www.bethelfinance.com
The Ministry of Communications is about to announce a public hearing ahead of a decision to slash prices for infrastructures for which Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and HOT Telecommunication Systems Ltd. (TASE: HOT) charge Internet service providers (ISPs). As "Globes" reported, the ministry has concluded that Bezeq and HOT charge the ISPs very high and unjustified prices, and it has decided to intervene to sharply lower them.
The current giga agreement between the ISPs and Bezeq and HOT sets a price of NIS 25 per giga. The ISPs pay the two infrastructure providers tens of millions of shekels a year. The more data the ISPs transmit, the higher their payments.
The matter was put on the Ministry of Communications' agenda after HOT's latest sales campaign. A situation has been created in which the ISPs indirectly subsidize HOT's discount. HOT and its subsidiary HOT.net do not have the same giga agreement that HOT has with the ISPs, so HOT.net can afford to offer 100 Mpbs Internet access at NIS 20 per month, which greatly affects the competing ISPs.
The Ministry of Communications hearing will apparently not discuss cancelation of the giga agreement, because Bezeq and HOT have designated distribution networks for connecting users to the Internet, and these networks have costs.
However, the prices that Bezeq and HOT charge large business customers are much lower than the prices they charge ISPs. An examination by the Ministry of Communications found that the prices charged are tens of percent less, leading to the conclusion that the ISPs' are correct to claim that the prices should be slashed.
Bezeq's share price fell 1.6% by midday to NIS 6.36, giving a market cap of NIS 17.4 billion, and HOT's share price fell 2.6% to NIS 42.05, giving a market cap of NIS 3.3 billion.
No comments:
Post a Comment