Israel's Cell Phone Bad Boy Golan Telecom Shakes Up the Market Again

The company's newest radical discount - an entry price of NIS 0 - will likely force other small cellphone operators to respond with similar enticements, making it difficult to gain a foothold in the market.

Just when it looked like the cellphone market was settling down and that all the aggressive discounts for new customers had ended, industry bad boy Michael Golan has shaken things up again.

Golan Telecom announced a new discount on Wednesday for its new users and those who transfer from competitors: an introductory price of NIS 0 per month, available until the end of the April.

The impact of this discount goes well beyond Golan Telecom. The upstart company sets the tone among small service operators and the discount will force competing companies like HOT Mobile and YouPhone to respond.

"Golan Telecom hasn't rested for a moment and is coming out today with a new discount for Golan Telecom's unlimited service package," the company said in a statement on Wednesday. After the first two months of free service, the package will cost users NIS 99 a month, its regular price.

This isn't the first time the renegade carrier threw its competitors for a loop; during the recent Gaza war in November, the company offered the same package for NIS 49 a month, good for six months, until bumping up to its standard fare.  It was their way of "contributing to the community," as Golan said at the time.

Before that, in early October, family members of subscribers were eligible for four months free if they jumped ship at their old carrier and joined the Golan team.

Golan Telecom launched nearly a year ago, part of a wave of new rivals into the telecom industry that had previously been dominated in Israel by a monopoly of a three major carriers. As of the start of the year, the company counted about 150,000 customers, far behind its rival, HOT Telecom at 400,000.

Golan's extreme packages have encouraged its competitors to follow suit, which has made it difficult for them to stake a claim in the market and further eroded average revenue per user.

The company's previous dramatic discounts raised speculation that it was struggling to find new customers, a claim Golan has denied. 

Moti Milrod