Cellcom, Pelephone, Golan to share 4G network

The three mobile carriers will cooperate in obtaining frequencies.

Mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Pelephone Communications Ltd., and Golan Telecom Ltd. today signed an agreement to build and operate a shared LTE 4G radio network. Cellcom and Pelephone also signed an agreement for the sharing of passive elements of cell sites for existing networks and an Indefeasible Right of Use (IRU) agreement with Golan Telecom for Cellcom's 2G and 3G networks.

The three carriers will cooperate in obtaining frequencies for the 4G network. The 4G radio network will be built and operated by a separate, newly created entity that will be equally owned by Cellcom and Pelephone. It will be overseen by a steering committee comprising representatives of all three carriers that will make the strategic decisions regarding the 4G network by majority vote. Each carrier will be required to purchase and operate its own core network. Costs will generally be divided equally among the three carriers.

The agreement is for a period of at least 15 years. Golan Telecom will have the right to discontinue the IRU if it is acquired by another Israeli mobile carrier with a general license.

Pelephone CEO Gil Sharon said, "This is a groundbreaking agreement for the mobile industry and Israel. The 4G network that we will build together will be one of the most advanced in the world, and will give Israel for the first time the good news of 4G cellular with access speeds of up to 100 Mbps, similar to the speeds in developed countries."

Minister of Communications Gilad Erdan said, "I congratulate Golan Telecom, Cellcom, and Pelephone for the network sharing agreement that they have signed. The agreement's direction is in line with the trends and principles of cooperation prevailing in the EU and around the world, and will make it possible to keep several mobile carriers, which will compete over consumer prices and the range of services they offer consumers, while also helping to reduce the number of antennas built across the country and preventing the construction of unnecessary new antennas in public space. Network sharing by the carriers will greatly reduce 4G network set-up costs and avoid unnecessary expenses that would raise prices of services for consumers. I welcome the move, and I believe that it will facilitate the deployment of an advanced network in Israel while maintaining the sophisticated competition in the industry and low prices."

Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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