Golan Telecom Setting Its Sights on Israel's Landline Market

Golan’s entry could bring a potent dose of competition to the landline market. Down the line, consumers can expect low-priced all-inclusive packages Golan is known for.

After rocking Israel’s wireless communications market for just over a year, Golan Telecom is now setting its sights on the country’s landline market for telephone, Internet and perhaps even cable TV services.

TheMarker has learned that the company requested a trial license in landline technology from the Communications Ministry that would entail piggy-backing on Bezeq’s infrastructure. Golan CEO Michael Golan was already given the green light for the trial by Bezeq CEO Stella Hendler. The first stage will encompass several dozen lines.

The Communications Ministry is attaching two main conditions to trials of new telecom technology: Service must be offered for free and the experiment must be limited to no more than 10,000 users. Trial licenses have been awarded in the past to test, for example, WiMax technology and cellular voice over Internet phone calls. In 2007 Hendler, then CEO of 012 Smile, took out a temporary license to enter the telephony market.

Golan’s entry could bring a potent dose of competition to the landline market. In the cellular field Golan has played a major role in keeping rates in check by not hesitating to knock heads with rivals. Just like he’s instituted low-priced all-inclusive packages in the wireless market, consumers have reason to expect he will do the same in landline.

Packages could include cellular and landline phone and Internet services and, further down the road, cable TV as well.

Golan Telecom is the fourth company to express an interest in the wholesale model. Cellcom Israel and Partner Communications also want to reach homes but haven’t been able to agree on terms with Bezeq and still haven’t asked the Communications Ministry for licenses. Cable provider HOT Telecommunications Systems, meanwhile, refuses to discuss sharing its infrastructure.

But 018 XPhone did reach an agreement with Bezeq over the engineering configuration and the price of a line, and presumably will be the first to bring service packages into the homes of consumers towards the end of the summer.

The bone of contention is the regulated price Bezeq can charge for leasing a phone and Internet line to its competitors. The Communications Ministry retained the consulting firm Frontier Economics to conduct a two-year analysis but the results have not yet been released.

According to a market source, the prices that the ministry is proposing are NIS 59 a month for a line into the home with Internet speed of 10 megabits per second and NIS 65 per month for speed of 100 MBPS.

Moti Milrod