The Antitrust Authority is in no hurry to disclose its position on 4G network sharing, but there is growing evidence that it will not approve the network sharing agreement reached by Pelephone Communications Ltd., Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), and Golan Telecom Ltd..
For the Antitrust Authority, network sharing by the three carriers is a red rag, because, together with the 4G network sharing agreement by Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Hot Mobile Ltd., it will result in just two networks, necessarily reducing competition on the basis of independent infrastructures.
However, the Antitrust Authority may agree to allow passive network sharing, limited to antennas, by the carriers, for a limited period and with restrictions.
The Antitrust Authority has an easier case with regard to Partner and Hot Mobile's network sharing agreement, in terms of restraint of trade, and will likely approve it with restrictions, such as limiting the time, and banning active sharing to prevent harm to competition in data transmission, full separation, allowing access by rivals, and so on.
The Partner-Hot Mobile tie-up is seen as less dangerous in terms of dominating the mobile market. Hot Mobile is a new and minor player and network sharing with Partner will control only 40% of the infrastructures market. But a Pelephone-Cellcom-Golan Telecom tie-up would control 60% of this market, posting a greater threat to competition in the eyes of the Antitrust Authority, which does not yet believe that it is possible to achieve separation between the networks on the basis of competition between independent networks.
Published by Globes [online], Israel business news - www.globes-online.com - on March 18, 2014
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