Israeli operators Cellcom and HOT have spoken to ICT minister Gilad Erdan about connectivity fees for the fixed line sector, Globes reported. The two operators presented different positions, with Cellcom claiming that the rate should be much lower than the ILS 0.99 per minute set by the ICT ministry, while HOT believes that the rate should be higher. Hot says there were errors in the work by the consultancy firm which calculated the price for the ministry.

Cellcom showed the minister a study it carried out, which shows that the cost of building a new network results in a connectivity fee of ILS 0.20 per minute. The current fixed-line connectivity fee is ILS 0.4 on average, Cellcom says that Bezeq is an inefficient network, because it was built over the years as a telephony company, not as an internet company. Since traffic on Bezeq’s network is now mainly internet-based, Bezeq’s costs should be calculated as if a new fixed-line network for internet access was being built. Bezeq should be able to operate with half its current number of cabinets.

Hot said a capital price that is too low encourages competitors to use Bezeq and Hot’s fixed-line networks without giving them an incentive to expand their investments. Hot counters that the capital price set in the connectivity fee study includes errors that are rectifiable. Hot said that errors, such as the fixed tax rate in Israel, are wrong, HOT said that a high capital price was good for investment, but it realised that the price could not be too high, as it would be a barrier to competitors entering the market. This would result in too high an entry price for competitors.