Partner Communications , Israel's second-largest mobile phone operator, is looking to expand its business by building a fibre-optic network to offer TV and other services, it said on Tuesday.
The company said it had submitted its plan to become a more comprehensive telecoms group to the Communications Ministry and has been conducting economic and feasibility studies for the project in the interim.
Partner and rival Cellcom, the top mobile operator, have been looking for new income streams in the wake of a mobile industry shake-up in 2012 that brought in new, low-cost competitors and led to a plunge in revenue and profit.
Partner, which has already rebranded itself this year after ending a decades-long partnership with Orange, reported first-quarter profit of 14 million shekels ($3.6 million), down from 25 million a year earlier.
Chief Executive Officer Isaac Benbenisti said the planned network would "allow the company to offer the fastest Internet services in Israel at competitive prices as well as advanced and high quality television services".
Cellcom has already launched an Internet-based on-demand TV service. Two other rivals, telecoms group Bezeq and cable company HOT, which is owned by Patrick Drahi's Altice, are building their own fibre networks.
A third planned network by state-run Israel Electric Corporation and Sweden's ViaEuropa has run into financial difficulties, and some analysts expressed scepticism about whether Partner would be able to follow through as well.
Ilanit Sherf, an analyst at the Psagot brokerage, said Partner was unlikely to go it alone given the high cost - which she estimated would be in the billions of shekels - and it could team up with either Bezeq or Israel Electric.
"Every option raises questions regarding the extent of the investment, the financing ability of Partner while its core activity - cellular - is still bleeding, and the number of years needed to reach broad deployment," she said.
Sherf also raised doubts about whether the government would be willing to help mobile firms transform into telecom groups.
Source : in.reuters.com