Israel’s telecommunications regulator orders to cut down the interconnection fees

Israel’s telecommunications regulator has ordered mobile operators to cut interconnection fees by nearly 73%.

According to Communications Minister Moshe Kahlon, interconnect fees will drop to  US$0.0181 a minute at the start of 2011 from US$ 0.066 now. Fees will turn down further to US$0.0167 per minute from 2012, to US$0.0156 from 2013 and to. Termination fees for text messaging will also fall sharply.

The decline is based on the final proposals by Nera Economic Consulting, which examined the cost pricing model of mobile network components.
According to Kahlon, reducing interconnection fees will save the public about  US$264.27 million a year, considerably lower the price of a call from landlines to mobile phones and increase competition to support the entry of new mobile companies.

According to Market leader Cellcom, the cuts would reduce its annual EBITDA next year by US$110.99 million and net profit by US$ 84.56672 million.