reform). Erdan accepted the Ministry ofCommunications opinion that there is no reason not to make a decision on the matter, even without a hearing for Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ).
The outgoing Minister of Communications chose to order the market to be opened to the main service under the policy, known in the industry as “bit-stream access.” In this service, the competitor leases the Bezeq internet line, end to end. The remaining services, which are less significant in the first stage for market competition, will be opened at a later stage.
Additional services that have been priced by the economics division and were agreed upon are telephony services and internet television services (multicast). As far as is known, Erdan decided to revise the bit-stream access service fee upward, but not significantly.
This morning, a meeting was held at the Ministry of Communications, with the ministry’s top management, in which they discussed the matter of opening the market. As was reported yesterday in “Globes,” the Minister of Communication pressured his office to complete the work before his departure for the Ministry of Interior, and, in recent days, management has made great efforts to accomplish the task. This morning, the figures were presented to the Minister of Communications, who found the to be work complete and ready, and therefore announced he would sign it.
Those present were faced with the question of whether Erdan would make a decision regarding opening the market to competition without conducting a hearing for Bezeq, and it appears that there was a unanimous decision that there was no reason not to make a decision, even without a hearing. Bezeq sent a letter to Erdan last week asking to be allowed to voice its reservations regarding the model, however, the ministry nonetheless decided it was not necessary. It is possible that Bezeq will file an appeal to the Ministry of Finance decision with the High Court of Justice.
Bezeq's share price fell more than 5% on the TASE today on the news
Published by Globes [online], Israel business news - www.globes-online.com - on November 17, 2014
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