Israel’s Ministry of Communications set to foreclose Golan Telecom guarantees

16 Dec 2015

Israel’s Ministry of Communications (MoC) has reportedly notified Golan Telecom that it intends to penalise the cellco for failing to meet its deployment obligations. According to Globes Online, it is estimated that the initial foreclosure of the cellco’s guarantees will amount to between ILS30 million and ILS40 million (USD7.8 million-USD10.3 million). In total the MoC holds ILS80 million in guarantees from Golan Telecom, while the operator also received a ILS270 million reimbursement of guarantees that it deposited when it won the cellular tender; it has been suggested that the MoC could yet consider demanding the latter amount from the cellco for its transgressions.

As per Golan Telecom’s concession, the operator is required to have deployed its infrastructure to cover 40% of Israelis by January 2016. While the MoC had been expected to wait for a January 2016 inquiry to decide whether the cellco was meeting its coverage obligations, the report claims the early decision on the matter has come about due to Golan’s dismantling of the majority of its cell sites across the country.

Meanwhile, it has also been said that the regulator plans to act cautiously and not use all the measures at its disposal immediately, given the uncertainty concerning Golan Telecom’s proposed merger with Cellcom. With Golan Telecom and Cellcom having already applied for approval of their merger, they are currently waiting to begin negotiations with both the MoC and the Antitrust Authority director general. However, the Ministry of Finance – which strongly opposes the merger plan – has already reportedly notified Golan Telecom that it will look to reclaim its mobile spectrum should the deal go through.