By Hadar Horesh

Eurocom Communications, one of the largest private investment groups in Israel, has canceled plans to invest NIS 400 million in new hi-tech and telecom ventures.

In November, Eurocom announced plans to establish three new investment partnerships. But the depressed state of the hi-tech and telecom sector, and greater-than-expected financing costs for its communications endeavor Ofek The New World and the Yes satellite TV broadcasting company have forced Eurocom to re-evaluate its investment plans.

Among other steps, it has suspended plans to acquire an additional 12% of Yes from

Gilat Satellite Networks

(Nasdaq:GILTF).

Eurocom is controlled by the Elovitch brothers Shaul and Yossi (51%) and Arison Investment (49%).

Its main source of revenues is Eurocom Nokia, which holds exclusive rights to market Nokia cellular devices in Israel. These Nokia devices account for about half of the local cell phone market.

Nearly all of Eurocom's other ventures have been operating in the red.

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Partner Communications

(Nasdaq, LSE:PTNR), a cellular operator using the Orange trademark, lost 10 times that much.

Eurocom owns 32% of Yes, which lost NIS 270 million in 2000 and is expected to lose about NIS 300 million this year.

Eurocom's largest and most ambitious project is Ofek, which it launched to compete with the incumbent phone monopoly Bezeq in the domestic telecommunications market. Some NIS 2 billion has already been invested in Ofek, but no strategic partner has yet signed on. Talks have been held with

Nortel

(NYSE:NT), but the Canadian telecom giant is likely to finance only a small part of the project.

The Eurocom group owns a 6% share of Partner, a member of the international Orange network of cellular providers. Other investments include Tucows.com, a U.S.-Canadian Web site that allows free downloading of a range of products, and the CAP Ventures investment company.