Senior Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) executives met last week with Ministry of Communications representatives and presented Bezeq's plans for deploying fiber optic infrastructure. A previously scheduled meeting was canceled after the Ministry of Communications published a public statement about fiber optics the previous evening. Bezeq felt that the Ministry of Communications was coming to the meeting with fixed positions, and decided to officially respond to the ministry's statement. Mediation efforts by several parties persuaded the two sides that dialogue was preferable, because the two sides shared a common goal in investment.
At the meeting Bezeq presented its plan and explained the difficulties and obstacles in implementing it.
Bezeq said that the demand for universal deployment on fiber optic bases could not be fulfilled. The company said that it planned to combine a number of technologies as the basis for its plan, and would deploy fiber optic infrastructure in 80-90% of communities in Israel, while upgrading speeds in the other communities using other technologies, due to technical difficulties.
Sources inform "Globes" that Ministry of Communications director general Netanel Cohen is attempting to obtain the Ministry of Finance's consent to finding a solution for universal deployment, either through a special budget or solutions such as an investment fund subsidized by the Ministry of Communications for universal deployment. It is believed that the Ministry of Communications realizes that demanding universal fiber optic deployment from Bezeq is unrealistic, and will make concessions in the matter.
The sources added that the Ministry of Communications was considering creative solutions for vertical deployment of fiber optics, so that buildings in which fiber optics are deployed will not need more than one fiber per building, and the competitors wishing to provide services using the deployed fiber will pay the operator who deployed the fibers. The aim is to streamline and improve the work interfaces, so that competition will eventually be based on the services that the operators provide, instead of every building having several fibers, which is unnecessary.
The Ministry of Communications plans to persuade the Ministry of Construction and Housing to require contractors to lay fiber optics for apartments in new buildings in order to avoid the necessity of redeploying them.
Sources also said that the Ministry of Communications was aiming at a situation in which the new minister following the elections would have a comprehensive plan to consider that would be a breakthrough in promoting the project.
In addition to the positive aspects of the meeting, there are still disputes and gaps, but sources on both sides who participated in the meeting expressed cautious optimism about the future. It is difficult to predict what will happen in the negotiations in the near future, especially with the upcoming elections, but this is the first time that the Ministry of Communications is starting to realize that investment in a project on such a vast scale requires the adaptation of its regulatory policy to the new era, and that the most important thing is not to adhere blindly to its current policy. The parties agreed to continue their talks.
Published by Globes, Israel business news - en.globes.co.il - on January 13, 2019
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