Bezeq hits 350,000 “reverse bundle” subscribers

Bezeq
Bezeq

Since 2015, all the Israeli telecom’s competitors only managed to lure 320,000 customers.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) reached the 350,000-subscriber mark with its “reverse bundle” services in which the telecom sells both the infrastructure and the service according to figures the company provided the Ministry of Communications during an evaluation the office conducted.

The number is exceptionally high considering that the other providers only attracted 320,000 clients since the telecom reform in 2015. Furthermore, a third are Bezeq International subscribers, while the majority of the remaining customers were reached through its virtual service providers, including 099 and 011.

The impressive subscriber-base suggests the reform failed to halt the company’s hold on the market. Because Bezeq does not market other providers like Netvision or 012 the company uses all its marketing might to attach consumers to its providers 011 and 099 thereby increasing the pressure on its competitors, which struggle to compete with its offerings.

Both 099 and 011 are virtual creations of the internet providers that benefit Bezeq. The company noticed a loophole in the regulation which it exploited legally in order to better compete in the new market.

Bezeq generally makes use of its “reverse bundling” once clients leave for another provider. Since the customer is not required to inform Bezeq of their departure as they are disconnected by the ISP the company initiates a retention call as soon as the exit is reported in which it offers the client an improved rate.

In most cases, Bezeq succeeds in its effort to retain the client, who often is not familiar enough with their ISP options and prefers the convenience of staying with the company.

Bezeq claims the ISPs take advantage of the fact the client is not required to phone them and tells the prospective customers that they continue to be serviced by Bezeq. But when Bezeq calls to collect its equipment or to make a retention effort, the clients realize they are no longer serviced by the telecom and many choose to return to the fold.

When Bezeq was granted permission to market its “reverse bundle” service, it was believed the telecom would advertise all ISPs equally. However, following the landline reform and the systemic change to offering infrastructure and service in one package, Bezeq decided not to sell the services of competing ISPs Netvision and 012 (now Partner) because while it was busy lining up customers for them, they would try to poach the clients entirely.

Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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