Cellcom agrees LTE network-sharing deal with Golan, but not Pelephone

The future of Israel-based Pelephone's LTE network-sharing plans look increasingly unclear after Cellcom Israel said it has entered into an LTE network-sharing deal with Golan Telecom that will enable the newer operator to use Cellcom's LTE network and its existing 2G and 3G networks.

Pelephone had previously been included in a three-way network-sharing agreement with Cellcom and Golan for LTE, but a new network sharing policy published by the Israeli Minister of Communications (MOC) appears to have thrown elements of those plans, such as the sharing of frequencies, into disarray.

Cellcom said earlier in May that after studying the new MOC policy, it recognised that the agreement with Pelephone and Golan for the construction and operation of a shared LTE radio network "does not meet the policy principles and therefore will not be approved by the MOC".

At the time, local newspaper Globes said that Pelephone and Cellcom had started talks on a new agreement that would then be submitted for approval, citing unnamed sources. The paper noted that the new MOC policy explicitly states that operators can share all network components, except for frequencies.

Now, Cellcom said Golan will be provided with an Indefeasible Right of Use, or IRU, to Cellcom's future LTE radio network for at least five years and nine months. "Each of [Cellcom] and Golan will provide the required frequencies for the operation of the 4G radio network and purchase and operate their own core network," Cellcom added. Golan already uses Cellcom's networks for its existing mobile services.

The agreement between Cellcom and Golan is still subject to approval by the Antitrust Commissioner and the Ministry of Communications. It follows approval by the Antitrust Commissioner last week of a network-sharing deal between Hot Mobile and Partner Communications that will allow the two operators to each offer LTE services in future.

According to an article published on Sunday by Globes, while Cellcom and Partner have been able to secure deals with new operators that would enable them to generate additional proceeds from their LTE networks as well as share the costs of building them, Bezeq-owned Pelephone looks increasingly isolated.

Globes said the implication as things stand is that Pelephone becomes the only company in the market that would not compete together with a new operator, and would therefore be at a disadvantage compared to its competitors Partner and Cellcom.

Globes previously reported that the Minister of Communications, Gilad Erdan, plans to publish an LTE tender in June, and could then hold a spectrum auction in September.

Reports in April suggested Israel's Ministry of Communications is looking to establish three LTE networks and will allow almost unrestricted cooperation on infrastructure.

Cellcom is Israel's largest mobile operator with about 3.1 million subscribers. Partner Communications is the country's second-largest operator and operates under the Orange brand.

For more:
- see this Globes article (translated by Google Translate)
- see this Cellcom release
- see this separate Cellcom release

Related Articles:
HOT Mobile gains network-sharing approval, as Israel creeps towards LTE
Israel's Pelephone picks Ericsson for LTE
Israel's Cellcom picks NSN for LTE, plans deployment by end of 2014
Israel's Cellcom to share LTE network costs with rivals
Israel's Partner, Cellcom look to mobile TV for new revenue

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