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Cell Providers May Cut Rates

The Communications Ministry is considering forcing mobile phone providers to cut connection rates.
By Maayana Miskin
First Publish: 5/6/2010, 6:15 PM / Last Update: 5/6/2010, 9:49 PM

Flash 90

The Communications Ministry is considering forcing mobile phone providers to cut the rate they charge to connect calls to competing companies. Providers have come out against the move.

Currently, cellular providers charge 0.251 shekels a minute to allow customers to complete calls to other cellular networks. Sending a text message to another network incurs a fee of 0.025 shekels in addition to the normal texting fee.

The Communications Ministry proposal would see connection fees drop to 0.0414 shekels per minute for calls, and 0.0019 shekels for text messaging.

Communications Minister Moshe Kahlon said he hopes to reduce fees even more by 2014. Reducing fees will lead to savings for customers, and will make it easier for new providers to enter the market, he said.

As per previous government decisions, mobile providers are supposed to charge the bare minimum for connecting customers to other networks. The proposed drop in fees reflects the findings of a consulting committee that the ministry hired to determine the true cost of connecting between networks. The committee's findings indicated that providers had been charging more than was necessary to cover their costs.

Cellular phone companies say the proposal would hurt their profits. Cellcom released a statement saying the drop in fees would cost the company an estimated 25 million shekels a month, and announcing the company's intention to object to the plan.

Other companies followed Cellcom in expressing concern that the drop in rates would hurt revenue.

The companies have 30 days to respond to the government proposal. Once they have submitted their responses, the Communications Ministry will make its final decision.