Landline connectivity fee cut by NIS 0.01
Landline consumers will not benefit from the connectivity fee cut because most consumers have comprehensive calls plans.
The Ministry of Communications will cut the landline connectivity fee from 1.04 agorot per minute to 0.99 agorot. The final price will be set after Minister of Communications Gilad Erdan completes another round of talks with telecommunications carriers on their position on the price. The price update follows comments by the carriers and a correction in the calculation.
Carriers collect the connectivity fee for calls between different carriers, based on the number of minutes of calls. The public is less sensitive to the landline connectivity fee than to the mobile connectivity fee because prices for landline calls are much lower, currently averaging NIS 0.04 per minute.
The mobile connectivity fee was much higher until it was slashed from NIS 0.25 per minute to NIS 0.07, costing the mobile carriers billions of shekels in lost revenue. The reduction in the landline connectivity fee will have a much smaller effect on Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Hot Telecommunication Systems Ltd. (TASE: HOT.B1), estimated at a few tens of millions of shekels a year.
Landline consumers will not benefit from the connectivity fee cut because most consumers have comprehensive calls plans.
The new connectivity fee is a victory for Bezeq and Hot, as the fee will not fall by much more than what the Ministry of Communications has set, while mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) will have to be satisfied with a NIS 0.01 reduction.
Published by Globes [online], Israel business news – www.globes-online.com – on August 11, 2013