Tender for IEC fibre-optic telecom venture delayed by three months

10 Aug 2012

The tender for the creation of the telecommunications company which will operate over infrastructure owned by the Israel Electric Corporation (IEC) has reportedly been delayed by three months, Globes Online is reporting. It is understood that the committee in charge of the process has made the decision to push back the process in the hope that this will ensure all preparations for the tender are fully complete. The decision comes after Sweden’s ViaEuropa AB, which is the only company to have formally expressed an interest in the venture, called for the delay amid claims that the tender’s preparations were not complete and that the government had still to complete the arrangements for transferring IEC’s assets to the venture.

As noted in TeleGeography’s GlobalComms Database, in early October 2011 the Israeli government announced that it was seeking an investor to help build a 25,000km fibre-optic network that would bring ultra-high speed internet to Israel and increase competition. Approximately 65% of the population are expected to be able to access the internet at speeds of 100Mbps by 2018, with the remainder of the country receiving coverage by 2020. Under the initial plans, the investor would have taken a 51% stake in a new private company, with the JV originally expected to be formed by April 2012. Registration to participate in the process opened on 10 October 2011. More recently, in June 2012, with a view to encouraging bidders, the state decided to reduce IEC’s holding in the proposed joint venture to 40%, while lower initial investments and longer deployment deadlines were also introduced as a means to making the proposition more attractive. Despite such a move, it was suggested at that date that a fundamental issue regarding IEC’s relationship with any would-be partner remained, with potential bidders thought to have suggested the powerco’s terms were unreasonable, in part because it had refused to reduce the JV’s planning and work costs, while also refusing to allow private contractors to be used on its infrastructure.

Israel, Israel Electric Corporation (IEC)