Pelephone buys YouPhone from troubled Mega

Pelephone

Pelephone and YouPhone will share revenue over the next three years.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) mobile phone unit Pelephone Communications Ltd. has acquired mobile virtual cellular operator (MVNO) YouPhone from Mega Group. As reported by "Globes," due to the Mega Group's difficulties and YouPhone's continued losses, it was decided to sell the cellular business.

The deal was completed today and signed by Pelephone CEO Gil Sharon and Alon Group CEO Avigdor Kaplan. The deal is subject to approval by the Ministry of Communications and Israel Antitrust Authority.

The two companies will divide revenue over the next three years. YouPhone already uses Pelephone's network. YouPhone subscribers will move over to Pelephone without being required to change SIM cards, while all agreed packages will continue.

YouPhone has an estimated 80,000 cellular subscribers, some of whom are members of the You buyers club, and therefore receive discounts in buying gasoline at Alon Israel Oil Company Ltd. filling stations and discounts in shopping at the Mega chain. YouPhone's business model was based precisely on this attempt to link cellular services with other products.

YouPhone began operating following the cellular reform in 2012, shortly before Golan Telecom and HOT Mobile Ltd. The latter two companies sent the market into a tailspin, and YouPhone had to deal with the ensuing market tempest, which in effect has continued until the present time.

Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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