MoC to allow Cellcom, Partner to acquire stake in IBC

22 Jun 2016

Israel’s Ministry of Communications (MoC) has made the surprise decision to allow mobile network operators Cellcom and Partner Communications to buy control of Israel Broadband Company (IBC), which is rolling out fixed broadband services over the fibre-optic network belonging to Israel Electric Corporation (IEC). Local press outlet Haaretz cited a statement issued by the ministry as saying: ‘The ministry has given approval to two companies that now lack infrastructure to bid to invest in IBC.’

With Cellcom and Partner having previously been barred from holding stakes in IBC, the MoC has confirmed the duo will be allowed to become controlling shareholders, with the decision said to have been prompted by the broadband infrastructure firm’s ongoing struggles. According to the report, disputes between the current partners in the joint venture (JV) – a consortium led by Sweden’s ViaEuropa and IEC – have seen it struggle to gain traction, and it is claimed the company currently has just 2,500 customers.

Notably, the MoC’s statement came just a few hours after Partner had announced the submission of a letter to the ministry’s director general about options for deploying a nationwide fibre-optic network. While this letter was not said to have included any reference to IBC, the company was cited as saying in it: ‘Partner’s goal would be to deploy a fibre-optic-based infrastructure as part of its overall strategy to become a comprehensive telecommunications group. The independent, fibre-optic-based infrastructure would allow the company to offer faster internet services in Israel, as well as the transmission of advanced and high quality television services.’

As previously reported by TeleGeography’s CommsUpdate, earlier this month it was claimed that IBC was seeking partners to invest around USD300 million in the fibre-optic network rollout project. Rothschild was said to have been called on to help IBC find investors, with an emphasis on local companies. At the time, one source with knowledge of the matter claimed that Partner had conducted preliminary work into the feasibility of a potential partnership, though a spokesperson for the cellco at that date stressed that no decisions had been made.

Israel, Cellcom, Israel Broadband Company (IBC), Ministry of Communications, Partner Communications Company