Israeli government to cap mobile contract early termination charges

6 Sep 2010

Israel’s Ministry of Justice has reportedly approved a proposal put forward by the Ministry of Communications (MoC) which aims to limit charges levied against customers that seek to terminate their mobile voice subscriptions early. According to Globes Online, the government has given the nod to measures that will see contract termination fees capped, with cellcos to be limited to charging no more than 10% of a customer’s monthly bill multiplied by the remaining months of his/her contract. Further, the proposal also stipulates that mobile operators may not request immediate repayment of any outstanding amounts linked to a customer’s purchase of end-user equipment (such as mobile handsets) as a result of a contract cancellation. Reaction to the development from the country’s cellcos has been mixed, with Partner Communications saying that it welcomed the move, while both Cellcom and Pelephone opposed the legislative change. The MoC said it was introducing the fee cap following numerous complaints from subscribers that overly-high early termination charges effectively prevented users from switching carriers.

The new law will come into effect in January 2011 when the Knesset Economic Affairs Committee will make the final ruling on it.