Israeli mobile customers to face lower contract cancellation charges

25 Nov 2010

Proposals put forward by the Israeli Ministry of Communications (MoC) to limit and reduce the charges for customers cancelling their mobile voice contracts have been approved by the Knesset Economics Committee, the Jerusalem Post reports. The move is widely seen as an effort to boost competition in the country’s wireless sector, and commenting on the proposals, Moshe Kahlon, Israel’s communications minister, noted: ‘The exit fines charged by cellphone companies are the main barrier to competition in the market … Without the ability to switch between companies, there won’t be any competition. By removing the barrier of fines, the consumer’s bargaining power will be increased.’ The MoC had called for cancellation fees to be no more than 10% of a customer’s average monthly bill for each month left of their contract, but the committee in considering the proposals approved a limit of no more than 8%; the new restriction is expected to come into effect in January 2011 following the approval of the Economic Arrangements Law for 2011-12 and will be applied retroactively to current contracts.