Bezeq and Partner agree on wholesale market

Partner will likely receive end-to-end control of customer service.

There has been a significant development in the telecommunications market following what appears to be an agreement in principle between Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) on the structure of the new wholesale market. Sources inform ''Globes'' that the companies achieved a breakthrough last week in their negotiations on the service structure, which will probably use the bit-stream access model.

Under this model, Partner will likely receive end-to-end control of customer service by connecting several collection points, from which the connection will be made directly to the customer and the communications cabinet. In effect, Partner severs the customer from Bezeq and it will be able to offer customers direct service.

An additional significance, which explains the different approaches by Partner and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), is that Partner takes responsibility for the customer's home, whereas Cellcom is demanding that Bezeq take this responsibility.

It should be stressed that this is only an engineering arrangement, after which the companies will hold complex commercial negotiations. Nonetheless, this is an important development, if only because of the consequences of the agreement for the arrangements in the telecommunications market in general.

The sources added that, in the commercial negotiations, Bezeq and Partner will also examine international benchmarks. Partner, Cellcom, and Bezeq have already made comparisons of how much foreign mobile carriers pay infrastructure companies, and they will try to agree on prices on this basis.

Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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