A new player may be joining the cell phone sector to compete for Israeli Arab customers, but questions are being raised about possible conflicts of interest.
On Thursday, the Communications Ministry announced that it had granted a license to Tel-Rav Cellular Communications to offer mobile phone service through a virtual network, meaning that the company would lease capacity from an existing cellular firm rather than build its own network. It’s all happening nine months after Israelis’ cell phone bills plummeted with the entry of new competition.
Tel-Rav is partly owned by businessmen Ram Belinkov and Amos Lasker, while Avi Teitelman is a board member. The problem is that Teitelman served in the past as deputy director-general of the Communications Ministry. He remains a senior adviser to the electricity authority.
Also, Lasker is a former chief executive of the Israel Electric Corporation and a former chief executive of Med-1, a company involved in underwater cable communications.
Belinkov has served as the Finance Ministry’s budget director and has been the chief executive of international long-distance provider Golden Lines and cable and communications firm HOT.
But Lasker, Belinkov and another partner also own a solar energy venture, Sun Team, which is seeking to establish solar energy farms that require licensing from the electricity authority and, it might be argued, from Teitelman himself.
Teitelman has served as a senior adviser to the authority since 2004, and his contract there was recently extended after he submitted the only bid to get the job. Although not serving in an official position at the authority, he oversees regulation of private-sector electricity production. He is considered a key player at the authority and in the electricity sector as a whole.
The electricity authority responded: “Mr. Teitelman does not advise any entity in the electricity economy or any entity whatsoever with an interest in the electricity economy, but rather the Utilities Authority Electricity exclusively. The areas in which Mr. Teitelman advises the Utilities Authority do not include renewable energy. The involvement of other controlling owners of a virtual cellular operator in renewable energy is being carried out in another business context.”
The authority added that it sees no grounds on which Teitelman should be prevented from continuing to provide advice.
Tel-Rav plans to tailor its product to the telecommunications needs of Israeli Arabs including international long-distance calls. The brand name and chief executive remain to be chosen.
The receiving of a license is no guarantee the company will get up and running. In addition to the possible conflict of interest, the firm needs to strike an agreement with an existing provider to host the new company’s mobile phone traffic.