New subscribers flood to Golan Telecom

Golan's NIS 35 monthly offer brought 1,500 net new subscribers on Sunday alone.

Golan Telecom Ltd. had a very good recruiting day on Sunnday, and the veteran mobile carriers had a very bad one. Golan Telecom's new NIS 35 monthly offer reportedly resulted in a net 1,500 new subscribers - an extraordinary number that shocked the mobile market and is reminiscent of the second half of 2012.

Last week, Golan Telecom announced a limited offer for Passover of a mobile package with unlimited calls and SMS and 1 gigabyte Internet access at NIS 35 per month. The plan is valid through the end of the year.

The market considers the offer as irrational, and that its sole purpose is to harm the veteran carriers. Top industry sources say that the plan has one purpose: if Golan Telecom is not acquired by another carrier, it will continue cutting their profits.

Golan Telecom owner Michael Golan says that the carrier will continue recruiting subscribers and that a merger is not on the agenda. The market does not believe him.

An executive told "Globes", "Golan Telecom is shooting itself in the foot with the clear objective of creating a situation in which it will be acquired. This is based on the mistaken assumption that as it bleeds the veteran carriers by recruiting more and more subscribers from them, it will have to be acquired."

As for the price that Golan Telecom is paying for the heavy subsidizing of its offers, the executive said, "We're not talking about a loss, because Golan Telecom believes that it will make back the loss after it is sold. The problem is that it is unclear if there is anyone to buy it, especially at the number it mentions - over NIS 1 billion. Also, there is no chance that the regulator will approve its sale, reverting the market to what it was before the competition, so it is taking an insane risk."

Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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