Israel issues tender for LTE spectrum

Israel's Communications Ministry has finally issued a tender for 1800 MHz frequencies to operate LTE and LTE Advanced networks in a move that will come as a relief to a market that has been impatiently awaiting the arrival of LTE services.

Also recognising that there are not enough LTE frequencies to support the existing five 3G mobile network operators in the country, the ministry said it would allow operators to cooperate on LTE networks. The aim is to have at least three LTE operators in the country.

Cellcom Israel, the country's largest mobile operator with about 3.1 million subscribers, said in a release that the bands will be awarded to the highest bidder with a minimum bid of 10 million shekels (€2 million/$2.9 million) for each of the eight available 5 MHz frequency bands.

A release by Cellcom rival Partner Communications noted that it and Cellcom already hold 1800 MHz frequencies and would be limited to bidding for up to two blocks each, with Cellcom limited to 8 MHz in total. Partner added that either eight 5 MHz blocks or seven 5 MHz and one 3 MHz blocks would be up for grabs.

Cellcom and Partner compete with Pelephone, owned by the fixed-line incumbent Bezeq, and newer operators Golan Telecom and HOT Mobile that also operate their own networks. The two newer players entered the market in 2012 when regulatory changes ushered in a total of six entrants, sparking a price war on the market.

Cellcom has already agreed 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. However, Cellcom said it may have to change elements of this agreement based on a draft licence amendment attached to the tender that sets out certain specific requirements for the approval of such network-sharing deals.

HOT Mobile and Partner have also formed a network-sharing deal that will allow the two operators to each offer LTE services.

However, it's not yet clear what the future is for Pelephone: the company had previously been included in a three-way deal with Cellcom and Golan, but that plan was thrown into disarray by a new network sharing policy published by the Israeli Minister of Communications (MOC). As things stand, Pelephone has said it intends to take part in the LTE tender.

Meanwhile Golan Telecom and HOT Mobile have shareholders that are responsible for some of the far-reaching changes on the French mobile market: HOT Mobile is part of the Altice group owned by Patrick Drahi, while Golan Telecom is partly owned by Xavier Niel, the man behind enfant terrible Free Mobile and Iliad.

For more:
- see this Cellcom release
- see this Partner release
- see the Bezeq release
- see this Reuters article

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