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Communications service fees, including cable television, international calls, and cellular communications, could rise by 5% in the coming half year, market sources estimate.

The expected rise is due to the eroded financial strength of communications companies, their exposure to the dollar, and the reciprocal effect of one communications market on another.

The estimates are based on the shekel devaluating by 5% to 7% in the first quarter, to trade at NIS 4.5 to NIS 4.6 against the dollar.

Barak International Communications has already raised its fees by 4.7%. The firm has a hefty dollar-linked debt, $170 million in bonds at over 20% yield on redemption. The sources estimate that international calls providers Bezeq International and Golden Channels will raise their fees by a similar rate.

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The cable television companies and satellite television firm YES have dollar exposure due to content acquisition. The sources estimate that these companies will raise fees by 5% due to shekel devaluation.

Communications Ministry Director General Ori Olenik has recently said that the ministry expects that this year prices of multi-channel television will rise. Local multi-channel television firms each spend some $100 million annually on the acquisition of content and services from overseas. Their dollar exposure is increasing given the rising prices of content.

Subscriber fees of cellular communications providers in 2001 were stable, undergoing erosion in real terms. Given this and the weakness of the shekel, this market is expected not to miss the opportunity to raise prices.