After calling the price hikes by Hot Telecommunication Systems Ltd. (TASE: HOT.B1) and DBS Satellite Services (1998) Ltd. (YES) greed for its own sake, and attacking the companies for instituting price hikes that appear to be coordinated, Council for Cable TV and Satellite Broadcasting chair Dr. Yifat Ben Hai Segev today announced that the price increase had been suspended. She also said that she would ask the Antitrust Authority director general to examine the timing of the price rises.
Hot and Yes recently announced virtually simultaneous price rises. Yes was the first, announcing that its VOD prices would be increased by NIS 5, followed by Hot Telecommunication, which announced a rise in prices by an average of 5%. Since the two companies require approval from the Council for Cable TV and Satellite Broadcasting, Segev made it clear that she intends to exercise her authority, as set forth in the companies' licenses, by ordering them to suspend their announced price increases.
Yes announced that it would raise the price for its VOD services to NIS 29.90 a month, thereby making its VOD service price equal to that of Hot Telecommunication. Hot Telecommunication notified the Council for Cable TV and Satellite Broadcasting that it was raising its prices for the basic package it offers its customers by 1-14%, and the price of one-time services, such as messenger service, which it plans to raise from NIS 29.60 to NIS 39.90, a 35% increase.
According to the Council for Cable TV and Satellite Broadcasting, under the two companies' broadcasting licenses, the Council for Cable TV and Satellite Broadcasting chair is authorized to order the companies to refrain from changing their prices if she believes that the changes could harm competition and cause discrimination between subscribers, and to bring the subject to the Council for Cable TV and Satellite Broadcasting for discussion.
Segev added, "Furthermore, I believe that the price increases are unjustified, taking into account the two companies' profit indices, and that television is not classed as a luxury product, but as a basic product that must be equal for everyone in Israel."
Yes said in response, "These accusations are irresponsible. The Council for Cable TV and Satellite Broadcasting itself approved the VOD price adjustment already in 2014, and we invite the Antitrust Authority director general to check and see that we have acted legally, and have given fair and transparent notice to our customers. It is possible that our competitors acted otherwise."
Hot Telecommunications said in response, "Hot Telecommunication has acted, and is acting, in compliance with the provisions of the law in this matter also."
Published by Globes [online], Israel business news - www.globes-online.com - on November 22, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015