Cellcom confirms MoC approval for HOT’s investment in IBC; files lawsuit against 018 Xfone over missed payments

9 Feb 2021

The Ministry of Communications (MoC) has given the green light to the proposed investment transaction between Cellcom, the Israel Infrastructure Fund (IIF) and Hot Telecommunication Systems, in fellow Israeli operator Israel Broadband Company (IBC). The development, which was announced by Cellcom, comes just a few weeks after confirmation that the Israeli Competition Commissioner had approved the deal, and following the MoC’s approval Cellcom has noted that this ‘completes the regulatory approvals and changes required for the completion of the transaction’. As such, completion of the deal is now expected to occur ‘in the coming days’.

In its announcement, Cellcom noted that the MoC’s authorisation for the transaction to proceed included certain amendments to IBC’s licence, including an obligation to reach 1.7 million households within five years and an obligation to provide a ‘shelf proposal’ to any operator interested in purchasing its services.

Meanwhile, Cellcom has separately announced the filing of a lawsuit in the Tel Aviv district court against mobile network sharing partner 018 Xfone and its controlling shareholder, for the enforcement of their network sharing agreement and payment of unpaid monthly dues totalling approximately ILS34 million (USD10 million). Such action has been taken after Cellcom in November 2020 first claimed that 018 Xfone had failed to make a monthly payment due under the pair’s network sharing agreement. With a further payment reported to have been missed in December 2020, last month then saw Cellcom confirm that 018 Xfone had sent it an annulment notice of the sharing agreement, in which the latter alleged Cellcom had materially breached the agreement by acquiring Golan Telecom’s share capital and terminating Golan’s MNO licence. Now, as part of the lawsuit filed by Cellcom, it has also confirmed filing for an interim injunction to prevent 018 Xfone from entering into any contradicting agreement to the existing network sharing agreement it has with Cellcom.

Israel, 018 Xfone (We4G), Cellcom, HOT Telecommunication Systems, Israel Broadband Company (IBC), Ministry of Communications