Amidst threats by employees of the veteran cellular companies concerning the results of the Ministry of Communications' policy, which they say is liable to lead to lay-offs, the tender for 4G cellular frequencies is scheduled to take place tomorrow.
The procurement administration at the Ministry of Finance Accountant General department is conducting the tender online. It will be opened at 10 AM, and is likely to be completed the same day, although an additional day may be necessary if the parties continue raising their bids.
Today, at the last minute, Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) asked the Ministry of Communications to reconsider its tender terms. The veteran operators contend that the tender is highly discriminatory in favor of Golan Telecom Ltd. and HOT Mobile Ltd. because it makes concessions to them that will enable them to continue their cutthroat bargains aimed at crushing their competitors in the cellular market.
In its petition, Partner asserts that the new cellular companies should not be afforded protection as an "infant industry," because they are backed by "international tycoons in no need of help from the Israeli regulator."
Better surfing experience on cellular Internet
The tender is designed to provide operators in Israel with frequencies that are essential for their continued functioning, because Israel is lagging far behind the rest of the world in anything pertaining to 4G. Allocating the frequencies will make possible a better surfing experience on cellular Internet, and help the operators cope with their customers' growing need for available high-speed communications.
Six bidders will compete in the tender: three veteran companies (Partner, Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), and Pelephone Communications Ltd.), Golan Telecom, HOT Mobile, and a new player seeking to enter the market - Hezi Bezalel, through 018 Xphone.
Eight five-megahertz bandwidths and one three-megahertz bandwidth in the vicinity of 1,800 megahertz will be allocated in the tender. The operators are being required to show NIS 100 million in equity, and to put up a NIS 10 million guarantee. The winners must put up half of their price bid within 45 days, and provide guarantees for the remainder.
Golan Telecom, HOT Mobile, and Xphone enjoy an advantage: for each percentage of market penetration, up to NIS 50 million will be deducted from their bid.
The starting bid in the tender will be NIS 10 million for each megahertz. A round will be conducted every 10 minutes, during which the operators can revise their bids.
Cellcom can buy two frequency bandwidths of three megahertz, because it already has frequencies suitable for 4G. Partner can also buy two bandwidths for the same reason, while Pelephone can buy up to four bandwidths, because it has no 4G frequencies at all, and the same is true of the new players.
The limit for an independent network is 20 megahertz.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2015
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