(Globes (Tel Aviv) Via Acquire Media NewsEdge) June 17--Mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) will offer Internet protocol television (IPTV) services, also known as over the top television (OTT TV). The board of directors made the decision today, which realizes the carrier's strategy to become a telecommunications group
Cellcom did not disclose how it will enter the market, but it will likely involve a combination of digital terrestrial television Idan + with IPTV broadcasts. Entry into the television market is vital for Cellcom, a unit of IDB Development Corporation Ltd. (TASE:IDBD), as this is a new high risk-very low profit business. The decision will cause rival carrier, Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), to enter the IPTV market as well, which will presumably result in competition that will affect prices.
Israel's television market is controlled by Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) unit DBS Satellite Services (1998) Ltd. (YES) via satellite and Hot Telecommunication Systems Ltd. (TASE: HOT.B1) via cable. Consumer prices are high because of the lack of competition. High content costs and providers' difficulty in acquiring customers are the main obstacles to expanding competition. Cellcom believes that these problems are solvable with IDan + and IPTV.
Cellcom had previously said that it would not enter the sector until the conditions were ready. It changed its mind, albeit only declaratively and not operationally, even though landline communications and use of Bezeq and Hot's infrastructures (the wholesale market) have not been settled.
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