Ministry approves Hot stake in fiber-optic venture IBC

Minster of Communications Benny Gantz has approved invetsment by HOT Telecommunication Systems Ltd. (TASE: HOT) in fiber-optic venture IBC, which trades as Unlimited. From a regulatory point of view, the way to the deal is now open, and it will be completed with the payment of NIS 170 million by Hot in exchange for 23% of the shares in IBC. Ownership of the venture will then be divided between Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Hot, and Israel Infrastructure Fund, with 23% each, and Israel Electric Corporation, which will continue to hold the remaining shares.

The deal creates a new force in fiber-optics in Israel that will compete with Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ). Two of Israel’s largest telecommunications providers, Cellcom and Hot, are now partners in the project the sole aim of which is the deployment of a fiber-optic cable network that will be open to the use of all carriers on equal terms. That is to say, the fact that Cellcom and Hot are among the owners of the network will not allow them to buy services from it at a price different from the market price. From this point of view, the venture has become an attractive palyer in the wholesale market, and will be a competitor to Bezeq in both the wholesale and retail markets through the telecommunications companies.

The Ministry of Communications permit is subject to the following conditions:

1. IBC will lower barriers to entry and to the use of its network. It will retain its character as a wholesale company and will be obliged to give discounts in order to enable small players to use its network.

2. The company is required to deploy an ultra high-speed Internet network to 1.7 million households in Israel by five years from the date of approval of the deal/transfer of control. Rollout of the network will be in the ration of 1:1 between the number of households in center of the country and in the periphery.

3. Hot will be obliged to offer all Internet service providers the opportunity to any joint basket of services approved for it in the past, to be offered on the basis of IBC’s access infrastructure on equal terms and with no discrimination in favor of a service provider affiliated to Hot (Hot-Net).

Ministry of Communications director general Liran Avisar Ben Horin said, “We believe that approval of the deal will lead to substantial acceleration in the deployment of fiber optic cable throughout the country, and particularly in the periphery.”

Published by Globes, Israel business news – en.globes.co.il – on February 8, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Source Link: https://en.globes.co.il/en/article-Ministry-approves-Hot-partnership-in-fiber-optic-venture-IBC-1001359906

Recommended For You