The Ministry of Communications' tenders committee will tomorrow disqualify Select Communications' win in the mobile carrier tender, because the NIS 700 million bank guarantee it provided is not from an Israeli bank as stipulated in the tender terms. The disqualification means that the fourth-placed bidder, Golan Telecom Ltd., backed by Oren Most and Michael Golan, will become the winner. It bid NIS 360 million in the tender and that is the amount of the guarantee it will have to provide.
Mirs Communications Ltd., controlled by Patrick Drahi, will reportedly try to prevent Golan Telecom being named the winner, but it will have to act very carefully to prevent being perceived as a spoiler. A previous effort by Mirs to get Golan Telecom disqualified, on the grounds that it was in the possession of confidential information, was dismissed by the courts.
Mirs will presumably also seek a number of easements from Minister of Communications Moshe Kahlon, and is trying to rebuild its relations with him. Any attempt to torpedo potential rival Golan Telecom would be unwise, as losing a court challenge could cause Mirs even greater damage.
Golan Telecom has taken a wait-and-see approach to tomorrow's decision by the tenders committee. Sources inform ''Globes'' that the company told the tenders committee today that, following the reports of Select's failure to obtain a guarantee from an Israeli bank, Golan Telecom was ready to provide a valid guarantee, demonstrating its seriousness.
Rumors are rife that Mirs will demand that the tenders committee require Golan Telecom to provide a bank guarantee of NIS 700 million from an Israeli bank - the amount that both Hezi Bezalel's 018 Xfone Communications Ltd. and Michael Gelfand and Louis Mayerberg's Select Communications were not able to secure - rather than asking the committee to lower its own guarantee to NIS 360 million - the amount that Golan Telecom has to provide.
In either case, Mirs' intent is clear: to set up a claim that the Ministry of Communications should give the two new mobile carriers an equal starting point to set up their networks. If Golan Telecom is named the winner under the current circumstances, it would begin with only half the debt burden of Mirs.
Published by Globes [online], Israel business news - www.globes-online.com - on July 18, 2011
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