News
Russian businessman teams up with partner over possible Golan Telecom deal after regulator blocks Cellcom takeover.
The presence of billionaire businessman Roman Abramovich in Tel Aviv in recent days has triggered further speculation that he is keen to purchase Golan Telecom, whose future in the Israeli mobile market is unsure after regulators objected to its acquisition by larger rival Cellcom.
The Russian’s arrival was reported by financial daily Globes, which admitted that Abramovich is a frequent visitor to the country.
However, the sighting could be noteworthy, given that the paper late last month reported that the businessman and fellow entrepreneur Oded Kobo had approached the government about a possible move for Golan Telecom.
Citing an economic affairs programme on Israel’s Channel 2, Globes said the Ministry of Communications had contacted Golan Telecom to inform it of the pair’s interest.
Golan Telecom faces an uncertain future.
It is the smallest player in Israel’s mobile market, claiming a market share of 8.5% at the end of last year, according to estimated figures published by market leader Cellcom.
Cellcom agreed to pay 1.17 billion shekels (€277 million) for 100% of Golan Telecom in November, but the deal did not find favour with regulators and in May the Ministry recommended the deal be blocked on competition grounds.
Meanwhile, Cellcom announced that it is still working with Golan Telecom to reach an agreement that would allow the smaller company to use its networks to offer services. Such a deal would also require regulatory approval though, Cellcom said.
According to Globes, operating as a mobile virtual network operator (MVNO) effectively violates the terms of Golan Telecom’s licence, therefore it might struggle to win over regulators.
The paper also quoted the telco as saying that it is appealing the Ministry of Communications’ decision on the Cellcom takeover plan.
However, given its remit to fuel competition, the Ministry would likely favour an acquisition of Golan Telecom by a third party.
Indeed, it has informed Golan Telecom that it would prefer to see it bought by Abramovich and Kobo, rather than Cellcom, the paper said.
