Israeli firms agree network sharing deal

Israeli mobile operators Cellcom, Pelephone and Golan Telecom have announced a 15-year agreement to construct and operate a shared LTE radio network. In addition, Cellcom and Pelephone have agreed to share the passive elements of cell sites for existing networks while the former has also granted Golan Telecom the right to use its 2G and 3G radio network.

Cellcom is Israel’s market leading operator with 3.1 million subscribers as of September 2013, according to Informa’s WCIS Plus. It is trailed by Partner Communications and Pelephone, with 2.9 million and 2.7 million subscribers respectively. MIRS Communications Israel is in fourth place with 323,000 subscribers

In early 2012, Golan Telecom became the fifth operator to enter the market and now claims 380,000 subscribers on its network to date. The operator had already signed a nationwide roaming agreement with Cellcom in order to supplement its coverage while it continues building its own network.

The three operators said they will even cooperate in obtaining frequencies for the LTE network. Each operator will be required to purchase and operate its own core network, the operators added. The shared LTE network is to be constructed and operated by a separate, newly created entity that will be equally owned by Cellcom and Pelephone and overseen by a committee comprised of representatives of all three operators. The committee will make strategic decisions regarding the LTE network by majority vote. Costs shall generally be divided equally among the three operators, subject to conditions set in the agreement, they added.

“The Israeli cellular market will face continued challenges in the coming years to deliver the demand growth for cellular data,” said Nir Sztern, Cellcom CEO. “The agreements will enable multiple players the ability to compete and offer cutting edge services while investing in infrastructure. The network sharing agreements will help reduce the number of cell sites and the reduced cost will help maintain competition to the benefit of the Israeli consumer.”

Cellcom’s Indefeasible Right of Use (IRU) agreement with Golan Telecom, grants the latter a right to use Cellcom’s 2G and 3G radio network for at least five years. Sztern added: “”We are very pleased that Golan has elected to continue its cooperation with Cellcom. It is a vote of confidence in the company’s quality service, of which Golan has benefited, from the date it has commenced its operations.”

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