Government Mulls Plan for Cutting Bezeq Phone Rates

Hearings due on reversal of long-standing policy by Communications Ministry

Bezeq Israeli Telecommunication Corp. headquarters in Tel Aviv, Israel.
Bloomberg

Israel’s Communications Ministry is about to reverse a years-old policy of barring Bezeq from cutting rates for landline telephone service.

In the next few days the ministry is expected to announce hearings about its new strategy, which calls for lowering rates and for defining them as a ceiling, leaving Bezeq free to charge even less.

Officials are weighing several alterative packages. One would be a flat 50 shekel ($1.75) a month fee for 300 minutes, which would mark a 17% reduction from current offerings. Given Bezeq’s current steep rates, which earn it 60 agorot for each shekel of revenue – consumer groups are likely to press for bigger rate reductions.

The hearings will also discuss a mechanism officials plan to use to prevent Bezeq from exploiting the rate ceiling to undercut the competition. Under the proposed guidelines, the price of wholesale phone lines, which Bezeq sells to rivals like Cellcom Israel so they can offer landline service, would be tied to the retail rate set for subscribers.