Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has been overcharging tens of millions of shekels for calls to landline phones in the West Bank and Gaza. This is scandalous, since tariffs have been determined in an arbitrary manner by Bezeq itself.
These prices are not supervised, although all of Bezeq's call prices are supervised by the Ministry of Communications, since it is a monopoly in the field of landline telecommunications; in this case, its overcharged prices have not been approved by the ministry.
The tariff for phone calls from a Bezeq landline phone to lines of the Palestinian Authority communications company Paltel are supposed to be priced like regular calls between landline phones. This is not an international call, and it does not pass through an international supplier or any other elements, but uses a regular Bezeq prefix.
Moreover, there are also no connectivity fees, as is the case in the mobile phone market, and the parties (Bezeq and Paltel) have a bill & keep agreement - that is, there are no connectivity charges between the companies for completing a call.
Bezeq's official call tariffs are NIS 0.1138 per minute during peak hours (from one landline phone to another) and NIS 0.0464 during the rest of the day. In contrast, a client calling a Paltel landline phone number, pays, according to Bezeq's billing, NIS 0.2315 per minute during peak hours and NIS 0.163 during the rest of the time. The Israeli client thus pays twice as much during peak hours and four times as much during the rest of the time.
Bezeq's phone tariffs are regulated and the price for calls to Paltel are supposed to be supervised. Nevertheless, Bezeq, in some mysterious manner, has made this an exception and no one in the Ministry of Communications has ever examined this issue. As far as is known, there have been no complaints that reached the media, which enables Bezeq to continue overcharging its clients and making profit of tens of millions of shekels.
At present most Bezeq clients have package-based subscriptions, and only a small percent of clients pay the original call tariffs. Nevertheless, the move to packages took place only in the past few years, and in any case this has been taking place for dozens of years, allowing Bezeq to make a significant profit, which some estimate even exceeds tens of millions of shekels, over the years in which it has been connected to Paltel.
Bezeq responded, "This is an entirely tendentious and biased article which is based on incorrect facts. We find it puzzling that "Globes" prefers to present such a biased, one-sided picture, while adapting the reality to the headline, rather than the other way around, as part of a highly problematic trend characterizing the newspaper recently, when it relates to Bezeq.
"As to the case in question: Bezeq operates according to the law, and its tariffs for calls to the Palestinian company are known to everyone, including regulators. This tariff reflects the fact that this is not a domestic Israeli operator, with all of the resulting complexity. Unlike Israeli operators, the Palestinian communications company does not pay Bezeq connectivity fees for the completion of incoming calls, and routing the call is different, making it impossible to compare these two cases. In any case, this is marginal and very low revenue. All other Israeli communications operators, including mobile phone companies, charge similar prices, while some of their prices are much higher."
Following Bezeq's response, "Globes" clarifies that it had requested Bezeq to provide details on the approval of the tariff and on whether the irregular tariff was approved, when and by whom, but the company declined to reply.
In addition, none of the claims made related to mobile phone calls, but only to the overpricing of calls from landline phones to Paltel landline phones.
Published by Globes [online], Israel business news - www.globes-online.com - on November 9, 2016
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