Pelephone and Cellcom said to be prepping for legal battle over network merger plans

13 Dec 2013

Following suggestions that Israel’s Antitrust Authority may not approve the planned joint network announced by local cellcos Pelephone and Cellcom, Globes Online claims that the duo are preparing for a legal battle. With it having been claimed the antitrust watchdog is unlikely to approve the JV plans amid claims the agreement could effectively create a partnership between the two cellcos, which could in turn allow them to dominate the sector, both mobile operators said to have hired legal representation. Should the Antitrust Authority give the companies’ plans the go-ahead, it is also possible that it could establish conditions for the network merger. While the mobile operators could opt to agree to any such conditions, they could also choose to take the matter to the Antitrust Tribunal in order to challenge the Antitrust Authority.

As previously reported by CommsUpdate, earlier this week Cellcom confirmed it had entered into an agreement with both Pelephone and Golan Telecom for the construction and operation of a shared 4G radio network. Further, the cellco revealed that it had 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. 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.

Israel, Cellcom, Pelephone