The Palestinian Authority (PA) has asked Israel to allocate frequencies for another wireless operator in the territories. Sources inform “Globes” that PA Minister for Civilian Affairs Mohammad Dahlan submitted the request to Minister of Communications Dalia Itzik last night. Itzik told Dahlan that she would raise the subject with the prime minister.
The PA wants to publish a tender for Palestinian and international entrepreneurs. Dahlan did not mention allowing Israelis to participate in setting up the new network. One wireless operator exists in the PA today, Palestine Cellular Communications, which operates under the brand Jawwal (the wanderer). Jawwal has an estimated 400,000 subscribers. PalTel Palestine Telecommunications Co. - Itisalat (PSE:PALTEL) owns 65% of Jawwal, and the rest is owned by the Palestinian investment fund.
The vast majority of Jawwal's subscribers use the pre-paid track. Jawwal uses Ericsson (Nasdaq:ERICY; SAX:ERIC) GSM technology, which mainly provides voice services, and very few SMS and data services.
Jawwal used to have good relations with Partner Communications (Nasdaq: PTNR; TASE: PTNR; LSE: PCCD), and Jawwal subscribers could roam to Partner's network. In late 2001, Jawwal and PalTel sued Cellcom and Pele-Phone Communications Ltd. for $433 million in a Palestinian court in Ramallah for what they called "illegal activities in the Palestinian Authority territories".
PalTel and Jawwal claimed that Israeli wireless operators were violating PalTel and Jawwal's exclusivity in the PA territories, contravening the Oslo Accords. Among other things, PalTel and Jawwal claimed that Israel's wireless operators operated in PA territories without a license, and operated antennas from inside settlements and outposts. "Were it not for the intifada and the illegal activities of these companies, Jawwal could have been twice as big," they said at the time. Nothing ever came of the lawsuit.
Ministry of Communications director general Avi Balashnikov and PalTel's CEO will soon meet to discuss common issues between the ministry and the company. The Palestinians want to create competition against the two local communications operators, and reduce dependence on the Israeli operators.
Israel has a problem with frequencies, and allocating more frequencies to the PA is no simple matter. Security considerations will also be important in any decision on whether to agree to the Palestinians' request.
Published by Globes [online], Israel business news - www.globes.co.il - on April 5, 2005