(Globes (Tel Aviv) Via Acquire Media NewsEdge) June 17--The struggle between Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Internet service providers (ISPs), which has been on the back burner for several weeks, has been moved forward, after Bezeq unilaterally raised its fee from ISPs for the customers it recruits from them. Some ISPs have already notified Bezeq that they will not pay the fee, and Bezeq is threatening to terminate marketing for them in response.
Bezeq has raised the fee 150% from NIS 20 per customer to NIS 50. It also announced that it will pay the same fee when ISPs bring customers to Bezeq, offsetting its own fee.
The separation between ISPs and infrastructure providers in Israel is bizarre, and one of the results is Bezeq's fee hike for ISPs and the fee it pays them. The market fee for marketers is much higher than what Bezeq charges, sometimes exceeding NIS 150.
Several years ago, Bezeq asked the Ministry of Communications for a permit to sell combined ISP-infrastructure packages. A customer can go to Bezeq's website and choose an ISP, which compete on price. This puts heavy pressure on the ISPs, because Bezeq dominates the market. Small ISPs benefit, because they do not have to possess large marketing networks, but the system is not beneficial for big ISPs, because it gives Bezeq control of the customer and they have to pay it for them.
(c)2014 the Globes (Tel Aviv, Israel)
Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp?fid=942
Distributed by MCT Information Services