Israel's Cellcom to share LTE network costs with rivals

Israeli operator Cellcom said it plans to share the construction and operation of an LTE network under a 15-year agreement with rivals Pelephone and Golan Telecom in order to meet the growing demand for mobile data services while keeping costs down.

In a statement, No. 1 operator Cellcom also said it will share passive elements of cell sites for existing networks with Pelephone, and has agreed to a right of use deal with Golan Telecom to let Golan access Cellcom's 2G and 3G networks.

"The agreements will enable multiple players the ability to compete and offer cutting edge services while investing in infrastructure," Cellcom CEO Nir Sztern said in a statement. "The network sharing agreements will help reduce the number of cell sites and the reduced cost will help maintain competition to the benefit of the Israeli consumer."

Cellcom also said the three companies will cooperate in obtaining frequencies for the LTE network, which will be constructed and operated by a separate entity that will be equally owned by the Cellcom and Pelephone and overseen by representatives from all three operators. The three operators will each invest in and operate their own core network.

Cellcom is Israel's largest mobile operator with about 3.15 million subscribers. Partner Communications is the country's second-largest operator and operates under the Orange brand. Last month Partner agreed to a similar network sharing deal with HOT Mobile, part of French cable entrepreneur Patrick Drahi's Altice group. Pelephone, owned by incumbent operator Bezeq Telecom, is the third-largest operator.

All three operators have faced considerable challenges since the market was opened up to more competitors, with six new operators starting operations in 2012.

Golan Telecom was one of those operators established last year "to revolutionise Israel's cellular market." It was founded by a group of French and Israeli entrepreneurs including Xavier Niel, the founder of Iliad and the Free Mobile in France. Niel's Iliad has also been seeking to be included in the network-sharing talks taking place between Bouygues Telecom and SFR in France.

For more:
- see this Cellcom release
- see this Reuters article

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