Golan secures 3G licence with deposit of financial guarantee

1 Aug 2011

Finally bringing an end to the merry-go-round of companies that had been allocated an Israeli 3G mobile operator licence, only to lose it for failure to meet the financial obligations of the concession, it has been announced that Golan Telecom has deposited the guarantees needed to secure the licence. According to Reuters, Golan, which is controlled by Michael Boukobza and Xavier Niel, the founder of French telco Iliad, deposited ILS360 million (USD105 million) in guarantees, paving the way for a commercial entry to the country’s wireless sector, and the would-be-player has now revealed it expects to launch in early 2012.

As previously reported by CommsUpdate, last month it was revealed that, on the back of confirmation that Select Communications had been disqualified from the tender for 3G licences held by the Israeli Ministry of Telecommunications (MoC) in April 2011 for failing to provide a bank guarantee from a local financial institution, Golan Telecom was handed the open concession as the next highest bidder. MIRS Communications and Marathon Investments initially won the two available concessions, paying ILS705 million and ILS710 million respectively, but the latter of the two failed to secure financing, meaning third-placed bidder Select was next in line for the licence. With Select also falling foul of financial matters – it had been required to present an ILS700 million guarantee from an Israeli bank, but instead obtained the guarantee from Goldman Sachs Group – Golan was required to present a guarantee for almost half of that figure, which in turn has led to speculation that MIRS may look to see if the MoC will lower the guarantee that it must provide, with the iDEN provider’s reasoning for such a reduction being that both Marathon and Select drove up the auction price, only for both to fail in raising the guarantee.

Israel, Golan Telecom