The first reduction in connectivity fees entered into force on the way to their complete cancellation

The first reduction in connectivity fees entered into force on the way to their complete cancellation in June 2025. The connection fee is a payment transferred between the communication companies when a customer of one company calls a customer of another company.

For example, if a Partner customer calls a Cellcom customer, the Partner will be obligated to transfer to Cellcom a payment for each minute of conversation between the subscribers. Until last week, the connection fees between the different cellular companies were about 6 cents per minute. For calls from a landline, the company was charged 1 penny per minute. According to the original plan, the connection fees were due at least on June 15 to about 4 cents per minute between cellular operators and 0.7 cents per minute for landline calls. In June 2024, connectivity fees are expected to drop to 2 cents between cellular operators and 0.4 for landline calls. About a year later, the connection fees are expected to be completely abolished.
However, due to the high price index this year, the price of the connection fees is lower than the original plan. Between cellular operators the rate will be 4.8 cents per minute and for landline calls the connection fee will be 0.8 cents per minute.
The connection fees created distortions in the cellular market. One of them, for example, is the content lines: numbers dialed by customers, mainly in the ultra-orthodox sector, which are used to receive various updates and news. The content creators share the connectivity fees with the phone service operators. Some of these operators even petitioned the High Court in the past against the decision of the former Communications Minister Yoaz Handel to reduce the connectivity fees.
The decision apparently has no consequences for consumers, but it affects the financial results of the telecommunications companies, with a decrease in revenues and expenses of tens of millions of shekels per quarter in a way that will not harm profitability. The reason for this is that the amount of the interconnection fee between the companies is similar, so the move will simply stop the transfer of the round payment between the companies.
Cellcom, for example, the largest cellular operator in Israel, has approximately 2.5 million cellular lines, with the average connection fee being approximately NIS 12 per month, which leads to revenues of approximately NIS 40 million per month. Also at Partner, the connection fees were about NIS 12 per customer per month, and the company has 2.7 million cellular subscribers, which reflects a decrease in revenue of NIS 32 million per month. In the Pelephone company, the connection fees in the last quarter were about NIS 15 per month per subscriber, and the company has about 2 million cellular customers, which means a decrease of NIS 30 million in revenue per month. The numbers refer to the complete cancellation of the connectivity fees that are expected only in 2025 and the latest financial reports of the companies for the first quarter of 2023.