Exphone canceles the cellular network sharing agreement with Celcom

The conflict between Exphone and Cellcom is escalating. The company announced the cancellation of the cellular network sharing agreement between the companies, in light of disputes that have arisen between the parties since Cellcom acquired Golan Telecom. Exphone, owned by Hezi Bezalel, is in advanced negotiations with Pelephone regarding network sharing.
It is not inconceivable that the road to abandonment is still long and full of legal obstacles, as Exphone and Cellcom have a signed contract until 2026. But if it materializes, Cellcom is expected to lose revenue of about NIS 100 million a year from Expon. Expon has all the options open, and it will also start negotiating with the Partner-HOT Mobile group that shares a network together and will continue to negotiate with Cellcom as well, under the pressure lever of abandonment.
Exphone signed the agreement with Cellcom during 2016 for a decade, and if it seeks to breach it, it is allegedly required to pay the rest of the payments until the end of the agreement, about NIS 600 million. Exphone insists that after Cellcom breached the partnership with the acquisition of Golan Telecom, they may also breach the contract on their part.
The business confrontation between Cellcom and Exphone stems from the addition of Golan Telecom to the partnership. About a year after signing a partnership agreement with Expon, Cellcom signed a similar agreement with Golan Telecom. The three set up a joint venture called CMG under an external CEO, Oren Gabay, who recently announced his departure. Under the agreements, the companies equally shared future investments in the network, and relative to their size shared the chain's maintenance.
 Cellcom recently completed the acquisition of Golan, which led to its withdrawal from the agreement while increasing Exphone's share in half, at a sensitive time for huge investments in Generation 5. Exphone claimed breach of contract without its consent and resented receiving no consideration for it. Cellcom has agreed to carry Golan's share on its back, but the contract between the companies has not yet been finalized in light of further disputes, such as the division between them of the deployment guarantee fee for the 5th generation tender. Shekel when merging between them.
Cellcom reported to the stock exchange that Exphone has been delaying monthly payments for the network's maintenance of about NIS 17 million for about two months. The conflict intensified, and Bezalel began to examine additional options, and is mainly examining the possibility of switching to Pelephone, which currently owns an independent cellular network. A partnership in a cellular network allows its members to share the current costs as well as future investments, such as upgrading to the 5th generation.