By Tova Cohen
Israeli mobile phone operator Pele-Phone Communications has decided not participate in a joint venture with Virgin Mobile and Tel Aviv-listed Hapoalim Communications to operate a virtual cellular network in Israel, Hapoalim Communications said on Monday.
In April the companies said they were in talks to set up a joint venture, in which Virgin would use Pelephone's CDMA mobile network but operate under its own brand.
A spokeswoman for Pele-Phone said its decision was a result of a change in the company's strategy.
"Pele-Phone wanted to create a new brand to appeal to younger users and this is Virgin's strong point. Now Pele-Phone has decided that building a new brand is not in line with the new strategy that the company is formulating," she said.
A source at Hapoalim Communications said Virgin had not ruled out a joint venture with one of Israel's other cellular operators but added that no negotiations were underway.
Virgin Mobile, Britain's fifth largest mobile phone network, is a virtual mobile operator that sells services under its own name but uses capacity on other companies' networks. It is a joint venture between the Virgin Group and Deutsche Telekom's U.K. mobile unit One2One.
Pelephone is owned by state-controlled Bezeq and the Disney family investment group Shamrock Holdings.