Israeli Operators Required to Offer Benefits to Existing Handset Owners

Israel's Ministry of Communications has ruled that customers who buy their mobile phone from a 3rd party supplier should be entailed to the same operator benefits as customers who buy their handsets from approved suppliers.

Minister of Communications Moshe Kahalon "As a result of this decision, customers will be able to transition from company to another with their devices and still enjoy benefits like airtime credit"

The Ministry found that the companies tend to bind the purchase of mobile device with the purchase of mobile services. Thus, subscribers joining any mobile network (or upgrading their currently owned devices) usually acquire their devices as part of the contract with the mobile operator, and enjoy a continuing fixed discount in the monthly phone bill, with the discount rate being derived from the scope of airtime consumption by the subscriber.

The Ministry has issued two hearings on the issue, in the end of which, Director General Mr. Eden Bar-Tal informed mobile operators of his decision.

Mobile operators must remove the link between the sale of a mobile device by the operator and the provision of benefits in mobile services, so that subscribers, who purchase their devices from other suppliers, are entitled to the same terms and benefits, including monetary credit or any other benefit resulting from the consumption of airtime or services.

Director General Mr. Eden Bar-Tal: "This is yet another step forward under the policy of the Ministry and the Minister to increase the competition and benefit the consumers. The Ministry is working on further steps and decisions serving this goal, including diminishing barriers on the provision of mobile applications not originating from the operators ('the closed garden') and more".

The amendment of the mobile operator's licenses will start to apply on November 1, 2009.

Posted to the site on 10th August 2009