The IEC will seek a partner for the fiber optic telecom infrastructure.
The cabinet today approved Minister of Communications Moshe Kahlon's proposal for Israel Electric Corporation's (IEC) (TASE: ELEC.B22) fiber optic telecommunications infrastructure venture. Following the cabinet approval, the Ministry of Communications hopes to publish a tender for IEC's partner in the venture, once the provisional license and regulations are completed.
Financial investors with a holding of more than 5% in a telecommunications company cannot invest in the IEC venture. The government set the limit because the amount of investment needed in the IEC venture meant that financial investors with holdings in telecommunications companies would want to participate in it, but that this risked cross ownership.
The cabinet also gave IEC's venture a 20-year exclusivity to use its parent company's fiber optic network to make it more attractive to investors. The exclusivity can be lifted in extreme circumstances, such as if the venture's revenue exceeds 40% of total revenue in the telecommunications infrastructure market, which is highly unlikely. The exclusivity can also be lifted if the venture refuses to sell services to any party for any reason.
Published by Globes [online], Israel business news - www.globes-online.com - on March 6, 2011
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