MoC will not cancel Bezeq, HOT structural separation obligations; gives in-principle approval for Cellcom’s purchase of Golan

17 Jul 2020

Israel’s Ministry of Communications (MoC) has confirmed via a press release that it will not cancel the obligation of structural separation imposed on both Bezeq and HOT Telecommunication. The decision comes in the wake of the Director-General of the MoC’s report to the regulator last month, to consider adjustments to structural separation obligations. According to the report’s findings, it was determined that – with regards to Bezeq specifically – the company still enjoys a dominant position in the sector, and it was argued that eliminating structural separation would likely hurt competing providers.

Bezeq, which had previously filed a petition in the High Court regarding the matter, has said it is now ‘studying the implications of both the State’s position and the report, while standing firm on its arguments in the petition’. The telco contends that the limitations of structural separation have placed it in a position of ‘competitive inferiority that is only worsening with time vis-a-vis other telecommunications groups’. Meanwhile, in light of the MoC’s decision regarding structural separation, the regulator has called for Bezeq’s petition to be dismissed.

In other news related to Israel’s MoC, Cellcom has announced that the regulator has confirmed, in principle, that it sees no reason to block the company’s proposed acquisition rival cellco Golan Telecom. In a press release regarding this matter, however, Cellcom noted that the execution of the transaction is still ‘subject to certain conditions, including the approval of the MoC, which are yet to be met’. As previously reported by CommsUpdate, in February 2020 Cellcom confirmed that it had entered into a binding memorandum of understanding (MoU) with Golan Telecom regarding the latter’s acquisition. At that date Cellcom said it planned to acquire all shares in Golan Telecom for a total consideration of ILS590 million (USD171 million), ‘subject to certain adjustments’.