Communications Ministry Director-General Shlomo Filber on Monday sought to clarify “inaccurate” statements attributed to him during a recent interview, in which he said that competition and deregulation in Israel’s mobile telecommunications industry had over-saturated the market.
In an interview with Bloomberg published earlier in the day, Filber was quoted as saying that Israelis have too many service providers to choose from and that monthly cellphone bills are too low.
“The market has lost its correct balance regarding price,” Filber told the website. Low profits put at risk “the ability of companies to keep up with technology and maintain and develop infrastructures,” he said.
Hours after the story was published, Filber released a statement calling the quotes attributed to him “inaccurate,” and said that while he believes prices in the mobile phone market are too low, he does not think it is a regulatory issue, and it will be dealt with by market forces.
“The prices in the country are lower than needed,” he wrote in his clarification. “For the sake of comparison, in Europe they’re 20 euros [a month per phone line].” He added: “We should aim for that level,” according to Bloomberg.
“The prices in the market are determined through free competition, and I don’t decide what they will be,” Filber added.
The Bloomberg piece indicated that Filber’s stance was a departure from that of some of his ministry predecessors who led reforms that introduced new market players and a radical reduction in prices. It also implied that regulatory moves to correct the prices could be in the offing.
Filber is relatively new in the position and was appointed in June by Prime Minister Benjamin Netanyahu, who acts as communications minister.
Israel’s veteran providers, Cellcom and Partner, have lost billions in revenue as previous communications ministers encouraged the entry of virtual operators – mobile providers who do not have their own network of antennas and station and instead lease these services from one of the existing companies.
Those previous ministers include Moshe Kahlon, the current finance minister and Kulanu chairman, who was elected on the popularity of his mobile reform when he served in Likud as communications minister in a previous Netanyahu government.
Two months ago, Cellcom said it was considering buying out Golan Telecom, a company that was among the first to shake up the Israeli market with its introduction of a fixed-price, no frills package.
Filber told Bloomberg he had no objection to reducing the five major network operators, including the Bezeq landline company’s cellular unit, to four.
“I don’t see a problem with Cellcom, Partner or Bezeq buying Golan if they want,” Filber said. “The market will continue to be competitive even with four main players and other niche players, with rational prices that will enable reasonable profitability and infrastructure investment,” he told Bloomberg.