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Bezeq Gains on Bets Company Will Bundle Services: Tel Aviv Mover

Bezeq Israeli Telecommunication Corp. (BEZQ) gained the most in more than five weeks on bets a deal giving mobile phone companies access to the operator’s land-line network will pave the way for bundled services and cost cuts.

Shares of Israel’s biggest fixed-line provider advanced 2.2 percent, the most since Oct. 16, to 4.76 shekels at the market close in Tel Aviv, trimming the decline this year to 27 percent. The TA-25 index gained for the fourth day in five, adding 2.5 percent this week.

Tel Aviv-based Bezeq’s board approved an agreement that will allow Partner Communications Co. (PTNR), the nation’s second- biggest mobile phone provider, buy access to Bezeq’s fixed-line network that it can use to offer customers services including internet and media. Bezeq said the move may be a step toward attaining government approval to integrate its business units, enabling it to offer so-called triple play packages combining TV, internet and phone services. Bezeq now offers each of these services through separate units.

Integrating Bezeq’s businesses “will enable Bezeq to save over a billion shekels a year in costs,” Eran Jacoby, head of research at DS Securities & Investments in Tel Aviv said today by phone.

Boosting Competition

The move, which is a step toward creating a wholesale market in Israel, comes as the Communications Ministry changes regulations to increase competition in the wireless and fixed- line telecommunications industry. Bezeq shares have been third- worst performers on the TA-25 index this year, after mobile phone providers Cellcom Israel Ltd. (CEL) and Partner, as the government forced the companies to cut fees and encouraged new players to start operations. Partner shares advanced 2 percent to 23.77 shekels, the highest since May 14. Cellcom shares gained 2 percent.

Bezeq and Partner are still negotiating prices and once a detailed agreement is reached, Bezeq will publish it and allow all mobile phone companies to access its network on the same terms, it said today. The publication of a detailed agreement may lead the Antitrust Commissioner to allow Bezeq to increase its stake in its D.B.S. Satellite Services (1998) Ltd. unit, the company said.

Internet Gold-Golden Lines Ltd. (IGLD), which has a stake in Bezeq via its B Communications Ltd. (BCOM) unit, surged 6.6 percent. B Communications (BRCD), owner of a 31 percent stake in Bezeq, advanced 11 percent.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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