Nov. 10 (Bloomberg) -- Partner Communications Co. surged the most in more than 10 years in Tel Aviv after Israel’s second-largest mobile phone provider announced a network pact with the wireless unit of Hot Telecommunication System Ltd.
Shares of the carrier with the second-most subscribers, jumped 9.3 percent, the most since May 2003, to 31.68 shekels at the close in Tel Aviv. The Rosh Ha’Ayin, Israel-based company was the biggest percentage gainer on the benchmark TA-25 Index, which added 0.2 percent.
The company said it’s entered a 15-year network-sharing arrangement with cellular operator Hot Mobile for a joint venture to operate and develop a shared cellular network. Partner’s U.S. traded shares surged 8.2 percent to $8.46 on Nov. 8 on the news.
“The agreement should improve the competitive and cost position of Partner and Hot Mobile in the mid-long term,” Roni Biron, a Tel Aviv-based analyst for UBS AG, said in an e-mailed note today.
Partner’s shares were among the worst performers on the benchmark gauge last year as new wireless operators, including Hot Mobile and Golan Telecom Ltd., entered the market in May 2012. The number-two carrier, which saw profits drop in the last three quarters, is cutting jobs to reduces its costs and seeking to enter other segments to boost revenue, Chief Executive Officer Haim Romano said Aug. 14.
The accord was praised by the Minister of Communications Gilad Erdan as benefiting consumers and ensuring carriers make “full use of the radio spectrum,” according to a text message sent to journalists.
Scailex Corp. surged 22 percent to 5.182 shekels, the highest since April 9. The company has a 15.7 percent stake in Partner, according to data compiled by Bloomberg.
The news is a “potential negative” for Bezeq, Biron said, as Hot Mobile currently has a hosting agreement with its Pelephone Communications Ltd. unit which expires at the end of 2014.
“Hot may shift to Partner earlier,” Biron wrote. Pelephone’s current hosting agreement with Hot Mobile is estimated to contribute around 200 million shekels a year in revenues, “mostly incremental to the bottom line”.
Bezeq Israeli Telecommunication Corp.’s shares declined 4.7%, the most since Oct. 23, to 6.185 shekels, making them the worst performers on the Tel Aviv gauge. Internet Gold-Golden Lines Ltd., which has a stake in Bezeq via its B Communications Ltd. unit, dropped 7.8 percent. B Communications, owner of a 31 percent stake in Bezeq, fell 5.9 percent.
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