Two Cell Phone Operators Eye Foray Into Television

Partner, Cellcom may offer NIS 90-a-month service.

After years of no competition, the revolution in the cellular industry has shaken up the entire communications sector. The next business to change radically will be the multichannel television industry, which has only two players: cable company HOT and satellite broadcaster Yes.

Cellular operator Partner is looking to fight back against the new competition in its home sector. This fall it will offer multichannel TV at the bargain price of NIS 90 a month, the same price HOT will charge a month for its new unlimited cellular service launched last week.

Cellcom is also considering entering the television business. It's as if the two big cellular firms are telling HOT: "You broke open the cellular market, now we'll destroy your television business."

This will mark the end of clearly defined - and uncompetitive - business segments in the telecommunications industry. Cellcom, Partner, Bezeq and HOT will soon operate in all areas of the industry, and Israelis will see a much broader range of services - and much lower prices.

Cellcom is the furthest along toward launching its television services; it's expected to go live in October. Partner will follow close behind. As for Pelephone, its parent Bezeq is also the controlling owner of Yes, so it's still unclear if the two sister companies will compete. In any case, Pelephone is far behind in preparing for the television business.

Senior executives at Partner and entrepreneur Dov Moran hosted Communications Ministry officials yesterday and described their progress in the IPTV sector - television broadcasting over the Internet. Communications Minister Moshe Kahlon attended the session, as did his director general, Eden Bar Tal. Partner CEO Haim Romano was also present.

Partner said it planned to offer similar programming as HOT and Yes for between NIS 80 and NIS 90 a month, about 30% of what subscribers now pay HOT and Yes for similar packages. HOT had average revenues per subscriber of NIS 215 a month (not including VAT ) for cable in 2011, and had 819,000 subscribers. Yes averaged NIS 237 per month per customer and had 585,000 subscribers.

Partner's basic package is expected to include the main foreign channels that HOT and Yes offer, alongside free access to thousands of hours of video on demand, including movies and television shows. Cellcom's offering is still unknown, but the company has signed an agreement to buy programs from British content provider ODT, which represents a long list of studios.

The new IPTV services will also be available on computers, smartphones and tablet computers. Partner is still trying out two different technologies from two companies, including Moran's Comigo platform.

"I have more good news for consumers," Communications Minister Moshe Kahlon told a conference yesterday. "Today, Dov Moran and Partner showed us a converter box for television that will allow watching 50 channels over the Internet for NIS 80 to NIS 90 a month," Kahlon said. "That's how we'll say goodbye to the NIS 350 that we pay [a month] to HOT and Yes."

In response to a question from the audience on the effects of such competition on the companies' share prices, Kahlon said: "They tell me I need to worry about the companies' financial stability, but I say we need to worry about consumers' financial strength."