Bezeq’s optical fiber launch faces obstacles

The Internet market in Israel is at a dangerous turning point. As reported last week, Israeli telecommunications company Bezeq Ltd. (TASE: BEZQ) is set to launch the optical fiber project soon, providing a much faster internet than most households in Israel know. Bezeq has been sitting on the fence for a long time. Despite the fact that the infrastructure was ready, the company decided to play for time and use its new network as a bargaining chip to gain regulatory relaxation from the Ministry of Communications. What made it finally decide to start, what obstacles awaited it, how much will the service cost, and how will it affect the Israeli telecom market? Expected speeds, and why now, Bezeq informed ISPs last week of its intention to launch the project, and mentioned the speeds that will be available. The idea was to enable ISPs to prepare and offer browsing rates in new packages: 600 Mbps and 1 Gbps, which is much faster than the best 100 Mbps speed Bezeq currently offers. This notification came within the framework of its obligations under the Ministry of Communications’ wholesale market policy to allow all competitors of Bezeq to use its network, including the optical fiber network, which the ministry requested to publish. Regarding the price, it is difficult to assess what will happen, but the expectation is that it will be higher than the price of the current Bezeq service. In terms of timing, Bezeq waited for the project to launch because it wanted to wait to see what would happen at the Ministry of Communications hearing on canceling the mandatory split in the market between the infrastructure provider and the service provider. . Once I understood that there was no opportunity to gain approval to provide the service directly to subscribers rather than external ISPs, I announced the launch. The announcement was not coordinated with the Ministry of Communications. Bezeq believed that it was not obligated to give a three-month notice to ISPs for the new service under the wholesale market policy. Reactions were not late, and as soon as the announcement was announced, ISPs turned to the Ministry of Communications and demanded that Bezeq be delayed and obligated to adhere to the rules of the wholesale market. Small ISPs Are Not Fast To Collaborate What lies behind ISPs’ demand? They claim that they need time to prepare; For example, to buy routers that support high speeds. From a purely legal standpoint, they might be right. Bezeq would have done better if it had given longer notice of its intention to officially launch the fiber optic network. However, it is by no means clear that the optical fiber network is the whole story. Everyone in the market knew that Bezeq would launch the project. The ISPs were not surprised. The goal was to gain time and delay Bezeq. Related articles Bezeq to launch a fiber optic project within two weeks The claim about the need for preparedness is questionable. Internet service providers who want to provide their customers with service via optical fiber cables can already do so through IBC. Moreover, Cellcom Israel Ltd. (NYSE: CEL; TASE: CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) has already supplied hundreds of thousands of households with fiber-optic cable in the Bezeq launch, and if there is a problem, why can’t it be solved on the go? It will be several weeks before Bezeq starts implementing the project, and it cannot sell anything without infrastructure packages and shared services. One way to solve the problem – which, as mentioned, may not really exist anyway – is to allow Bezeq to loan out routers to ISPs who don’t own them. The problem is not expected to arise with Cellcom and Partner, which sells routers on their standalone networks. The Ministry of Communications remains silent, and where is the Ministry of Communications in this battle? Presumably, the director general of the ministry, Liran Avisar bin Hourin, does not like trying to stop Bezeq. She was very happy last week when Bezeq announced the launch, and she considers it the pinnacle of her career in the ministry. However, for now she is staying silent. There are those in the ministry who think that it should be tough on Bezeq, and they believe that it will be the start of a slippery slope if Bezeq is allowed to launch its new network without controls. From a legal point of view, it might be the case that if an ISP goes to court and demands a halt to the launch, the ministry will have a problem. Sources in the Ministry of Communications said that the matter is under discussion. Posted by Globes, Israel business news – en.globes.co.il – on March 1, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021