Electra agrees USD91m deal to acquire Golan Telecom

4 Jan 2017

Israel’s Electra Consumer Products has struck a deal to acquire local mobile network operator Golan Telecom, Haaretz reports. With the purchase costing Electra ILS350 million (USD91 million), it ends continued speculation over the future of Golan, after rival Cellcom filed a request in November 2016 calling for the appointment of an interim liquidator to Golan, following the latter’s failure to pay amounts it was said to owe Cellcom for national roaming service. Although the transaction is subject to the approval of the Ministry of Communications (MoC) and the Antitrust Authority, it has been suggested by Haaretz that it is unlikely to face any opposition.

Alongside the deal to acquire Golan, Electra has inked a network sharing agreement (NSA) with Cellcom, which will generate around ILS210 million a year before taxes for the latter, with the final sum said to be dependent on the number of subscribers signed up to Golan Telecom and their usage levels. As part of this agreement the two cellcos will cooperate in the development of a shared 3G and 4G network and ‘future technologies’ using both parties’ frequencies, with this infrastructure to be operated by a separate, newly created, 50/50-owned entity. In addition, Cellcom has confirmed it will also allow Golan to access its 2G network as part of the deal.

Meanwhile, as part of a Mediation Agreement between Cellcom and Golan Telecom it has been noted that the latter will pay a reduced monthly payment for the national roaming services provided by Cellcom as of May 2016 and those services to be provided until the closing of Golan’s acquisition by Electra; Cellcom has said it will waive the difference between the new reduced monthly payment and the original charge agreed under the existing agreement. Finally, under the Mediation Agreement Cellcom has also confirmed that all legal actions filed by it and Golan against each other are being dismissed.

Israel, Cellcom, Golan Telecom