Golden handshakes and a large Smile: cable and internet mergers completed

3 Jan 2007

Israeli communications group Internet Gold has announced that it has completed the acquisition of telephony and internet access provider 012 Golden Lines, upping its interest in the company from 60% to 100%. Golden Lines will be merged into Internet Gold’s wholly owned subsidiary Smile Communications. The enlarged Smile will compete with three other major ISPs – incumbent telco Bezeq’s subsidiary Bezeq International, Barak and NetVision. According to TeleGeography’s GlobalComms database, Internet Gold agreed to acquire a 60% stake in Golden Lines in July 2006 from Fishman Holdings for USD84 million, as part of plans to become a multiple service operator. The merged company will have a predicted 33% share of the internet and international communications markets in 2007. It expects to roll out WiMAX in 2007 and IPTV by mid-2008.

Meanwhile, Israeli cable TV provider Matav–Cable Systems Media has announced that it has completed its long-delayed merger with its two biggest cable rivals Tevel International and Golden Channels. According to GlobalComms, in May 2006 Matav entered into a formal agreement to purchase 100% of Tevel and Golden Channels, including their subsidiaries. The enlarged entity will continue to operate under the respective brands of the three CATV operators, as well as their co-owned subsidiary HOT Telecom. HOT is investing heavily in the expansion of internet, telephony and other value added services. The consolidation creates a player in a stronger position to compete with Bezeq, which recently said that it would stop injecting cash into its satellite TV unit, YES. The Antitrust Authority has blocked Bezeq from increasing its stake in YES from 50% to 58%. The former monopoly is also restricted in its ability to offer bundled service packages.

Israel, 012 Smile Telecom, HOT Telecommunication Systems