In the past three months, the rate at which IBC ("Unlimited") has been rolling out its fiber optic network has slowed, although the company promises that it will meet its annual target. The slowdown is attributed to the transfer of the contracting work on the project from Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) to Hot Telecommunication Systems Ltd. (TASE: HOT), under the agreement whereby Hot became a partner in the venture. The rate of deployment has slowed from about 35,000 hook-ups every three months to just 15,000.
IBC's annual rate of deployment is 200,000 households provided with access to its fiber optic network. Considering the upcoming Jewish holiday period and the coronavirus pandemic, the rollout might be expected to be delayed, but IBC rejects this completely and claims that under its plans the goal is to keep to the 200,000 rate and even better it.
In the agreement between the shareholders for the accession of Hot as a partner in the venture, Hot took upon itself the contracting work instead of Cellcom. Cellcom had been the main contractor, and had worked through sub-contractors. Hot brought in the company that provides it with network services as the main contractor, alongside Israel Electric Corporation, which continues with deployment although on a smaller scale than in the past. The background is Hot's strategy of promoting fiber optic deployment via Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) infrastructure, under the wholesale market policy whereby Bezeq's competitors can pay to use its infrastructure.
IBC is currently weighing up deployment of its fiber-optic network in haredi and Arab areas, in accordance with the policy of the Ministry of Communications to promote deployment in areas in which Bezeq planning it.
IBC undertook to connect 1.7 million households as a condition for Hot becoming a partner in it.
Published by Globes, Israel business news - en.globes.co.il - on August 24, 2021
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