The Ministry of Communications has decided to cut Bezeq Israeli Telecommunication Co. Ltd.'s (TASE: BEZQ) tariffs, after coming to the conclusion that Bezeq has surplus profits arising from high telephony prices controlled by the ministry. Over the past few months, the ministry has been examining the matter, and meant to keep it under wraps, but it appears that Yoaz Hendel's dismissal as minister of communications by Blue & White leader Benny Gantz, following Hendel's decision to join the new party being formed by Gideon Sa'ar, made him publicize the decision on his last day in office in order to reap the fruits of the achievement.
After 17 years in which Bezeq's telephony tariffs have not been updated, prolonged staff work at the Ministry of Communications has been concluded, and Hendel decided to announce a hearing on reducing Bezeq's domestic fixed-line charges, as part of a review of the supervision mechanism and of the level of controlled charges for this service. The proposed revision to the tariffs will mean lower charges for Bezeq's domestic fixed-line subscribers and will save the public about NIS 400 million annually (including VAT).
The change will reduce the monthly payment by Bezeq subscribers by 40% from NIS 50-60 to NIS 30-40 (including VAT), reducing households' telephone bills by hundreds of shekels a year.
The ministry recommends a uniform fixed monthly charge of NIS 20.82 before VAT (NIS 24.36 after VAT). This is nearly 60% less than the current fixed charge. The per-minute call price will fall to NIS 0.012.
In addition, under the new tariffs, all the alternative payment schemes will be abolished, and all Bezeq subscribers will switch to the "basic" scheme, namely separate payments for the fixed charge and for calls. Those who prefer a single fixed payment will be able to join the service package offered that is limited to 500 call minutes.
The ministry is setting the new fixed charge and call charges as maximum amounts, and other controlled prices will also become maximum prices rather than set prices. Bezeq will no longer require approval from the ministry to market alternative payment packages and bargains.
Ministry of Communications director general Liran Avisar Ben-Horin said, "Revision of the tariffs is due after seventeen years and the changes in the telecommunications market and the technological developments in recent years, and it will create a correct balance between the costs to the company of providing service and subscribers' payments."
Outgoing Minister of Communications Hendel said, "We are coming out today with a move designed to right a prolonged wrong to consumers that affects every household in Israel, in which we are revising Bezeq's controlled fixed-line telephony prices downwards."
Bezeq's share price is down by nearly 14% on the Tel Aviv Stock Exchange this morning.
Published by Globes, Israel business news - en.globes.co.il - on December 15, 2020
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