HOT will receive a discount for using Bezeq infrastructure for laying out optical fibers

HOT company will receive a discount for using Bezeq infrastructure for laying out optical fibers: the Ministry of Communications published a hearing for public comments, in which it proposes to immediately reduce the use of Bezeq passive infrastructure by telecommunications companies from NIS 446 per kilometer per month to NIS 250 per kilometer per month, a reduction of approx. -44%
At the same time, the reduced price charged for access service to passive infrastructure that is in the Timretz area or that is in the infrastructure in an area beyond the Timretz area, NIS 107 per km or NIS 113 when linked to the index, will be waived.
The reduction was made with the cooperation and consent of Bezeq. It will come into effect from April 1, 2024, being the first level of reduction that will be valid until June 30, 2025, when the rates will be updated.
This is a benefit for companies like HOT, which is the main company that currently passively uses Bezeq's infrastructure: it uses Bezeq's infrastructure route, but not its own fibers. Companies that make more modest use of the Bezeq infrastructure for deployment are: Partner, IBC and Cellcom. Some companies, such as Partner, already have a discount agreement with Bezeq.
The reduction will not currently be given to providers who generate price competition in the field, such as Gilat, who use Bezeq's own fibers - a use known as active use. Also, some of the companies for whom the reduction is relevant - expected a deeper reduction. Either way, there is no guarantee that this discount will be passed on to the consumer.
Today, Bezeq is the only company that owns a physical communication infrastructure (channels, pipes, towers, poles, etc.) all over the State of Israel. Another company operating alongside it in the infrastructure is IBC, which is partially owned by the Electric Company and serves Cellcom and HOT, among others, but Bezeq has a wider deployment, so companies mainly use its infrastructure and even IBC itself uses Bezeq's infrastructure.
Bezeq has about 400,000 customers and HOT has 170,000 and the office hopes that this will encourage HOT to deploy fiber in the Bezeq infrastructure and perhaps encourage other companies to deploy fiber in this way.
According to the Ministry of Communications, "the conditions of access to Bezeq's physical infrastructure directly affect the ability and incentive of other telecommunications companies to set up independent infrastructures and compete with Bezeq in providing internet services to the public. In the current period, the State of Israel is expanding its length and breadth with advanced networks, so especially in this period it is important to reduce significantly and as quickly as possible the tariffs for the use of Bezeq's passive infrastructures. Such a reduction is expected to increase the incentive of telecommunications companies to expand the retirement of their fiber infrastructures, and to promote competition, in a way that will affect the quality of the infrastructures in Israel and the well-being of the consumer in terms of quality and price for many years to come."
In the hearing, it was written that the ministry "is currently examining the rates for supervision and support services for infrastructure works charged by Bezeq, with the aim of bringing about a significant reduction in these rates as well. The director of economics will continue this year to examine the fees for the use of the passive infrastructures and will also examine the obligation to provide BSA services (active use of bitstream access, MK) and the rates that will be applied in the provision of BSA services, with the aim of publishing a decision on this issue as well." It also states that the effect of the rates that will be set on the investment incentives regarding the BSA rates and on the competition in the market will be taken into account, especially in the long term."
CEO of Gilat Telecom, Itzik Ben Eliezer: "Unfortunately, the Ministry of Communications radically deviated from its own policy and past decisions in which it undertook to set a new wholesale price for Bezeq fiber, until August 2023, even though the work of the consulting company is on its desk. A household today pays about 75% more for fiber internet than for copper internet and this for no financial reason.
"Since the launch of fiber, Bezeq's average income per customer has increased by more than 20%, and Bezeq's income from Internet services is about NIS 400 million per year. The decision, if accepted, will lead to a continued increase in Bezeq's excess profit. The right thing was to stick to previous decisions, lower the wholesale price, and thereby encourage our ability to challenge the market with innovative and cheap value propositions that will allow for a reasonable and fair price so that every family can afford fiber internet. Unfortunately, the ministry's decision urges us to lower our marketing profile."