The new agreement will be based on the

Communications Ministry’s policy statement.

The ink is not yet dry on Friday’s policy statement by the Ministry of Communications, and mobile carriers Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Pelephone Communications Ltd. have opened talks on a new network sharing agreement that will be submitted to the ministry and the Antitrust Authority for approval.

The new agreement will be based on the Ministry of Communications’ policy statement, which states that it is prepared to consider full network sharing between the carriers, except for sharing frequencies. Network sharing does not distinguish between 2G, 3G, and 4G, and therefore creates an opportunity for major restructuring in the mobile industry.

Sources inform ”Globes” that, shortly after the policy statement was published, Pelephone and Cellcom initiated contact on a new agreement that they will submit for approval. The policy statement basically confirmed what was already known – that the Ministry of Communications plans to go for the model of three networks, and that there was no chance of permitting Cellcom and Pelephone to share frequencies. The document clarified the degree of sharing allowed, except for the frequencies.

The policy statement explicitly states that the carriers can share all network components except for frequencies. This means that they can greatly reduce the number of sites for all technologies, not just 4G, theoretically saving hundreds or even thousands of antennas nationwide, something that is personally important for Minister of Communications Gilad Erdan.

The policy statement allows many areas of sharing by the carriers. In general, they can divide Israel into two, promising each other roaming. Alternatively, they can optimize antennas and make new plans for deploying antennas and sharing costs.

Most importantly, the ministry has given the carriers an opportunity for huge savings. The only question is whether the Antitrust Authority sees eye to eye with the Ministry of Communications about this policy. The Antitrust Authority has always been less enthusiastic about network sharing, and if it thinks that the Ministry of Communications has gone too far, then the ministry’s position statement is irrelevant because the Antitrust Authority, as an independent agency, has its own considerations.