Cellcom and Partner mull merging TV activities

Both companies are losing money on their TV activities but believe that together they can be profitable.

Israeli telecom operators Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Co. Ltd. (Nasdaq: PTNR; TASE:). Cellcom's board of directors has been concerned about the continuing losses of its TV service and have been seeking a merger for some time. Partner also makes a loss on its TV activities and the belief is that together the companies can make a profit.

Both Cellcom and Partner also feel threatened by the expected entry of Disney Plus and HBO Max into the Israeli market in 2022 as well as the new Keshet-RGE streaming service.

On the one hand purchasing content is expensive for Cellcom and Partner while the Israeli consumer expects a reasonably priced triple package from telecoms, especially when buying fiber optic services.

Partner and Cellcom might also consider buying content together rather than a full merger. Partner is unlikely to acquire Cellcom because of the cost of changing the TV box sets of Cellcom's 250,000 TV subscribers. Partner also has 250,000 TV subscribers. Any merger would require the approval of regulatory authorities including the Israel Competition Authority. But such a merger is likely to be approved with Cellcom and Partner relatively small players compared with Bezeq unit Yes and Hot and international players like Netflix.

Published by Globes, Israel business news - en.globes.co.il - on January 16, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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