The entry of HOT Telecommunication Systems Ltd. (TASE: HOT) into the Internet segment at a price of NIS 20 per month for all access speeds through subsidiary HOT.net has left the other Internet service providers (ISPs) without a response. Price comparison site Kamaze examined for "Globes" how the competitors are responding. The conclusion: prices have not come down, except for a special offer by Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ).
Internet: HOT.net has the lowest rate at all access speeds, and it is doubtful whether other ISPs can match it.
The advantage of HOT.net's uniform price of NIS 20 per month for all Internet access speeds improves as access speeds increase. For example, at 100 Mbps, this price puts HOT.net far ahead of 012 Smile Telecom Ltd., which charges NIS 120, 013 NetVision Ltd., which charges NIS 130, and Bezeq International Ltd., which charges NIS 200. Only tiny ISP 018 Xfone Communications Ltd. offers an attractive price: NIS 35.
There are also differences at lower Internet speeds: Triple C Ltd. and Xfone offer 5 Mbps at NIS 25 per month, Smile offers this speed at NIS 28, and NetVision and Bezeq International offer it at NIS 40.
Triple play: Since Bezeq and its satellite TV subsidiary DBS Satellite Services (1998) Ltd. (YES) cannot offer a triple play package (TV, telephony, and Internet access), or a TV-telephone package, HOT has the edge, offering a Triple play package at NIS 330 per month, which includes all cable TV stations, telephony, and 100 Mbps Internet access.
Buying the components separately from Bezeq and YES costs at least NIS 450 per month: the starting price for YES is NIS 200 for the basic package, and climbs to NIS 279 for all channels together with YES Max Total VOD service. Bezeq's Internet access costs NIS 45 per month (for new customers receiving 2.5 Mbps), and the minimum price for telephony service is NIS 58 per month for the line, and does not include calls.
It should be noted that, so far, Minister of Communications Moshe Kahlon has rejected ISPs' requests to block HOT's new package because of what they contend is the damage they are liable to face from HOT.net's cooperation with HOT, which they claim was launched without the Ministry of Communications' permission.
Exit fines cancelled
Subscribers' commitment to ISPs is a thing of the past, so it is important to utilize competition to switch between ISPs on the basis of their offerings. Consumers have not yet grasped that the commitment is gone, as demonstrated by the continuing low churn rates at ISPs.
Liat Nahum of Kamaze says that the ease at which it is possible to leave an ISP gives subscribers the advantage. "Customers who call their ISP to terminate service in order to switch to HOT.net receive offers for Internet prices that are lower than they currently pay."
18-month price commitment
The price for customers is guaranteed for 18 months. Customers must terminate their agreement from their previous ISP on their own.
HOT.net - no human sales call center
As a separate company from HOT (just as Bezeq International is a separate company from Bezeq), Hot.net is required to provide service to households with Bezeq infrastructure. Astonishingly, however, HOT.net does not have a call center, so customers end up at HOT's call center to obtain information about the service, where people with Bezeq infrastructure face efforts by sales reps to switch their infrastructure provider. It is a good idea to prepare in advance for the long waiting time.
Only by e-mail
It is only possible to contact HOT.net sales reps by e-mail or via HOT's website. The call center is only available for customers.
Only by credit card
It is only possible to join HOT.net's service via credit card.
Verifying Internet access speeds
Payment for Internet is in two parts: the ISP and the infrastructure provider. Payment for infrastructure (to HOT or Bezeq) is higher than the payment for the access speed, so that sales offers for upgrades at no extra cost, such as the one offered by Smile, are not as free as they are portrayed, because it is usually also necessary to upgrade the infrastructure to handle the higher speed.
E-mail address mobility
One of the barriers facing Internet consumers who quit their current ISP is their e-mail address. The Ministry of Communications broke down this barrier with regulations that came into effect at the end of 2010, which allow for transferring e-mail addresses to the new ISP.
For infrastructure: Bezeq is cheaper
Infrastructure prices are different for new and current customers - here too it pays to bargain. It should be remembered that most HOT Internet customers are subscribers through service packages that include cable TV, or cable and telephony. Only a few customers only buy HOT's Internet infrastructure as an isolated service.
Since Bezeq and YES still cannot offer triple play or TV-telephony packages, the combined package gives HOT an edge. For the cost of infrastructure alone, Bezeq is cheaper than HOT at all speeds (except for 5 Mbps, where the prices are the same at NIS 69 per month).
The difference widens at higher speeds: At 100 Mbps, HOT's infrastructure costs NIS 179 per month, compared with NIS 115 for Bezeq. This is also the easiest way to tempt as many customers as possible to opt for the triple play package, which includes 100 Mbps Internet access at a cost of NIS 330 per month.
Published by Globes [online], Israel business news - www.globes-online.com - on February 27, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012