Israeli operators’ merger plans come closer to reality

Israeli operators’ merger plans come closer to reality

The likely purchase of Israeli operator Golan Telecom by Cellcom has come a step closer with news that the country’s Ministry of Finance sees no reason to oppose Cellcom’s acquisition of its rival.

Both Reuters and regional media suggest that this development, confirmed in a letter from the ministry’s budget department, means that the acquisition can go ahead, subject to approval from the Israel Competition Authority.

The Ministry of Communications (MoC) and the Israel Competition Authority were the recipients of the letter in which the finance ministry concluded that the merger’s impact on the level of competition, prices and the amount of investments in the market did not raise enough concerns for the ministry to oppose the request. The letter also remarked on the “multiplicity and variety of players in the mobile telephony market”.

That certainly seems like a reasonable assertion. There is a highly competitive mobile sector in Israel, with six mobile operators, four of which claim over a million mobile connections, and a number of MVNOs. The country now boasts over 100 per cent mobile penetration (Israel’s population is about 9.2 million).

Golan Telecom is the fifth-largest operator with about 849,000 connections, behind Altice’s Hot Mobile, Bezeq’s Pelephone, Partner and Cellcom. Cellcom will take a commanding lead in the market if it absorbs all of Golan’s customers, though there has been much speculation that more consolidation is on the way in Israel’s mobile market.