Photo: Shuka Cohen
צילום: שוקה כהן
Cellcom buys out Golan Telecom for NIS 1.17 billion
Competition in mobile market narrows in major industry purchase; consumer prices may rise; decreased competition may help solve infrastructure problem.
In a major shakeup of Israel's mobile communications market, Cellcom announced Thursday morning its purchase of Golan Telecom for NIS 1.17 billion.
Golan Telecom played a key role in industry reforms that led to a boom in competition and lowered prices for Israeli consumers. The company, owned by French-Israeli Michael Golan, announced that it was searching for a buyer in August due to a regulatory trap that left Golan some NIS 450 million in debt to Cellcom.
Golan Telecom founder Michael Golan. (Photo: Shuka Cohen) (צילום: שוקה כהן)
An additional communications company, HOT, passed on the possible purchase of Golan last week. Pelephone also made an offer, but lost out to Cellcom.
Cellcom currently accounts for some 28% of the mobile communications market in Israel with 2.8 million customers, making the company worth NIS 3 billion.
The high level of competition in the industry has recently raised concerns that low prices are harming company's abilities to invest in the technological infrastructure required to keep up with the pace of communications technology around the world.
The consolidation of companies is likely to inrease the cost of phone services in Israel, but may help solve the growing infrustructure problem.
