Shareholders in the Unlimited fiber-optic venture (formerly IBC) are waiting for an additional NIS 75 million from the Ministry of Finance. The state undertook to inject NIS 150 million into the venture as a two-installment grant for the purpose of aiding in the initial deployment stage. The state already injected NIS 75 million in the set-up stage, and the second stage, which the state is due to hand over the second amount, together with a similar amount from the shareholders, is now at hand.
The shareholders in the venture are Israel Electric Corporation (IEC) (TASE: ELEC.B22) (40%) and Via Europe (30%), with BATM Advanced Communications Ltd. (LSE: BVC; TASE: BATM), Rapac Communication and Infrastructure Ltd. (TASE: RPAC), the Zisapel brothers, and Tamares Telecom holding the remaining 30%.
The Ministry of Finance plans to check how the venture is progressing, and whether the pace of work is satisfactory, before handing over its share. It should be kept in mind, however, that the state undertook to provide the money in advance, and the chances that it will be withheld are therefore very small.
The venture has made great efforts in recent months to achieve progress in fiber-optical deployment in the central region, Tel Aviv, Ra'anana, Ramat Hasharon, etc. Infrastructure work is involved, mainly preparing the ground for deployment in buildings. The work in the central region will expand access to the project, with lines constituting an alternative to the infrastructure of Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Hot Telecommunication Systems Ltd. (TASE: HOT.B1).
The Internet providers currently marketing the venture assert that the pace of hooking up customers is entirely negligible, and that customers are actually being hooked up to a trial, in which the company grants them one month of free hookup, after which most of them go back to using services from Bezeq or Hot Telecommunication. Some customers retain their service from these two companies even while they are receiving their month of free service from the fiber-optic venture.
As far as is known, all the shareholders are putting more money into the venture, including Tamares, which has a dispute with Unlimited concerning procurement that the latter should have made from it.
In the accounting records, the money from the shareholders comes from funds already deposited as guarantees, so that ostensibly, they could not prevent Unlimited from getting the money except through court proceedings. Since none of the shareholders, including Tamares, has petitioned the court, the money went through, and the shareholders are now waiting for the corresponding funds from the state.
Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2015
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