The situation facing the fiber-optics venture Unlimited, jointly owned by Israel Electric Corporation (IEC) (TASE: ELEC.B22) and private investors, is not encouraging: more than 50% of customers abandoned the services after the free introductory month, and returned to Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) or HOT Telecommunication Systems Ltd. (TASE: HOT), sources inform "Globes."
Unlimited shareholders have expressed dissatisfaction, and are considering changing the business model. One of the problems with Unlimited that they identified is that the company does not offer its customers routers, therefore computers in customers' homes are connected directly to the fiber-optic cable. This means that customers do not receive wireless routers that make WiFi possible in their homes. The company's insistence upon forcing its customers to buy their own WiFi routers, combined with the fact that the price for 100 Mbps (NIS 100, not including ISP) does not include telephony or any other added value, has created a sense of disappointment among quite a few customers.
Dissatisfaction at the company and among its shareholders has increased due to the slow pace of deployment and connection by IEC. The company is not attacking the market, and is leaving marketing activities to the Internet service providers, but because no leading ISPs are participating in the venture, marketing efforts have been rather pathetic.
Thus far, only a few hundred have joined. According to sources involved in the matter, it is progressing at a slower pace than was expected, and the pace depends on IEC and the costs entailed therein. IEC owns 40% of the venture, and is also the primary contractor for the project, therefore, only IEC may carry out the work, and at a relatively high cost. Former Cellcom VP Technology Eliezer (Lipa) Ogman was brought on to try and deal with the deployment problem.
Unlimited said in response: "Unlimited continues to operate and to connect new customers daily. The number of customers who leave after the first month is incorrect. Regarding the routers, Unlimited is attuned to the needs of its customers and will always take steps to make the most advanced Internet surfing experience in the world possible. Some of the routers on the market do not support the speeds that Unlimited provides. The company is committed to service, and to an unrivaled surfing experience. One should not draw conclusions based on this that the company will begin selling one product or another, but one can conclude that the company will do everything in order to continue to penetrate the Bezeq-Hot duopoly and to improve the situation for consumers in Israel. The company is working hard to increase coverage, so that more Israelis will be part of it."
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2014
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