JERUSALEM Dec 10 Cellcom, Israel's
largest mobile phone operator, said it agreed to share the
expense of setting up a new fourth-generation (4G) network with
Pending regulatory and anti-trust approval, Cellcom will
construct and operate a shared 4G radio network with Pelephone
and Golan Telecom.
Pelephone, a unit of Bezeq Israel Telecom, is
Israel's third-largest mobile operator. Golan, partly owned by
Xavier Niel - who founded France's Iliad and its Free
Mobile service - began operations last year when the
Communications Ministry opened the sector to competition to
lower mobile phone rates.
The addition of six new providers shook up the mobile
segment, sending calling rates, share prices, revenue and profit
of the incumbent carriers tumbling.
Nir Sztern, Cellcom's chief executive, said on Tuesday
Israel's cellular market will face continued challenges in the
coming years to meet the demand growth from mobile data.
"The network sharing agreements will help reduce the number
of cell sites and the reduced cost will help maintain
competition to the benefit of the Israeli consumer," he said.
Cellcom said the sharing agreements would likely result in
substantial operating and capital expense savings.
Under the deal, the three operators will cooperate in
obtaining frequencies for the 4G network, which will be built
and operated by a newly created entity equally owned by Cellcom
Each operator will be required to purchase and operate its
own core network and costs will be divided equally among the
three operators, subject to certain conditions and limitations
set in the agreement, which is for 15 years.
Last month, Partner Communications, Israel's
second-largest mobile operator, entered into a similar network
sharing deal with HOT Mobile, which is controlled by French
cable entrepreneur Patrick Drahi.