Golan Telecom fined NIS 31 million for licence violations
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Golan Telecom fined NIS 31 million for licence violations

Company failed to honor obligations to set up own cellular network, says Communications Ministry

A woman walks next to an advertisement  for Golan Telecom in Jerusalem on November 05, 2015. Photo by Lior Mizrahi/Flash90
A woman walks next to an advertisement for Golan Telecom in Jerusalem on November 05, 2015. Photo by Lior Mizrahi/Flash90

The Communications Ministry on Tuesday slapped a 31-million-shekel ($8.2 million) fine on the troubled cellular company Golan Telecom for breaking the terms of its licensing agreement.

The money will be taken off guarantees deposited with the ministry by the company.

Golan Telecom plans to appeal, Channel 10 reported.

Golan Telecom, established in 2012, was the fifth operator to enter Israel’s mobile communications market, offering fixed-price packages that were far cheaper than the competition.

But after the fanfare with which it burst onto the Israeli cellular scene, it has had a rocky ride.

The company was supposed to install its own infrastructure. However the Communications Ministry said, Golan began instead to dismantle without permission the network it started building up in early January 2015. It took down more than 600 cellular antennas, leaving just 196, of which 166 were active, Channel 10 said.

The company said the annual NIS 90 million ($23 million) cost of maintaining the infrastructure was prohibitive.

Golan Telecom CEO Michael Golan addresses a conference about the Israeli cellular telephone industry, May 2014 (screen capture: YouTube)
Golan Telecom CEO Michael Golan addresses a conference about the Israeli cellular telephone industry, May 2014 (screen capture: YouTube)

But company founder Michael Golan also blamed the failure to establish a network on the government and on members of the public who fought to prevent the introduction of more antennas.

Last November, Israeli cellular company Cellcom announced it was going to buy Golan Telecom for NIS 1.17 million ($300 million). But the move, opposed by both Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon at the time, hit a brick wall when anti-trust regulators rejected it in April.

That month, some 14,000 subscribers left Golan, Haaretz reported at the time, and the 77-store Bug computer chain stopped acting as Golan’s retail representative.

In the industry’s dog-eat-dog atmosphere, Cellcom launched legal action action against Golan Telecom, Reuters reported reported in July, for dropping out of negotiations and entering talks with rival provider HOT.

Partner Communications meanwhile petitioned the Supreme Court against the Communications Ministry for its alleged failure to force Golan Telecom to honor its licence obligations and to punish it for license violations, Globes reported on Sunday.

The court accepted a pledge by the state to publish its decision on punitive measures against Golan by the end of the month.

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