Cellcom Launches Legal Action Against Golan in Dispute Over Deal

Cellcom initially offered to buy Golan but the deal hit a dead end this year when Israel's telecoms regulator blocked the purchase.

Cellcom shop photographed in January 2014.
Baz Ratner/Reuters

Cellcom (CEL.TA), Israel's largest mobile phone operator, said on Tuesday it had started legal action against Golan Telecom after the French-backed firm dropped out of a deal they were negotiating to team up with a rival.

Cellcom initially offered to buy Golan but the deal hit a dead end this year when Israel's telecoms regulator blocked the purchase, arguing that such a deal ran contrary to its efforts to introduce more competition to the market.

Despite that setback, Cellcom (CEL.N) has since said the parties were still negotiating a deal, subject to regulatory approval, that would allow Golan to continue to use Cellcom's networks.

As part of its license, Golan, which is owned by French businessmen Michael Golan and Xavier Niel, needed to agree to share Cellcom's network and eventually build its own.

Launched in 2012, Golan offers rock-bottom prices that competitors have struggled to meet and has taken about 10 percent of Israel's mobile market.