Golden pair team up to take on larger rivals

3 Jul 2006

Israeli communications group Internet Gold has agreed to acquire a 60% stake in telephony and internet access provider 012 Golden Lines, as part of plans to become a multiple service operator. The deal, which values 012 Golden Lines at around USD140 million, will pave the way for the merger of two of Israel’s five largest internet service providers, and further consolidation is a very real possibility if the newly enlarged telco wants to compete as a full service provider. Internet Gold says a detailed agreement will be signed by the companies in ‘the coming days’ and is still subject to the approval of the boards of both operators and the relevant regulatory authorities. Under the deal, following the acquisition, 012 Golden Lines will be merged into Internet Gold’s wholly owned subsidiary Smile.Communications. The enlarged Smile will compete with three other major ISPs – Bezeq subsidiary Bezeq International, Barak and NetVision. The latter two are part of local conglomerate IDB Holding Corporation, which majority owns mobile operator Cellcom; Bezeq is also present in the wireless sector via subsidiary Pelephone. It is already being rumoured that Internet Gold may now look to acquire or seal a partnership deal with Israel’s third major mobile provider, Partner Communications, majority owned by Hutchison Telecommunications International.

Israel, 012 Smile Telecom