Bezeq Drops as Regulator Proposes Pricing Terms: Tel Aviv Mover
Bezeq Israeli Telecommunication Corp. (BEZQ) headed for the worst two-day decline in more than a month after saying the regulator’s pricing terms for a wholesale market will hurt earnings.
Israel’s largest fixed-line provider dropped 2.7 percent to 5.597 shekels at 12:58 p.m. in Tel Aviv, taking its two-day losses to 5.9 percent, the most since Nov. 26. The TA-25 Index (TA-25) slid 0.3 percent.
The communications ministry yesterday recommended terms for creation of the wholesale market, proposing a charge of about 50 shekels a month for communication companies and Internet providers to lease lines from Bezeq. While the regulator expects the move to enable competition and lower prices in the fixed-line market, Bezeq said the proposals will affect its results.
“We expect the market launch in the second half of 2014,” Michael Klahr, an analyst for Citigroup Inc. in Tel Aviv, said in an e-mailed note today. “We expect greater price competition in a combined ISP and Internet access product and in triple play with fixed telephony and later quad-play that includes IPTV.”
Bezeq shares have declined 17 percent since their high of 6.76 shekels on Oct. 21 amid concerns of competition in its fixed line business, which accounts for about 65 percent of revenue. The regulator is keen to lower prices for consumers through the creation of a wholesale market, where bulk network is sold, and the promotion of a competing fibre-to-home network. Israel Broadband Co. in November signed up a customer to use its fiber-optic network.
Internet Gold-Golden Lines Ltd. (IGLD), which has a stake in Bezeq via its B Communications Ltd. (BCOM) unit, dropped 5.1 percent. B Communications, owner of a 31 percent stake in Bezeq, declined 3.8 percent.
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