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Eurocom, Cellcom sign accord to establish joint communications venture

Joint firm will compete in domestic communications with the Bezeq phone monopoly

The Eurocom communications group and mobile communications company Cellcom yesterday signed an agreement to cooperate in competing with the state-run monopolistic phone company Bezeq in wireline communications.

The agreement to establish a joint venture was initialed by attorneys representing Eurocom and Cellcom, after about a year of negotiations.

The JV will contend against Bezeq in government tenders to provide domestic communications.

The agreement is subject to due diligence of Eurocom's subsidiary Ofek The New World by Cellcom, and to various permissions of the Communications Ministry and Antitrust Authority.

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Cellcom sources estimate that the due diligence process can be completed within a few weeks.

Cellcom president Jacob Perry commented that competition will benefit not only Israel's consumers, but even Bezeq itself.

The talks between Eurocom and Cellcom had dragged out and snagged on several obstacles throughout. BellSouth, a key shareholder in Cellcom, had objected to key clauses in the proposed agreement covering the joint venture. Cellcom shareholders had reportedly complained about Eurocom entertaining an inflated view of real size, and status in the joint venture.