News
Israel’s largest mobile operator hits back at smaller player over breach of M&A and national roaming agreement.
Cellcom on Tuesday announced it has opened legal proceedings against smaller rival Golan Telecom in the wake of the network hosting deal it brokered with Hot Mobile last month.
It is not an unexpected development. The Israeli mobile operator had previously said it would consider taking Golan Telecom to court for breach of the pair’s takeover and network roaming deal.
Cellcom agreed to acquire 100% of Golan Telecom for 1.17 billion shekels (€277 million) in November last year, but it was clear from the start that regulatory approvals would be difficult to obtain, given Cellcom’s status as market leader. The takeover deal also made provision for a roaming agreement between the pair to continue.
Israel’s competition authorities did indeed block the deal, but the operators continued to work together on the network-sharing element of their partnership. However, after rumours of interest from Russian businessman Roman Abramovich, Golan Telecom announced a network deal with Hot Mobile, effectively breaking its agreement with Cellcom.
Cellcom immediately demanded ILS900 million in compensation from Golan Telecom and said it was considering its options regarding its next move.
As a result of Golan Telecom’s rejection of its notice regarding the breach of their agreement, Cellcom has "commenced legal actions against Golan Telecom, including a request for an interim injunction against the consummation of the Golan Telecom/Hot Mobile agreement," the telco said in a statement to the Tel Aviv Stock Exchange on Tuesday.
