Ministry of Communications cancels split internet service

Communication Minister Yoaz Hendel has completed the reform he started, and next year Bezeq Israel Telecommunication Co. Ltd. (TASE: BEZQ) and HOT Telecommunications Systems Ltd. (TASE: HOT) will be able to obtain Internet licenses. The reform canceling the split between Internet infrastructure provider and Internet service provider (ISP) has been delayed by the delay in forming a government. Hendel initiated the reform and promoted it during his first term as Minister of Communications on the understanding that the split was one of the worst problems in the internet market.

As part of the reform, Bezeq and Hot will be able to act as an ISP from March 20, 2022, in accordance with the conditions stipulated by the Ministry of Communications. The infrastructure companies will present to the ministry an agreement with the ISPs, called a “shelf agreement”. These will contain performance measures and compensation mechanisms defined and agreed in advance. The ministry will then either accept the agreement or require modifications.

This will end one of the greatest distortions in the telecommunications market, a distortion that does not exist anywhere else in the world. The purpose of the split between the infrastructure provider and the ISP was to introduce competition into the market when Bezeq was privatized in the 1990s. Services such as international calls and the Internet were ceded to its subsidiaries. , with a structural separation between them and the parent company. The result was that subscribers had to juggle two providers, not always understanding who was responsible for what.

The reform will have painful consequences as well as benefits for Bezeq. On the one hand, it will be able to provide Internet services directly to subscribers; on the other hand, the subsidiary Bezeq International, Israel’s largest ISP, will be dismantled.

For consumers, the result of the reform will be the end of the confusion and difficulty of choice that have prevailed for more than two decades. Once the reform takes effect, any player in the telecommunications market will be able to provide the Internet as a single product, and each subscriber will only have to deal with one company, and will not need to know who the ISP is. and who is the infrastructure provider.

It will be a huge advantage. Another advantage is that the mess of duplicate invoices will also end. One of the unfortunate consequences of the Internet market split is that customers end up paying to multiple ISPs at the same time without understanding what is going on with their accounts. Hundreds of thousands of customers have paid a total of hundreds of millions of shekels for an Internet service they do not use.

Posted by Globes, Israel business news – – on June 21, 2021

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