In a Change of Strategy, Cell Phone Companies Trumpeting Technology

With Hot, Golan offering super-low rates, three veteran players seeking alternative pitches that emphasize speedy networks and services.

Amir Teig
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Amir Teig

It seems like it's 2004 all over again for the big three cell phone operators, who are trumpeting their technology just as they did when third- generation networks were the latest thing eight years ago.

Of course, there are the new fourth-generation networks. But the three veterans companies - Pelephone, Partner Communications and Cellcom Israel - have another good reason to talk tech: Since last spring they face an array of new rivals, upstarts like Golan and Hot Telecom that compete on price.

One way the older companies are fighting back is by offering packages of mobile, landline and Internet service. The other is to market themselves as the most technologically advanced, with the fastest and most reliable service.

Partner announced yesterday that it had completed a NIS 500 million upgrade of its network this past year, making it "the most advanced in Israel: faster, innovative, accessible and ready for the transition to the next generation" of technology.

The competition wasn't slow in responding. Cellcom Israel boasted that its service as the "fastest in Israel after a NIS 100 million upgrade of the nationwide network." Pelephone, the Bezeq unit that has traditionally played up its technology assets, also proclaimed that its network has been "the fastest in Israel for surfing on smart phones and tablets in the past three years."

Logic dictates that all three veteran cell phone companies can't all be the fastest, but nevertheless all each backed their claims with figures. Pelephone, which has been waging an ad war with Partner since the latter tried to block one of its advertising campaigns, claims that a speed check it conducted in November found that among 27 websites, Pelephone reached 25 of them the fastest.

Survey cited

The company also cited a survey taken by X-per-To, a consulting company, which found that a third of Israelis believed Pelephone had the fastest network, versus 15% who thought it was Cellcom and 11% Partner. That, of course, measures consumers' perceptions, not fact, but in the competition for customers, perceptions are at least as important.

To the credit of Partner, which fired the first salvo in this media war, it has done more to make the transition for the so-called fourth generation of network services than its rivals.

Menachem Tirosh, Partner's deputy CEO for operations, said that in 2012 the company undertook an end-to-end upgrade of its network, with more than 75% of the infrastructure needed for the transition from 3G to 4G. "All of the wireless infrastructure was replaced with state-of-the-art equipment to support 4G," he said.

That spending, however, doesn't yet include the money the three companies need to invest for the frequencies and licenses needed for 4G services.

In that context, Partner conducted a survey at the end of December where it arbitrarily picked 40 locales around the country and measured Internet speeds using an iPhone5 on all three networks. It found that in the 35 locations, Partner's network was the fastest. Cellcom was tops in three and Pelephone in just two.

Over the past several years, Partner has expanded its core transmission network, so that today between 1,500 and 1,700 of its 2,700 antennae are connected to it (the rest being connected to the Bezeq network ). It is now capable of handling the company's future needs, including landline Internet and Wi-Fi.

Pelephone has thrown down the gauntlet with a personal appeal to potential subscribers and a swipe at its rival Partner. "We invite readers of TheMarker to conduct on their own a speed test and see who has the fastest network in Israel," it said. "Recall that the Second [Television] Authority rejected Partner's request to bar Pelephone's speed campaign after finding the request had no factual basis."

For its part, Cellcom says its core network is the best. "Every speed test, both those conducted by the competition and those conducted by the company, show that Cellcom has the fastest network," the company said.

"We believe that network speed is critical but not enough and so we are moving ahead to give the customer added value that will provide a total solution to home and mobile communications at attractive prices and with superior service."

YouPhone executive with a smart phone in hand.Credit: Tomer Appelbaum