Cellular Chiefs Accuse State of Totalitarianism

Business barons and their envoys are exerting heavy pressure on Knesset members, Ofir Akunis, chairman of the Knesset Economics Committee, complained yesterday. His comments came during a special debate on reforming fees in the cellular market. At the close of the meeting, Akunis said the committee supports the Communications Ministry and its reform of the cellular sector.

Ofir Akunis
Emil Salman

The Economics Committee convened at the behest of MKs Yulia Shamalov Berkovich (Kadima ), Menachem Eliezer Moses (United Torah Judaism ) and Hamad Amar (Yisrael Beiteinu ).

The cell phone companies are fighting the Communications Ministry's stated intention of slashing network interconnect fees by 84%. On Sunday Shamalov Berkovich, accompanied by MK Carmel Shama (Likud ), toured the mobile-services company Partner Communications, where they met with CEO David Avner and controlling shareholder Ilan Ben-Dov. Stung by criticism, Shamalov Berkovich said yesterday that delegitimization would not stop her from meeting with whomever she thought appropriate.

The Economics Committee is not empowered to do anything about the reform: cellular fees do not fall within its purview. That said, yesterday's four-hour discussion was stormy. Envoys of the cellular companies frequently interrupted the government representatives as well as those from the communications and finance ministries.

"I'm in favor of competition," said Cellcom CEO Amos Shapira. "A million consumers switch companies every year. I can prove it." It isn't true that the cellular companies "fine" users for terminating their service packages prematurely, he added: "I provide an option for service without signing a commitment."

Shapira also denied that he objects to the introduction of a fourth player. "You decided that we object," he said. "We do object to the state subsidizing operators. I don't want the state to intervene in the way prices are set between me and operators. If a fourth operator is given frequencies for free, that's subsidization."

Avner argued that the state is "nationalizing" the sector and said transactions between companies should be made based on free will. "I can't allow you to come into my home and take a room," he said. "But I would be happy to rent you a room of my own free will."

Akunis shot back: "In a totalitarian regime, Partner wouldn't exist."

Eden Bar-Tal, director-general of the Communications Ministry, joined in rebutting the arguments made by the cellular CEOs and went on to accuse them of hypocrisy. "Avner talked about nationalization but I just remembered that I have letters from them, very aggressive ones, demanding access to Bezeq's transmission infrastructure," Bar-Tal said.

The aim is to promote competition, he said, adding: "The profitability of the cellular companies is unprecedented around the world. The former accountant-general of the Finance Ministry, who is here today, Yaron Zelekha, can confirm what I'm saying. This market shows little sign of competition." Households pay more for cellular service than business or government users, Ben-Tal said, and the differences are big, which reflects an equilibrium between the three cellular companies.

Also, the number of complaints from consumers is sky-high, Bar-Tal added, which indicates that the companies don't do a good job of prioritizing their clients. Zelekha, who Partner hired as an adviser, called the interconnect fee reform a "Syrian Scud missile that missed its target by 600 meters."