As “Globes” revealed yesterday, the Yes board of directors met yesterday to discuss the matter, in tense anticipation of the ISA’s decision, which is expected within the next few days

In the deal in which Bezeq bought Eurocom’s stake in Yes, the broadcaster was valued at NIS 2.1 billion. Since then, a series of write-downs have brought its value to NIS 1.35 billion. The new write-down will therefore almost wipe out its value

Two months ago, Bezeq reported an expected diminution in the fair value of its subsidiaries, particularly Yes. Today, a week before it is due to publish its 2018 financials, Bezeq has reported the extent of the expected write-down

As mentioned, Bezeq is still waiting for a decision by the ISA on whether it can treat the subsidiaries as a single accounting unit. If it received approval to do so, the write-down it will post will be immaterial. If approval is not forthcoming, Bezeq will make a write-down in its financials of NIS 1.5 billion in the book value of Yes, and its profit and shareholders’ equity will fall accordingly

At the same time, Bezeq said that its free cash flow would be higher by 12% than indicated by its guidance. The company’s EBITDA for 2018 is not expected to be materially different from its guidance

The update from Bezeq still does not include the effect of employee severance and the fall in value of its subsidiaries. The original guidance was for a net profit of NIS 1 billion. Bezeq had already announced that profit would shrink to NIS 464 million because of its streamlining plan, which includes early retirement by employees. A reduction of 15% from the original guidance plus the NIS 464 million reduction because of the early retirement program means that net profit is now forecast to be NIS 386 million, but the fall in value of Bezeq’s subsidiaries – particularly satellite broadcaster Yes  will mean that net profit will shrink further

Free cash flow was forecast to be NIS 1.5 billion, but the updated forecast is for NIS 1.68 million, while EBITDA is forecast to total NIS 3.9 billion

Bezeq’s share price is actually up 1.55% on teh Tel Aviv Stock Exchange this morning, while the share price of parent company B Communications is up 3.66%

Ra’anana-based DriveNets seeks to create a paradigm shift for telecom service provider networks as demand for services soar but customers are not paying more, so profits are shrinking

Combining technological innovation with a unique business model, DriveNets’ Network Cloud solution disrupts network economics. This is achieved by disconnecting network cost from capacity growth and allowing telecom providers to handle skyrocketing demand without sacrificing profitability. Network Cloud radically simplifies network operations, as it can create any network function from the same software stack and only two generic hardware building blocks. As the entire infrastructure is software-centric, Network Cloud accelerates new service rollouts at full network scale

DriveNets was founded in 2015 by CEO Ido Susan and chief strategy officer Hillel Kobrinsky and to date has been self-funded. Both founders have lucrative exits to their name: Susan previously cofounded self-optimizing network company Intucell, which was sold to Cisco for $475 million while Kobrinsky founded web conference specialist Interwise, which was sold to AT&T for $121 million. The company has 150 employees and plans to expand to 200 employees by the end of 2018

DriveNets signed its first major contract in 2017 with a tier-1 North American service provider, generating tens of millions of dollars in revenue. More deals have been signed with US and European telcos and 2019 revenue is expected to be in the hundreds of millions of dollars. The latest financing will fuel DriveNets’ ambitious growth plans, as it expands its product portfolio and penetrates new markets worldwide

Susan told “Globes,” “This is meant to be the company’s only financing round. We plan an IPO in the coming years”

Susan added, “We believe Network Cloud will become the networking model of the future. We’ve challenged many of the assumptions behind traditional routing infrastructures and created a technology that will allow service providers to address their biggest challenges like the exponential capacity growth, 5G deployments and low-latency AI applications”

When it launched its lifelong NIS 29 package in April 2018, Xfone said that the lifelong package would be available for only a limited time, but did not cite a cutoff date. The company is now halting its extraordinary bargain. Market sources predicted that the company would continue offering lifelong packages, although at slightly higher prices. The company may also offer packages with a fixed discount price, but for 2-3 years, similar to the NIS 19 two-year package it is currently marketing

Through its lifelong package, We4G maintained a high churn rate starting two months after it started, except for a few months when the rate was lower. It recruited 20,000 subscribers a month from other companies when it began, but this number gradually diminished. The company recruited 11,000 new subscribers last month, and it appears that it will also lead the market in recruiting subscribers from other companies in February

To a great extent, the fact that We4G continued its advertising campaign on Keshet for the entire period put very heavy pressure on mobile phone prices and prevented the mobile phone companies from raising their prices. There were other reasons for Pelephone Communications Ltd.’s refusal to raise its price, as Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), HOT Telecommunication Systems Ltd. (TASE: HOT), and Golan Telecom did, but the fact that We4G stood out with it NIS 29 lifelong package had its effect

It will be interesting to see how the price increase next month affects prices in the market, but it is doubtful whether there will by any great changes as long as the price of mobile packages remains lower than the companies’ average revenue per subscriber

Bezeq and its subsidiaries have about 5,500 employees, so that the cutbacks will involve 15% of the troubled telecom groups workforce

The layoffs, sources inform “Globes,” will be in proportion to each subsidiaries size in the entire group, so that 40% of the dismissals will be at mobile phone unit Pelephone Communications Ltd., the largest company in the group. The other layoffs will be at satellite TV company Yes and international call company and Internet Service Provider Bezeq Internationa

Bezeq’s subsidiaries all have Histadrut (General Federation of Labor in Israel) collective work agreements with their employees, so it will be no easy feat to implement the cutbacks. Negotiations with the various workers committees have only just begun and the layoff process is unlikely to commence until there is an agreement with the unions

Sources at Bezeq say that in effect the number of layoffs will be less because the company has not been hiring new employees

“In 2015-2018, the workers were paid, among other things, over NIS 80 million in a pay rise that averaged 3% (13% in a four-year period, while inflation was close to zero), and NIS 60 million for a joint welfare budget for welfare activities (including NIS 23 million for company vacations, over NIS 6 million for Purim parties, and over NIS 4 million for sports events). NIS 60 million went to budgets in the economic part of the collective agreement (entitlement and an increase in provisions for the advanced training fund, increased pension coverage, medical examinations, payments for kindergartens and summer camps, and clothing)

“It is important for me to stress that as long as the state of the company allowed it, we could go on vacations and enjoy enlarged welfare budgets, but we all realize that the times have changed. Unfortunately, what we were previously able to afford we can no longer allow. I believe, and you all must agree with me, that it is impossible to act differently at the present time. I am notifying you here that I have decided that my salary and those of my fellow managers will be substantially cut

“Before even one worker loses his job, cutting part of the large welfare budgets is both possible and mandatory. Before even one worker loses his job, it is possible and mandatory to forego salary increases in the near future. This is necessary and proper before laying off workers, and that is how I prefer that we act. Both management and the workers’ committee share a desire to avoid laying off workers, but unfortunately, we disagree about the question of which budgets should be discontinued this year. I want to make it clear that I intend to continue an open dialogue with the chairperson of the workers’ committee in order to arrive at an agreed solution that will also take care of the welfare of the company’s workers, and will also answer the need to cut the company’s costs, and above all, will avoid layoffs

“The chairperson of the workers’ committee is making great efforts to find solutions, both in talks with me and through other instruments, and I greatly appreciate it. I am convinced that with shared responsibility, we will succeed in finding the right way to reach understandings for the company’s benefit. As responsible group representing the workers, the workers’ committee realizes, as we do, the importance of preserving the Cellcom group as a successful company. I can guarantee you that I am constantly and tirelessly acting to maintain Cellcom’s standing as a leading communications group. No less important, however, I want Cellcom to be a rewarding workplace worthy of all of your trust and efforts. This is not an easy time for any of us, but I am confident that we will emerge from it strong and rejuvenated. I will continue to inform you of developments in this matter in the coming days”

Following the reports that Cellcom’s management planned to lay off workers, Nissenkorn said a short time ago that he intended to declare a labor dispute at the company, adding that he found Sztern’s behavior regrettable. “This action, and the unilateral way that management is taking it, undermine the relations of trust built between the parties in recent years, and are dragging the company into a deep crisis. Despite the many efforts of workers’ committee chairperson Mia Yaniv and Histadrut cellular, Internet and high-tech association chairman Yaki Halutzi to find an appropriate and agreed solution on behalf of the workers and the company’s future, management continues to act with an extreme lack of good faith, while severely damaging the fabric of labor relations at Cellcom”

Nissenkorn added, “The Histadrut fully backs the workers’ committee, and will use all of the means at its disposal to protect the workers’ status and job security”

Bezeq said that the demand for universal deployment on fiber optic bases could not be fulfilled. The company said that it planned to combine a number of technologies as the basis for its plan, and would deploy fiber optic infrastructure in 80-90% of communities in Israel, while upgrading speeds in the other communities using other technologies, due to technical difficulties

Sources inform “Globes” that Ministry of Communications director general Netanel Cohen is attempting to obtain the Ministry of Finance’s consent to finding a solution for universal deployment, either through a special budget or solutions such as an investment fund subsidized by the Ministry of Communications for universal deployment. It is believed that the Ministry of Communications realizes that demanding universal fiber optic deployment from Bezeq is unrealistic, and will make concessions in the matter

The sources added that the Ministry of Communications was considering creative solutions for vertical deployment of fiber optics, so that buildings in which fiber optics are deployed will not need more than one fiber per building, and the competitors wishing to provide services using the deployed fiber will pay the operator who deployed the fibers. The aim is to streamline and improve the work interfaces, so that competition will eventually be based on the services that the operators provide, instead of every building having several fibers, which is unnecessary

The Ministry of Communications plans to persuade the Ministry of Construction and Housing to require contractors to lay fiber optics for apartments in new buildings in order to avoid the necessity of redeploying them

Sources also said that the Ministry of Communications was aiming at a situation in which the new minister following the elections would have a comprehensive plan to consider that would be a breakthrough in promoting the project

In addition to the positive aspects of the meeting, there are still disputes and gaps, but sources on both sides who participated in the meeting expressed cautious optimism about the future. It is difficult to predict what will happen in the negotiations in the near future, especially with the upcoming elections, but this is the first time that the Ministry of Communications is starting to realize that investment in a project on such a vast scale requires the adaptation of its regulatory policy to the new era, and that the most important thing is not to adhere blindly to its current policy. The parties agreed to continue their talks

Bezeq’s share price is currently down 3%

At the end of 2017, the value of |Yes on Bezeq’s books was NIS 1.35 billion, a decline of NIS 1.2 billion within a year. Four years ago, Bezeq bought the 50% stake in Yes belonging to its then controlling shareholder, Shaul Elovitch, at a valuation for Yes of NIS 2.1 billion

Upgrading its core is an important step that will enable Partner to maintain its technological advantage on its mobile network, install new advanced technologies and services, and expand the capabilities of the IoT network it launched last year. The first stages of the plan will begin in the coming weeks, while the complete upgrade and installation of capabilities and the new core will be spread over a number of years

Mavenir provides end-to-end network solutions including vIMS advanced core services, a vEPC core for surfing on mobile devices, vRAN subnet radio for 4G, and a rich assortment of value added services (VAS). The company’s advanced solutions are installed at dozens of mobile phone operators all over the world, such as T-Mobile and Verizon, with a large market share of VoLTE and WiFi calling users. Based in the US, Mavenir operates in many European and Asian countries