Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) is buying MVNO (mobile virtual network operator) Home Cellular, "Globes" has learned. The deal was closed last week and has been reported to the Ministry of Communications for approval.
The value of the deal is not substantial, and is estimated at a few million shekels, and so Cellcom was not required to notify the stock exchange. Home Cellular has about 20,000 subscribers.
The deal to buy Home Cellular, following on from Pelephone's acquisition of MVNO YouPhone, is ample proof that Israel's mobile telephony market cannot sustain the number of players active in it, and that the small operators are finding it difficult to cope with the way competition in the market has developed.
The deal between Cellcom and Home Cellular, of the Home Center group, leaves Rami Levy Hashikma Marketing Communications as the sole surviving MVNO. Rami Levy operates on the Pelephone network, and manages to survive by virtue of the fact that it has not invested in any cellular infrastructure, employs a minimum staff, and sells mobile services as a marketer only, and even that through the check outs at the Rami Levy supermarket chain.
While the number of MVNOs has been cut down, competition in the mobile telephony market has nevertheless continued to be fierce, and prices remain low. All the same, there is a feeling that the fall in prices has slowed somewhat, and that most customers have already improved their service packages, and will not be looking to change the package and switch provider for the sake of a NIS 20-30 difference. Golan Telecom and Hot Mobile continue to recruit subscribers abandoning the veteran providers, but the rate at which this is occurring appears to be falling.
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2015
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