Cellcom, Pelephone and Golan ink network sharing deal

10 Dec 2013

Israeli mobile network operator Cellcom has confirmed that it has entered into an agreement with both Pelephone, the wireless subsidiary of fixed line incumbent Bezeq, and Golan Telecom for the construction and operation of a shared 4G radio network. Further, the cellco revealed that it has also struck a deal under which it will share passive elements of cell sites for existing networks with Pelephone, while a separate Indefeasible Right of Use (IRU) agreement has been signed with Golan regarding Cellcom’s 2G and 3G radio networks.

With all three operators having said that they will cooperate in obtaining frequencies for the 4G network, the infrastructure that will use such spectrum will reportedly be constructed and operated by a separate, newly created entity that will be equally owned by Cellcom and Pelephone and overseen by a steering committee comprised of representatives from all three operators; strategic decisions regarding the 4G network will be reached by majority vote. Under the terms of the agreement, meanwhile, Cellcom, Pelephone and Golan will each be required to purchase and operate its own core network. Costs shall generally be divided equally among the three operators, subject to certain conditions and limitations set in the agreement, which will last for a period of 15 years. With the newly created entity managing and maintaining all of the passive elements of cell sites owned by Cellcom and Pelephone, it will also unify passive elements currently used for the 2G and 3G networks and manage and maintain the radio networks for both Cellcom and Pelephone. Each operator, however, will bear its own costs for such services and will continue to operate its own core network. In regards to the 2G and 3G IRU, Golan will be granted a right of use to Cellcom’s 2G and 3G radio network for at least five years (and for as long as they are operational); this agreement replaces the existing national roaming agreement with Golan already has with Cellcom. All of the agreements, however, remain subject to approval by both the Ministry of Communications and the Antitrust Authority.

Commenting on the developments, Cellcom CEO Nir Sztern noted: ‘The Israeli cellular market will face continued challenges in the coming years to deliver the demand growth for cellular data. The agreements will enable multiple players the ability to compete and offer cutting edge services while investing in infrastructure. The network sharing agreements will help reduce the number of cell sites and the reduced cost will help maintain competition to the benefit of the Israeli consumer.’ On the matter of the 2G and 3G IRU with Golan specifically, the executive added: ‘We are very pleased that Golan has elected to continue its cooperation with Cellcom. It is a vote of confidence in the Company’s quality service, of which Golan has benefited, from the date it has commenced its operations.’

Israel, Cellcom, Golan Telecom, Pelephone