Cellcom initiates legal challenge to Golan Telecom, HOT Mobile deal

13 Jul 2016

Israeli mobile market leader Cellcom has launched legal action against smaller rival Golan Telecom, according to Reuters.

As previously reported by CommsUpdate, last month saw Cellcom claim that a network hosting deal between Golan Telecom and HOT Mobile breached the Share Purchase Agreement (SPA) and National Roaming Agreement (NRA) it had previously reached with the former. Back in November 2015 Cellcom had entered into an agreement with Golan’s shareholders to acquire a 100% stake in the company for ILS1.17 billion (USD303 million), only for the Israeli Antitrust Authority (IAA) and the Ministry of Communications (MoC) to block the deal on competition grounds in April 2016. Nonetheless, after that development Cellcom said it was working on an agreement that would allow Golan to continue to use its mobile infrastructure, only for HOT Mobile to subsequently reveal it was negotiating its own ten-year roaming deal with Golan. In response, Cellcom said that it had notified Golan that if the deal with HOT were to proceed, it would terminate the SPA and demand compensation of ILS600 million plus VAT as defined in that agreement, as well as the recovery of ILS300 million worth of discounts it provided to the smaller operator under the NRA.

Now, Cellcom has confirmed it is indeed taking action, issuing a statement yesterday (12 June) saying that, following Golan’s ‘subsequent rejection of said notice, [Cellcom has] commenced legal actions against Golan Telecom, including a request for an interim injunction against the consummation of the Golan Telecom – Hot Mobile agreement’. For its part, Golan has opted not to comment on the matter, the report noted.

Meanwhile, in separate but related news, Cellcom has disclosed that it is entering into a network sharing and hosting agreement with 018 Xfone, which secured 4G-suitable spectrum in the 1800MHz band at auction in October 2014, but has yet to enter the country’s mobile sector. In revealing the planned tie-up with 018 Xfone, Cellcom reportedly said that it does not expect this deal to have any impact on its dealings with Golan.