Bezeq Drops as Emerging Network Signs Customer: Tel Aviv Mover

Bezeq Israeli Telecommunication Corp. (BEZQ), the country’s largest fixed-line telecom provider, fell the most in more than a week after competitor Israel Broadband Co. signed up a customer to use its nascent fiber-optic network.

The shares of the third-best performer on the benchmark gauge this year dropped 3 percent, the most since Nov. 10, to 6.095 shekels at 2:13 p.m. in Tel Aviv. That trimmed the yearly gain to 53 percent. The TA-25 Index (TA-25) was little changed percent after reaching a record high yesterday.

IBC said businessman Rami Levy’s Hallo 015, an international call service provider, has signed an accord to use the company’s network for new service offerings when it begins operations next year. The fledgling network operator, backed by Israel Electric Corp. and Cisco Systems Inc. (CSCO), will soon announce additional agreements, according to an e-mailed statement today.

“People are starting to take the IBC threat to Bezeq more seriously,” Gilad Alper, a senior analyst for Ramat-Gan, Israel-based Excellence Nessuah Ltd., said by phone.

The company’s shares have dropped 10 percent since their yearly high on Oct. 21 amid concerns of competition in its fixed line business, which accounts for about 65 percent of revenue. Its group revenue could fall as much as 17 percent on competition in this market, Citigroup Inc. estimated last month.

Bezeq risks losing fixed-line market share, in which it holds a stake of more than 50 percent, as the government promotes the start of a wholesale market, where bulk network capacity is sold.

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

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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