Is Israel's Biggest Telecoms Company Sabotaging Its Competitors?

TheMarker finds that many customers and competitors accuse Bezeq of bullying and sabotage

Bezeq had promised to roll out its fiber-optic infrastructure faster, in exchange for easier regulations, but instead it’s delayed them.
Ronen Topelberg

Eli, a 61-year-old accountant who asked not to be identified by his full name, tells about the troubles he has had with his internet connection after moving homes, which he blames on Bezeq employees bent on undermining the competition.

Eli is a customer of Cellcom Israel and when he moved to a new apartment a month ago he took his account with him, a triple play account that provides phone, internet and television. But after a few days, the internet went down. A Cellcom technician came to fix the problem, which he said was in the communications cabinet in the building’s basement.

Two days later, the internet went down again. This time Eli went down to the basement to see for himself what the problem was, and to his surprise he found a Bezeq technician there.

“I asked him, ‘Why are you disconnecting my line?’ and he struggled for an answer. I told him I would call the police because he is sabotaging my internet, and he answered, ‘We’re in a world war with Cellcom,’” Eli recalled. The technician declined to identify himself. Eli photographed the man and his car and got on the phone with the office of Bezeq’s CEO.

After two service disruptions, Eli’s wife wanted to drop Cellcom. “If I’d arrived five minutes later that’s what would have happened. What do I know about the Bezeq-Cellcom war?” he said.

Fix-it men
Who repairs internet infrastructure problems

Eli’s story isn’t the only one. An investigation by TheMarker, including interview with Bezeq’s competitors in the internet market as well as customers like Eli, point to a pattern of poor service and even sabotage.

The origins of the allegations against Israel’s biggest telecommunications provider go back to February 2015 when the broadband internet market was thrown open to wider competition. Under the new rules, companies could lease line from Bezeq as a government-controlled price of 50-60 shekels ($14 -$17) a month and offer internet service.

Bezeq, the dominant internet service provider in Israel, wasn’t happy about the arrangement since it collects about 90 shekels a month on average from its own customers for the service. Some 460,000 Israelis have opted for one of the rival services, known as wholesalers.

Bezeq said Eli’s version of the story is wrong – that Cellcom had used a Bezeq jack, meaning Bezeq was providing the service while Cellcom collected the fee and that Eli yelled at the technician, who it described as “very professional.”

If Eli’s story is true it represents an unusual case because he allegedly caught a Bezeq employee in the act. But interviews by TheMarker, backed up by complaints in the social media, point to no small number of complaints that look similar to Eli’s recollections.

Minimum work

Niv Lilien, for instance, also saw his internet service, provided by a wholesaler, also disconnected.

“A Bezeq technician came to my place and did the minimum work he could possibly do, Lillian said in a Facebook posting last January. “In other words he connected the jack, checked the quality of the signal, and that was it from his point of view. I had to get him to go outside almost by force to look at the cable. As we went out he asked me why I didn’t become a Bezeq customer. I answered him, ‘because you’re expensive.’”

Lilien said he was sure the technician would have done more for a Bezeq customer and the fact is his service suffered interruptions after the visit. “To judge from my case, what Bezeq is doing -- deliberately discriminating in servicing [wholesale] customers -- is an outrageous act that goes against opening the market to competition.”

One communications provider, which asked not to be identified, collected figures on the level of services provided by Bezeq technicians. On a typical day in May 10.9 percent of all new installations required a second technician to come to fix problems left by the first one; in August the rate was 16.1 percent. For service calls, 8 percent of all problems were not solved in the first visit by a Bezeq technician; in August it more than doubled to 17 percent. The company is planning to file a complaint with the Communications Ministry.

Another tiny provider called Triple C already has filed one, alleging that Bezeq is intentionally providing poor service.

“We feel – we know, including photographic proof, that Bezeq is playing the bully, which borders on criminal activity,” said CEO Rami Nahum. “They play around with our end-user equipment so that there are transmission problems, deliberately disconnect us and when there is a problem they tell our customers, ‘Leave them and come to us and you won’t have any more problems.’”

Nahum calls this nothing less than “sabotage” and said he is even weighing a personal lawsuit against Bezeq managers who believes are personally responsible.

In fact, the broadband reforms do create a conflict of interest for Bezeq, which is supposed to provide installation and service, for wholesale customers. It gets a payment for that, but the company claims the controlled price for it is below cost.

In response to the allegations, Bezeq cited a survey taken by the Smith Institute that showed satisfaction with service was the same for Bezeq and wholesale customers and said the number of internet subscribers was proof that the broadband reforms had worked.

That survey of 570 customers taken in January showed that 41% of wholesale customers experienced problems after they moved to a new provider. That compared with 40 percent for Hot telecom subscribers, Bezeq’s only non-wholesale rival, and 37 percent for Bezeq customers. The difference is not statistically significant.

On the other hand, 59 percent of those surveyed said they had infrastructure-related problems after moving to a wholesale provider, while only 49 percent of Bezeq subscribers reported infrastructure problems with their internet.

“Some communications providers prefer, through regulations, to force Bezeq to give their customers the full range of services, as absurd as that is, instead of setting up their own service networks,” it said. As a part of the campaign, the company said, they are inflating customer complaints.