Bezeq: Interconnect fee cut won't hurt results much
Telecoms group says government plan to slash fees fixed-line operators charge each other to connect calls will have minimal impact on its financial results
Last week, the Communications Ministry recommended a 70% cut in such interconnect fees to NIS 0.0104 from an average of NIS 0.035 in a bid to encourage competition in the sector and further bring down costs of telecoms services.
"The company estimates that the reduction of the fee as stated will not significantly harm the group's annual results," Bezeq said in a statement to the Tel Aviv Stock Exchange, adding that much depended on the date the new fees go into effect.
It said that cost cutting measures at the company and its units in this sector will offset the loss of revenue.
The proposed fee cut will also impact revenue at its chief competitor, cable company HOT.
A similar reduction at the start of 2011 for mobile phone operators – including Bezeq unit Pelephone, Israel's third-largest cellular provider – led to a steep drop in revenue and profit.
In 2012, the ministry allowed the entry of six new operators that further harmed the incumbents since a price war has emerged.
