Bezeq's Pelephone makes offer for rival Golan Telecom

Bezeq said its mobile subsidiary Pelephone Communications has made a conditional offer to buy rival Golan Telecom, without revealing any financial details.

The offer could signal the start of a consolidation trend in the Israeli mobile network services market, which is highly competitive. Only last week the new director general of Israel's Ministry of Communications Shlomo Filber told Bloomberg that competition had gone too far in the mobile services market, with prices that were too low and too many operators competing for market share.

Since then, Filber has issued a statement saying that while he believes mobile prices are too low, he thinks that market forces rather than regulation will deal with this issue, according to the Times of Israel.

In August, Golan Telecom shareholders gave Bank Rothschild the mandate to "evaluate and explore options that could lead to a sale, acquisition, merger, but could also leave Golan Telecom independent." The Times of Israel said that founder Michael Golan was seeking ILS1 billion (€235 million/$250 million) for the company.

Cellcom Israel has previously expressed interest in buying its smaller rival. The two operators are already in negotiations over a 3G and 4G network-sharing agreement with the Ministry of Communications.

Altice-owned Hot Telecom was also reported to have been examining a merger of its Hot Mobile unit with Golan, but a spokesman for the company told Reuters that Altice and Hot are not negotiating to acquire Golan Telecom.

"The company is focusing on further growing its existing business in Israel," the spokesman said.

Israel's mobile market was opened up to competition in 2012, when six new operators including Golan Telecom and Hot Mobile entered the market. Globes reported in July that only one MVNO -- Rami Levy -- was left in the Israeli market after Cellcom bought Home Cellular and Pelephone acquired YouPhone.

Hot Mobile has around 1.2 million subscribers, Golan Telecom 900,000 and Pelephone about 2.5 million.

Pelephone has also recently gained a new CEO: Bezeq's deputy CEO Ran Guron is replacing Gil Sharon, who resigned just over a week ago. Guron started his career as marketing director at Cellcom Israel.

For more:
- see this Reuters article
- see this Times of Israel article
- see this Globes article

Related articles:
Israeli telecoms chief signals change in approach to competition
Israel's Pelephone net profit more than halved during Q2
Israel's Cellcom mulls purchase of rival Golan Telecom
Orange sets terms to end brand-licensing deal in Israel within 2 years
Cellcom Israel, Golan Telecom seek approval for network-sharing deal

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