مجموعة الاتصلات » israel

Partner delays payments to suppliers

ola — Mon, 16 Mar 2015 07:40:05 +0000

The veteran companies are struggling to compete with

new operators Hot Mobile and Golan Telecom.

Sources inform “Globes” that Partner Communications Ltd. (Nasdaq:PTNR; TASE: PTNR) has notified some of its suppliers that it intends to postpone its payments to them. Partner and Cellcom Israel Ltd.(NYSE:CEL; TASE:CEL) share prices plummeted following the announcement.

Partner last week reported a decline in its cash flow, and announced that it was considering a change in its payment method by reducing the number of its payments for end equipment, which currently stands at 36. A similar measure by the other major cellular companies cannot be ruled out.

Communications market sources said that Partner had notified various suppliers that would make payments to them on the basis of the end of the current month plus 123 days, instead of the end of the current month plus 30 days. The company said, “We are equalizing the terms for all of our suppliers, in line with the entire sector.”

Partner’s announcement does not augur well. The cellular market in Israel is suffering from an extreme imbalance, and the veteran cellular companies are facing unreasonable competition from the new operators, especially Hot Mobile Ltd. and Golan Telecom Ltd.. These two companies are producing the same product, one minute of cellular airtime, at a price far below what it costs the veteran companies to produce it.

The reason is that the Ministry of Communications has exempted Hot Mobile and Golan Telecom from the need to set up cellular networks, and is allowing them to consolidate networks with the veteran companies. These networks should be joint cellular networks with equal investments. In reality, however, the new companies are paying very little for the access they are being granted to the joint network.

A growing imbalance has therefore been created that is worsening the state of the veteran companies, which are having trouble selling at the same price as the new companies. The new operators are dogging the older companies’ footsteps and taking tens of thousands of subscribers away from them.

Golan Telecom is also not selling end-user equipment at all, and Hot Mobile is selling far less than the amounts sold by the veteran companies. Subsidizing these sales is an expense that is now having a dire effect on the companies’ cash flow.

Last week, “Globes” revealed another aspect of the problems in the cellular market. The older companies have greatly slowed the pace of their investments and deployment in 4G networks. Contractors and suppliers report that some of the companies have completely halted these investments. In any case, in the current state of affairs, the companies are unable to continue financing their current activity at the prevailing price level in the sector. This means that the veteran companies will have to undertake the extremely difficult measure of cutting personnel, investments, and new deployment for the rest of the year.

Spacecom to raise $50m debt

ola — Mon, 09 Mar 2015 08:54:21 +0000

Spacecom is due to launch the Amos 6 satellite in

2016.

Spacecom Satellite Communications Ltd. (TASE:SCC) seeks to exploit the high demand in the corporate bond market, and in advance of a debt issue that it plans to carry out announced yesterday that it had received agreement to the offering from the consortium financing the Amos 6 satellite project.

Spacecom provides satellite communications services around the world through its Amos satellites. The financing consortium comprises Israel Aerospace Industries, which is producing the satellite, and two financial entities from the US and Canada.

In accordance with the understanding between the parties, Spacecom will raise $50 million, with the first principal repayment not before 2020. The parties also agreed that for the new bond series a lien would be placed on the Amos 3 satellite, subordinated to existing liens, and that two thirds of the proceeds of the offering would be deposited in a trustee account, and would be used to repay existing or new Spacecom bonds.

The company, controlled by Shaul Elovitch’s Eurocom, added that from 2016 it would be able to take further loans or issue additional bonds, if it meets certain conditions set by the consortium, and that amendments had been made to the financial covenants to which the company was committed in 2015.

The Amos 6 satellite is meant to replace the Amos 2 satellite, due to go out of service in 2016. In late February, Spacecom announced that the launch window for Amos 6 had been deferred, and that it was expected to be in February-March 2016.

Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2015

Gilat wins largest ever contract

ola — Mon, 09 Mar 2015 08:52:20 +0000

Gilat Satellite Networks has won a $286 million

contract for telecommunications infrastructure in

remote areas of Peru.

Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT), which is controlled by the FIMI fund, has won a $286 million contract in Peru to set up telecommunications networks in rural areas. Gilat says that the contract with Fitel (Fondo de Inversion en Telecomunicaciones / Telecommunications Investment Fund) is the largest contract it has ever won.

Fitel’s regional initiative represents the complementary phase of the Peruvian National Fiber Backbone project, aimed to connect rural villages to broadband services. Within the framework of this phase, Gilat won the bids for three regional projects — in Huancavelica, Ayacucho and Apurimac.

These projects are BOT (Built, Operate and Transfer). The fiber-optic transport networks will be built, operated for 1 year and transferred to the ministry, while the access networks based on wireless technologies will be operated for 10 years before being transferred to the ministry. Gilat will connect about 600 public institutions to broadband services.

Gilat expects additional revenue to be generated by enabling cellular carriers to acquire network capacity to address the growing needs for voice, data, and internet in these regions.

“Gilat has demonstrated, with the successful rollout of the Integracion Amazonica Loreto (IAL) project in 2014, among many others in the region, that it has the required expertise to efficiently deploy large-scale network infrastructure in the most remote, mountainous and jungle areas of Peru,” the company’s announcement said.

“We are happy that Fitel has once again chosen Gilat for these challenging projects and we appreciate the continued confidence Fitel has in our ability to integrate and deliver communication solutions of all types,” said Gilat Satellite Networks CEO Erez Antebi, “Gilat’s experience in challenging terrain and its ability to overcome operational obstacles are key in achieving the government objective of connecting rural villages to broadband services.”

Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2015

Cellcom employees reach historic collective agreement

ola — Mon, 16 Feb 2015 07:44:56 +0000

The agreement includes raises for workers, bonuses, and profit-sharing arrangements.

Moblie operator Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), the Cellcom worker’s committee, and the Histadrut (General Federation of Labor in Israel) reached a historic collective agreement today. This is the second agreement to be signed in the mobile sector (the first was signed by Pelephone Communications Ltd.), and it includes many clauses that improve the position of the company’s workers, increase their wages, and allow them to share in profits.

The sides said that in a manner unprecedented in the mobile sector, the collective agreement includes the workers sharing in the company’s profits. 12.5% of any amount above NIS 400 million annual operating profit will be transferred to the workers on a quarterly basis, in the form of a profit-sharing bonus. The cost of the agreement to Cellcom is NIS 200 million.

The agreement does not detail how many Cellcom workers will be fired as part of the streamlining process that the company is planning to implement, and it appears that the number fired will be decided in cooperation with the workers’ committee and the Histadrut. It is reasonable to assume that, due to the rising competition in the mobile sector, Cellcom’s workforce, like those at the other companies, will be reduced significantly.

Already in the first year of the agreement, the company’s minimum wage will be 5% higher than the legal minimum wage. In every year covered by the agreement, the minimum wage will rise by an additional percentage point, on top of the rise in the legal minimum wage that is to be carried out in three stages.

The agreement further states that the workers will receive an annual raise on a differential basis. In the first year of the agreement, there will be an average rise of 3.14% for workers who have been at the company for 18 months, based on a table that factors in seniority and salary. In the second and third years of the agreement, an average raise of 3% of the fixed annual salary will be given; 1.25% of the rise will be fixed, and the rest variable based on performance.

The workers will also receive a signing bonus, and already in the first month following the signing of the agreement, they will receive a one-time bonus calculated based on how long they have been with the company.

Hot Mobile gains most new subscribers in Jan

ola — Mon, 02 Feb 2015 08:09:04 +0000

HOT Mobile’s NIS 40 a month two-line cellular package

helped attract 40,000 new subscribers.

HOT Mobile Ltd. rode its “couples bargain campaign” (a two-line cellular package for NIS 40 a month) to success in January 2015 with 40,000 new subscribers. Golan Telecom Ltd., the usual leader in new subscribers, added only 27,000 new subscribers.

HOT Mobile launched its new campaign after Cellcom Israel Ltd.(NYSE:CEL; TASE:CEL) announced the launching of its new television services. Cellcom, which recently attempted to halt its loss of subscribers with a package combining television and three cellular lines for NIS 199, has had no success thus far. On the day following the launching of this package, Golan Telecom offered a package for NIS 37 a month for the first line and NIS 2 for each additional line.Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) immediately responded with a lifelong cellular package on 012 Mobile at NIS 39 a month. Alon Mobile followed with a package for NIS 15 a month, and Walla Cellular also chimed in with an improved package. In response to the renewed liveliness in the market, the shares of veteran operators Partner and Cellcom plummeted, with shareholders losing hundreds of millions of shekels on their investment.

What caused the success of HOT Mobile’s campaign? It was the right bargain at the right price at the right time. The campaign also proved that the cellular market stands apart from other markets; those who linked it other sectors, such as Internet, landline telephony, or television, did not achieve the effect they hoped for. Israeli consumers prefer their attractive cellular package to be independent of other services. That is also the reason why other comprehensive bargains in the past were unsuccessful.

A bad month for the veteran companies

The veteran companies came off poorly in the results of customer churn. The figures show that Cellcom lost the most subscribers (27,000). Despite its bargain campaign, Partner shed 23,000 subscribers, followed by Partner with an 18,000 subscriber loss. Walla Cellular, which surfs on the Pelephone network, therefore could have expected better results in the figures for new subscribers. Its figures, like those of 012 Mobile, are not included in the subscriber mobility statistics. There were not many changes among the virtual operators: Rami Levy recruited far more subscribers than its virtual competitors, thanks to an aggressive bargain campaign, while YouPhone continued to lose subscribers, despite a particularly attractive offer.

YouPhone recently asked the Ministry of Communications to intervene in the matter of fictitious subscriber churn. The company said that it noticed this month that a certain company in the market had recorded fictitious churn of thousands of customers. These were new previously uncounted prepaid customers. This phenomena has created a gap in YouPhone’s churn and number of subscribers.

Israel awards 4G frequencies to six cellular companies

ola — Sun, 18 Jan 2015 08:48:06 +0000

Move will enable providers to upgrade service and offer

nationwide coverage

Israel awarded 4G mobile broadband radio frequencies in the 1800 MHz band to six companies, the Communications Ministry said on Tuesday, opening up the market and increasing coverage throughout the country.

Since last year the three largest cellular operators have provided fourth-generation coverage on existing networks in major cities. But Israel’s first auction of dedicated bandwidth is likely to pave the way to nationwide coverage.

Data speeds are much faster on 4G than 3G, enabling mobile-internet users to browse faster and run more complex applications.

Cellcom Israel and Partner Communications already provided 4G services on repurposed 3G networks, while Pelephone, a unit of Bezeq Israel Telecom, operated a 4G network on frequencies loaned to it by the Communications Ministry.

Monday’s 4G-frequency sale, which netted the Communications Ministry 250.5 million shekels ($63 million), comes well after similar moves in other western countries, although Israel’s 3G networks are among the world’s fastest.

Six companies, three new to 4G market

Cellcom was awarded 3 MHz of bandwidth, for which it paid 19.5 million shekels. It already had 12 MHz of 4G bandwidth, after receiving permission to convert part of its existing 3G network.

Partner – which operates under the Orange brand – paid 33.5 million shekels for 5 MHz of bandwidth. It already had 10 MHz of bandwidth. And Pelephone paid 96 million shekels to receive 15 MHz.

Three other companies entered the 4G market for the first time.

Hot Mobile, owned by the European cable group Altice, and Golan Telecom each bought a block of 5 MHz in the tender. Marathon 018, an Internet and long-distance provider, also bought 5 MHz, for its first foray into the mobile market.

Cellcom and Golan agreed to share a network, as have Partner and Hot. Network sharing is a common method of reducing setup costs.

Israeli media reports said Marathon 018 was also looking to set up a shared network with an existing mobile operator.

All the frequencies awarded were in the 1800 MHz band. Some countries operate 4G in numerous bands, between 800 and 2600 MHZ with higher frequencies carrying more data but having shorter reach.

UBS downgrades Bezeq over regulatory uncertainty

ola — Sun, 11 Jan 2015 09:45:05 +0000

Analyst Roni Biran is concerned about delays over the Yes

merger.

UBS has downgraded its recommendation for Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) from “Buy” to “Neutral” due to regulatory uncertainty. UBS analyst Roni Biran says there could be a delay in releasing Bezeq from the shackles of structural separation as well as a delay in its merger with Yes, and this creates uncertainty over the future of the company.

Biran adds that the entry of Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) to the TV market has resulted in a fierce response from rivals in the mobile phone market and this will hit profitability over the next year and affect the results of Bezeq’s mobile carrier unit Pelephone Communications Ltd..

Golan Telecom moves to counter WallaMobile

ola — Sun, 07 Dec 2014 08:51:16 +0000

Golan Telecom is increasing the volume of its cellular web

surfing from 2 giga to 3 giga, as provided by WallaMobile.

Golan Telecom Ltd. is making its initial response to the challenge posed by Walla!, which this week entered the mobile telephony market. Golan Telecom announced today that it was upgrading its surfing package to 3 gigabytes, as provided by theWallaMobile.

It is clear that Golan Telecom’s response is directly linked to concern that WallaMobile will succeed in cutting the number of new subscribers recruited by Golan Telecom. The company therefore decided to respond immediately by making its package terms equal to those of WallaMobile for Internet.

Starting today, Golan Telecom’s NIS 37 package will include 3 gigabyte of web surfing monthly, instead of 2 gigabytes up until now. The package includes unlimited calls and text messages, and offers a second line for NIS 18 (from the second to the fifth line – a total of six lines).

From now on, a NIS 9.90 package will include 100 call minutes a month to local and international destinations in 55 countries (instead of 60 minutes previously), 100-megabyte surfing (instead of 10 megabytes up until now), and unlimited text messages (unchanged).

The company announced it would increase the number of countries in the “All-in, including overseas,” plan.

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UBS: Competition still weighs on Israel’s mobile cos

ola — Thu, 20 Nov 2014 07:32:22 +0000

UBS Analyst Roni Biron sees the sector continuing to struggle

without mergers being permitted.

UBS Communications Analyst Roni Biron published a position paper this morning, in which he predicts that Israel’s mobile market will face a difficult year, due to the continued competition in the market. Biron says that there is an inherent problem in the mobile market, which will not be solved so long as the Ministry of Communications does not allow mergers, so there will be fewer operators.

The problem, according to Biron, is that there are too many players in the market, and another problem is that Golan Telecom Ltd. pays a fixed price to Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) for use of its infrastructures – which allows it to continue to be aggressive with pricing – “And I don’t view this as a temporary phenomenon,”says Biron.

Biron maintains a “neutral” recommendation for Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Cellcom, due to the drop in share prices, which have reached a low level. “We should take positive note of the companies’ abilities to generate cash flow and reduce debts,” says Biron. “They invested more in end-user equipment, and improved their margins on it, and there will be a reduction in costs for Partner and Cellcom as a result of infrastructure-sharing, so not everything is bad. I believe that the wholesale market, not necessarily television, but Internet and telephony will bring them revenue.”

Answering the question of why he did not issue a “buy” recommendation, Biron said, “I think that, in the end, the price race will not end so long as the Ministry of Communications does not allow a number of players to merge. It looks like we will see continuing pressure on subscriber prices in the coming quarters, and the ability to reduce costs and minimize working capital is becoming exhausted.”

Bezeq set to lose fixed-line monopoly

ola — Tue, 18 Nov 2014 07:25:47 +0000

Outgoing Communications Minister Gilad Erdan is opening the

fixed-line market to competition.

A dramatic decision by Minister of Communications Gilad Erdan on his last day in office. Erdan decided today to complete the policy of opening fixed-line communication to competition (wholesale market reform). Erdan accepted the Ministry ofCommunications opinion that there is no reason not to make a decision on the matter, even without a hearing for Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ).

The outgoing Minister of Communications chose to order the market to be opened to the main service under the policy, known in the industry as “bit-stream access.” In this service, the competitor leases the Bezeq internet line, end to end. The remaining services, which are less significant in the first stage for market competition, will be opened at a later stage.

Additional services that have been priced by the economics division and were agreed upon are telephony services and internet television services (multicast). As far as is known, Erdan decided to revise the bit-stream access service fee upward, but not significantly.

This morning, a meeting was held at the Ministry of Communications, with the ministry’s top management, in which they discussed the matter of opening the market. As was reported yesterday in “Globes,” the Minister of Communication pressured his office to complete the work before his departure for the Ministry of Interior, and, in recent days, management has made great efforts to accomplish the task. This morning, the figures were presented to the Minister of Communications, who found the to be work complete and ready, and therefore announced he would sign it.

Those present were faced with the question of whether Erdan would make a decision regarding opening the market to competition without conducting a hearing for Bezeq, and it appears that there was a unanimous decision that there was no reason not to make a decision, even without a hearing. Bezeq sent a letter to Erdan last week asking to be allowed to voice its reservations regarding the model, however, the ministry nonetheless decided it was not necessary. It is possible that Bezeq will file an appeal to the Ministry of Finance decision with the High Court of Justice.