HOT Telecommunication Systems Ltd. (TASE: HOT) and DBS Satellite Services (1998) Ltd. (YES) are set to face a new competitor. After reforming the cellular market, Minister of Communications Moshe Kahlon has turned his attention to the cable and satellite TV market and has decided to reform this sector too. He hopes to reduce prices to subscribers by privatizing Idan Plus, which currently provides digital terrestrial television (DTT) set-top boxes. Sources believe that this reform will be implemented in the next few months.
Ministry of Communications employees are preparing, following Kahlon's instructions, a Knesset bill permitting a third company to compete with HOT and YES. Kahlon wants the new company to be based on the infrastructure of Idan Plus (DTT), which is currently operated and owned the Second Broadcast Authority.
According to Kahlon's plan the tender will be offered to private companies that will make a commitment to provide a package of channels based on the DTT Law that was enacted several months ago. The third operator will be entitled to add more channels to compete with HOT and YES and this will be the source of its profit. Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) welcomed the news and said that it would bid for such a tender.
Sources at the Ministry of Communications says that the reform involves a simple amendment to the law. Kahlon believes that this is the right move and that it will lead to lower prices and greater competition in the short term.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2012
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