Sources inform ''Globes'' that Ministry of Communications officials advise Minister of Communications Gilad Erdan to approve 4G for Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) with restrictions. Erdan will now have to decide. Partner wants to operate 4G on the 1.8-5 megahertz frequencies it owns, which it made available for this purpose.
Ministry of Communications director general Avi Berger recommends allowing Partner's 4G launch, but with massive restrictions on services on the understanding that it is neither possible nor reasonable to block the carriers' technological progress, especially for a resource that the government has not allocated (Partner is using frequencies that it already owns). The restrictions cover speed, deployment, and prices.
Partner's 4G request has become one of the hottest issues in the mobile market because the Ministry of Communications is delaying a decision on network sharing for no clear reason . Partner has signed a 4G network sharing agreement with Hot Mobile Ltd., while Pelephone Communications Ltd., Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), and Golan Telecom Ltd. signed a second 4G network sharing agreement.
Since no one knows what Erdan wants, the mobile market is in a state of high anxiety. Partner therefore decided not to wait and to launch its 4G network on the frequencies in its possession.
4G needs at least 10 Mbps to handle data for creating differentiation, triple the current rate, which is why Partner's launch is more important at the marketing and image levels. The carrier is investing heavily to create a public perception that it is Israel's fastest network, and 4G strengthens this image. The carrier also remembers its successful 3G launch ten years ago: it was the first 3G carrier in Israel and one of the first in the world, and it hopes that 4G will create a similar growth engine.
Pelephone, and to a lesser extent, Cellcom, will object to Partner's 4G launch and have probably already made their concerns known to the Ministry of Communications.
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2014
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