Partner Communications, Israel's
second-largest mobile phone operator, said on Tuesday LM Ericsson Israel would upgrade its existing networks and deploy its fourth-generation network in Israel.
The agreement includes the upgrade, replacement and expansion of certain parts of the company's cellular and fixed line networks and maintenance of the networks. The net amount Partner will pay for the capital expenditure and maintenance services is $100 million.
The commercial operation of the 4G network by Partner is subject to the allocation of the relevant frequencies by the Ministry of Communications.
The agreement will be effective until December 31, 2014. The replacement of the company's switches and radio equipment is scheduled to be carried out by the end of 2012.
The transaction will result in accelerated depreciation of the replaced equipment throughout the replacement period, though the main impact of the accelerated depreciation will occur in 2011 and 2012.
The value of the fixed assets that the company intends to replace minus accumulated depreciation is $40 million.
"The agreement signed will enable Partner to continue leading the technological arena in the communications market while upgrading its technological abilities and establishing the first fourth generation network in Israel," Chief Executive Yacov Gelbard said.
"The new network is intended to meet Partner's needs with respect to its cellular and fixed line networks and will bring a significant improvement and enhancement in the level of Partner's network performances."