The full details of the network sharing agreement between Golan Telecom Ltd. and Hot Mobile Ltd. have been revealed: Golan Telecom will pay an annual NIS 200 million (NIS 16.6 million monthly) to use Hot Mobile's network and will not be required to pay for increases in data consumption (with a limitation of up to 50%). An increase of over 100,000 in Golan Telecom subscribers will lead to a rise in payment.
Sources inform "Globes" that Hot Mobile and Golan Telecom discloses the details of the agreement between them in a cartel exemption request submitted to the Antitrust Authority. Golan Telecom reached a network sharing agreement with Hot Mobile in the past month, after failing to reach an agreement with Cellcom Ltd. The request for a cartel exemption was submitted to the authority because of an NIS 600M loan Hot Mobile will provide to Golan Telecom for a 10 year period.
The companies claim that the agreement increases competition between them, since Golan Telecom will pay Hot Mobile a much lower sum than it was to pay Cellcom, which will enable it to lower its prices. According to the current agreement, Golan Telecom pays Cellcom NIS 21 million per month (NIS 252 million annually), without data use limitations. The agreement shows that Cellcom intended to raise the sum significantly and limit Golan Telecom's data consumption.
This agreement also seems to differ from other roaming agreements, since Golan does not pay per minute or message at a predetermined rate and then resell it to its own clients at a higher price. Instead, Golan purchases capacity of the Hot Mobile network, to use according to its own considerations.
The companies also state that the NIS 600 million loan Hot Mobile will provide Golan Telecom will be used only to pay a debt of the same sum to Cellcom, if and when Golan Telecom will be required to pay it.
In their cartel exemption request, the companies state that the new agreement would clearly increase competition, since its commercial conditions are preferable, from Golan Telecom's perspective, to the conditions in the agreement with Cellcom, which will improve Golan Telecom's competitiveness. It is explained that even a 20% increase in the number of Golan Telecom subscribers will not lead to further charges.
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2016
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