December 29, 2014 / 1:46 PM / 5 years ago

Israeli mobile operator Cellcom enters TV market

JERUSALEM, Dec 29 (Reuters) - Israeli mobile phone operator Cellcom launched a new television service on Monday, providing the sector its first real competition in 15 years and possibly setting off a price war.

The entry of Cellcom, Israel’s largest cellular provider, comes nearly three years after the company itself was stung by competition in the mobile market that led to plunging revenue and profit.

It also comes during an election campaign that has centred on the high cost of living and the need to create more competition.

“We are tapping into what the Israeli consumer wants today. They want to see new competition and aggressive pricing,” said Nir Sztern, Cellcom’s chief executive.

Israel’s TV market is dominated by two companies, cable company HOT and satellite TV firm YES, a unit of Bezeq Israel Telecom. HOT is owned by French cable group Altice , which is controlled by Patrick Drahi.

With packages for HOT and YES priced at about 250 shekels ($64) a month or more, Israeli regulators have promoted competition from other telecoms companies.

Partner Communications, Israel’s second-largest mobile operator, has also said it plans to offer TV services.

Through its own set-top box, Cellcom’s offering will just be 99 shekels a month for an unlimited video on demand (VOD) package of TV shows, movies and children’s programming that is similar to the Netflix format and which will be available to watch on TVs, tablets and mobile phones.

It said it has bought content from Sony Pictures, Disney, BBC Worldwide, CBS, Lionsgate, NBC Universal, National Geographic and Nickelodeon, while Cellcom TV will also air a number of live Israeli channels.

Cellcom said that by offering TV, it has found a new revenue stream while believing it will be able to retain customers more easily by offering packages that include TV, Internet and phone.

Former Communications Minister Gilad Erdan said he expects cable TV rates to fall as much as 30 percent in 2015.

Cellcom’s shares were down 2.4 percent in afternoon trading in Tel Aviv. They have shed some 30 percent in 2014 and earlier in December, Cellcom dropped out of the blue-chip Tel Aviv 25 index.

$1 = 3.9275 shekels Reporting by Steven Scheer, editing by Louise Heavens

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