Cellcom climbs most in two years following new telecom regulations

Cellcom Israel Ltd., the nation’s largest cellphone provider, rose the most in almost two years on Wednesday after a report the government may bar Hot Telecommunication System Ltd. from offering a services package.

Cellcom shares advanced 5.8 percent, the biggest gain since May 2010, to NIS 45.96 at the 4:30 p.m. close in Tel Aviv.

Hot, the nation’s second-largest fixed-line operator, dropped 4.9% to NIS 40.19. Partner Communications Co., the second-largest cellphone operator, climbed 2.5% to NIS 27.53, the highest level since April 3.

The Communications Ministry is set to publish its plans for the fixed- line telecommunications sector and may bar Hot’s services packages, Globes reported Wednesday, without saying how it got the information. Yechiel Shabi, a spokesman for the ministry, declined to comment. Hot’s “tripleplay” package may be affected by the policy, the paper reported. Triple play refers to a service offering including Internet, television and telephone.

“The cancellation of Hot’s tripleplay package is very positive for Cellcom and Partner as they want to go into fixed and broadband and can’t compete on television content,” said David Kaplan, a Tel Aviv-based analyst at Barclays Capital.

Cellcom and Partner shares have been the worst performers in the TA25 benchmark index in the past 12 months, down more than 56%, as Prime Minister Binyamin Netanyahu’s government forces telecom providers to cut fees while encouraging new players to enter cellular and fixed-line markets.

The Communications Ministry on Tuesday announced a new policy for the wholesale telecommunications market that will allow newcomers to buy space on networks owned by existing companies, such as Bezeq Israeli Telecommunication Corp. The rules also set a date to cancel the state-enforced structural division on Bezeq and eliminate government price supervision.

“The potential opening of the fixedline market to competition will benefit cellular operators who will be able to more quickly compete for market share in the segment and diversify their revenue generation,” said Zach Herzog, an equity sales trader at Tel Aviv-based Psagot Investment House Ltd.

Discount Investment Corp. which has a 47.04% stake in Cellcom according to data compiled by Bloomberg, advanced 5.4%, the most since March 18, to NIS 20.61.

Bezeq advanced the most in 17 years Tuesday on speculation the new government policy will allow Israel’s biggest fixed-line phone company to integrate its units and cut costs. Bezeq traded 0.5% higher on Wednesday at NIS 6.3. (Bloomberg)