Communications Minister Gilad Erdan announced plans Thursday to reduce cable and satellite television service prices, calling the current setup a farce.
Erdan hopes to emulate his predecessor, Moshe Kahlon, who successfully addressed the cellular service industry. Where Kahlon encouraged the entry of new players into the mobile telephone service market, Erdan said he would require cable operator Hot and the Yes satellite television service to offer basic television services with limited channel offerings for NIS 120 a month.
“For too long, the cable and satellite companies have sold us expensive packages with too many channels that we don’t know. Even a ‘basic package’ has been sold to us for NIS 250. That’s a lot more than people in other countries pay and that doesn’t make sense,” Erdan wrote Thursday on a Facebook post.
Currently, the firms’ regular channel packages offer dozens of channels for between NIS 210 and NIS 220 a month. In fact, the average revenue per customer is even higher − up to NIS 260. They do, however, offer a very basic package of 15 channels for NIS 149. (See chart for details.)
For years, regulatory agencies and Knesset members have tried to reduce the price of television services by offering packages with limited numbers of channels, but their efforts have repeatedly failed in the face of the argument that it would lead to the collapse of the two existing service providers.
A proposal to allow the cable and satellite service providers to insert their own advertising into the broadcasts failed to proceed due to pressure from the commercial television stations.
The limited 15-channel package began to be offered about half a year ago, as a pilot, at the initiative of the Council for Cable and Satellite Television Broadcasting, but the package is not seen as attractive. According to Erdan, only 3,000 customers have signed up so far.
Erdan took the two television-service providers to task in his Facebook posting for their approach to basic channel packages: “Outwardly, there is a such a package but, somehow, it’s full of channels that people are barely familiar with, and it’s also slightly hidden from the public,” he said.
As an example, he cited media mogul Haim Saban’s Zoom children’s channel on Hot, which he compared to the more widely watched Children’s Channel. “Have you heard of the Children’s Channel?” Erdan asked rhetorically. “You have. And who’s heard of Zoom? Most of us are not familiar with it, but this is what Hot chose to offer on its children’s programming schedule for its limited channel package.”
Initially, Erdan is planning on forcing Hot and Yes to offer a basic package for NIS 120 a month. “Although it’s true that I have been in the job for only a short period of time, in my opinion this is the most urgent task − stopping this farce. After marathon discussions, we have managed to put together a proper proposal, and I intend to submit it to the Finance Ministry,” he wrote.
Yes and Hot declined to respond to Erdan’s comments.
Erdan also has the option of bringing down pricing by increasing competition. One approach contained in a draft of the Economic Arrangements Bill (the supplementary legislation to the budget) would add 12 new channels to Idan Plus, the television converter box that provides a limited number of stations for a one-time charge.
Idan Plus does not require viewers to subscribe to cable or satellite television. It currently provides Channels 1, 2, 10, 23, 33 and the Knesset Channel (Channel 99). It also offers national and regional radio stations.
Cellular service providers Cellcom and Partner, which does business as Orange, have said they plan to offer Internet-based television services − Internet Protocol Television, as it is called − but plans for their services have not progressed due to the current unprofitability of the service absent clearer regulation of the wholesale landline market.
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