Partner wil purchase the right to use 120,000 Bezeq fiber optic lines for NIS 574 million

"Partner" reported that it signed an agreement with Bezeq to purchase the right to use 120,000 Bezeq fiber optic infrastructure lines for NIS 574 million for a 15-year contract.
The agreement will allow the partner to be the provider of fiber services with the widest deployment in Israel, so that it can offer service to most households, even in places where it is not expected to reach with its independent fiber infrastructure, thus strengthening competition in these areas for the benefit of consumers.
Partner will be able to significantly increase the number of the company's fiber subscribers, which according to the latest report stands at approximately 277,000 customers - the highest number in the market, out of approximately 929,000 households to which the Partner Fiber infrastructure reaches.
The IRU agreement (irrevocable self-use right) was signed for a fixed period of 15 years, with an extension option for two additional periods of five years each (for a total of 25 years), with lower line costs than in the first agreement period. In addition, the company was given an option to purchase the right to use 48 thousand additional lines, under the same conditions, during the first period of the agreement. Also, the agreement contains a mechanism for upgrading the rates of the lines.
The right to use the lines will be granted in five equal annual pulses, meaning 24 thousand lines per year, starting on January 1, 2023. The total consideration to be paid by Partner to Bezeq amounts to approximately NIS 574 million plus VAT for the first agreement period, which will be divided into five equal payments (depending on the dates of the pulses) , to be paid at the beginning of each calendar year in 2023-2027.
In addition, the company will pay annual maintenance fees at a rate of 4% of the proceeds. The terms of the deal include a payment deployment mechanism as well as linking mechanisms. In addition, the partner has the option of bringing forward the deadlines for both the right to use the lines and the payment for them. So, as far as Bezeq is concerned, it is expected to benefit from revenues of about one billion shekels.

Avi Gabbai, CEO of the Partner Group, said: "The transaction gives Partner the possibility to reach our television and internet customers faster with optical fibers in general. The current deal is the second phase of Partner's fiber strategy; The first phase focused on the quick and initial deployment and the goal of the second phase is to reach every household in Israel."
Gil Sharon, Chairman of the Bezeq Group, stated that "the IRU agreement we signed with Partner will bring consumer welfare in the form of greater competition, both in terms of price and service, and will enable accelerated growth of fiber penetration and customer connection across the country. For Bezeq, it provides greater certainty in the use of its fiber network. The Ministry of Communications as a policy outline, and the companies as the executing agency, will meet the task of extensive deployment of optical fibers, while competing between three infrastructures. As of today, the rate of fiber deployment in Israel is very high compared internationally. The fiber accessibility rate will reach 70% of households by the end of 2022, and by the end of 2024 the fiber accessibility rate will be almost 100%."
Sharon further added that "the IRU agreement makes it easier for the service provider to market fiber connections, and will allow for improved offers to customers, when competition in the supply of fiber connection services will increase. In the deal we signed, there is a balance between a price that is lower than the wholesale market price today, and the amount of connections that will increase and with it the utilization and efficiency of the network, And it reflects Bezeq's proactive approach to leading business moves that will ensure increased use of its fiber network over time."