Israel’s Regulator Told To Block Bezeq and HOT’s Merger

Israel’s government has advised the country’s regulator to block Bezeq Israel Telecom’s proposal to combine its fixed infrastructure unit with its mobile, internet, and TV operations.

Reuters reported that a government committee made the same recommendation regarding the merger plans of cable firm HOT, which is controlled by Altice Europe. In both instances, the panel advised against allowing the mergers due to the market dominance of the firms in question.

Despite this, the committee noted that “in light of the changes in the market,” Communications Minister Yoaz Hendel may wish to reconsider such actions in the future. The ministry has denied Bezeq’s request in the past in a bid to encourage smaller firms such as Cellcom and Partner Communications.

Bezeq is the largest operator in Israel, and owns a nationwide copper network. It argues that folding its landline operation into its three other units would allow it to reduce costs and thereby provide lower tariffs for subscribers.

However, the government committee countered that Bezeq’s “significant market power and dominance in the telecoms sector” meant that structural separation was still required to allow fair competition. It did note that it could potentially permit a smaller scale merger between ISP Bezeq International, mobile operator Pelephone, and TV provider YES.

Similarly, while it advised against allowing a full merger of HOT’s units, the panel advocated considering whether the company should be permitted to merge its cable infrastructure and internet companies.

Full Content: Developing Telecoms

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