Bloomberg News

Bezeq Gains on Bets Company Will Bundle Services: Tel Aviv Mover

November 22, 2012

Bezeq Israeli Telecommunication Corp. (BEZQ) gained the most in more than five weeks on bets a deal giving mobile phone companies access to the operator’s land-line network will pave the way for bundled services and cost cuts.

Shares of Israel’s biggest fixed-line provider advanced 2.2 percent, the most since Oct. 16, to 4.76 shekels at the market close in Tel Aviv, trimming the decline this year to 27 percent. The TA-25 index gained for the fourth day in five, adding 2.5 percent this week.

Tel Aviv-based Bezeq’s board approved an agreement that will allow Partner Communications Co. (PTNR), the nation’s second- biggest mobile phone provider, buy access to Bezeq’s fixed-line network that it can use to offer customers services including internet and media. Bezeq said the move may be a step toward attaining government approval to integrate its business units, enabling it to offer so-called triple play packages combining TV, internet and phone services. Bezeq now offers each of these services through separate units.

Integrating Bezeq’s businesses “will enable Bezeq to save over a billion shekels a year in costs,” Eran Jacoby, head of research at DS Securities & Investments in Tel Aviv said today by phone.

Boosting Competition

The move, which is a step toward creating a wholesale market in Israel, comes as the Communications Ministry changes regulations to increase competition in the wireless and fixed- line telecommunications industry. Bezeq shares have been third- worst performers on the TA-25 index this year, after mobile phone providers Cellcom Israel Ltd. (CEL:US) and Partner, as the government forced the companies to cut fees and encouraged new players to start operations. Partner shares advanced 2 percent to 23.77 shekels, the highest since May 14. Cellcom shares gained 2 percent.

Bezeq and Partner are still negotiating prices and once a detailed agreement is reached, Bezeq will publish it and allow all mobile phone companies to access its network on the same terms, it said today. The publication of a detailed agreement may lead the Antitrust Commissioner to allow Bezeq to increase its stake in its D.B.S. Satellite Services (1998) Ltd. unit, the company said.

Internet Gold-Golden Lines Ltd. (IGLD:US), which has a stake in Bezeq via its B Communications Ltd. (BCOM:US) unit, surged 6.6 percent. B Communications (BRCD:US), owner of a 31 percent stake in Bezeq, advanced 11 percent.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net


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Companies Mentioned

  • CEL
    (Cellcom Israel Ltd)
    • $10.12 USD
    • -0.04
    • -0.4%
  • IGLD
    (Internet Gold-Golden Lines Ltd)
    • $9.16 USD
    • 0.07
    • 0.76%
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