however, Partner took a sharp turn and became one of Cellcom’s most zealous supporters. After all, the higher Cellcom’s market value is at the IPO, the better influence it will have on Partner’s market value. In other words, Partner wants to make sure that Cellcom’s IPO is not impaired.
Pelephone’s concerns regarding number portability are completely different. Unlike Cellcom and Partner, which provide services over GSM networks, Pelephone currently provides services over a CDMA network. Except for the limited variety of handsets it can offer its customers, Pelephone has a problem with roaming. Today, it must provide its subscribers with a GSM phone whenever they go abroad to GSM countries.
Pelephone’s board of directors recently decided to deploy a UMTS/HSUPA network ( 3.5G) during 2007. The investment is estimated at about US$200 million. This network will solve Pelephone’s roaming problems and address its ability to offer only a limited variety of handsets. Moreover, it will enable Pelephone to reduce costs, though only in the long term.
As for the short term, the deployment of the new UMTS network is not expected to be completed before the end of 2007. During this time, Pelephone will have to purchase new components for the new core network and operate two different networks simultaneously. This means heavy costs.
It was a tough decision for Pelephone’s board of directors. On one hand, the company needs the UMTS network because Pelephone must be attractive to its subscribers, especially in the face of number portability. On the other hand, executing such a complicated deployment is a difficult task even without the number portability project. Handling these two challenges simultaneously significantly increases the risks for the company.
The MoC is Playing Hardball “At the moment, all operators are violating the law since none of them are complying with the required deadline,” says Haim Geron, Senior Deputy Director General of Engineering and Licensing in the MoC. “The MoC can take two kinds of sanctions. One is a financial penalty
due to past violations in the amount of 332,000 shekels (US$80,000) plus 5,000 shekels (US$1,200) per day of continuing violation. The minister feels that this amount is negligible in the face of such serious violations. These days we are working to change the law in a way that this amount will be 12-14 million shekels (US$3-3.5 million), but the bill has not yet passed.”
Another sanction is forfeit of guarantees. Bezeq deposited (at the MoC) a bank guarantee of US$10 million, and the cellular operators deposited similar amounts. Since the forfeit is an enforcement measure, not a penalty one, the carriers should be given a chance to correct the violation. Following discussions with the carriers, the Minister of Communication agreed to determine a new deadline. The MoC is reluctant to
disclose the new deadline, but we can assume that the operators have been given a few months extension, and in any case, no later than March or April.
“The new deadline determined by the MoC is much sooner than the deadline that some of the operators said they can meet,” Geron says. “Bezeq is the most problematic one, since it claims that it can implement the number portability no sooner than the end of 2007. We believe that it can be done much sooner.”
Bezeq, HOT, and the cellular operators are not the only ones who must prepare for the number portability project. The six international calls operators – Bezeq-International, Golden-Lines, Barak, XFONE, NetVision, and Internet-Gold–must be prepared as well so they can channel incoming calls from abroad to the relevant operator. These calls are currently transferred according to the dialing code. Once number portabil-
ity is implemented, the dialing code will no longer serve as an identification tool. The international calls operators will have to identify, in real time, the operator to which they have to send the call. Therefore, they will have to have access to the databases of all cellular and landline operators.
Other operators that must be prepared for number portability are the new entrants of landline local calls. These players include the subsidiaries of Golden-Lines, GlobCall, and Cellcom. “Every operator who sends or receives phone calls must be prepared for a situation in which the subscriber is being identified by his specific phone number and not by his dialing code,” Geron explains.
Another issue is whether one operator can jeopardize the whole project. “The only operators who can jeopardize the project by not being prepared on time are the three cellular operators and Bezeq,” Geron says. “If an operator of international calls is not prepared on time, the calls will enter through its competitors. The carriers of international calls and the new players know that they can’t delay the process, and they are already prepared.”
The MoC is relying on past experience of other countries. “We have adopted models based on lessons learned in other countries regarding technology aspects as well as operational and consumer aspects,” Geron says. “For example, in certain countries, subscribers were required to pay for the transition between operators. Since experience shows that it’s a barrier, we chose a model in which the subscriber doesn’t have to pay for his right to change operators. In some countries, subscribers must inform their old operator before churning. To simplify the process, we adopted a model that requires the subscriber to inform only the new operator. And lastly, the time of transition has been shortened to a few hours from the moment the subscriber is requesting the transition to the moment he is in the new system.” V
Hadass Geyfman, our Middle East Editor, has more than 13 years of telecom and technology analyzing and reporting experience. She can be reached at hgeyfman@vonmag.com.
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