Mobile operator Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) wants to become a provider of long-distance calls in 2002 when the market opens to competition, Communications Ministry sources told TheMarker.com.

Partner presented its case in a letter dated August 8, at a referendum on competition in the long-distance calls market in August. The sources said that of all the responses that the ministry received, Partner's was the most determined. Partner also told the ministry that it will provide service to cellular subscribers too, regardless of whether the ministry requires that it do so.

The ministry is considering two alternatives for introducing competition to the long-distance market. One could be via general licenses, requiring the operator to provide service to anyone demanding it, without discriminating between various areas in the country. In addition, the ministry will require equity capital of $30 million per operator, as well as appropriate infrastructure of its own.

The second alternative involves special licenses for data delivery. This means that the Internet service providers will be able to acquire fiber capacity directly from fiber-optic cable company Med-1.

Meanwhile, Antitrust Commissioner Dror Strum has made clear that he will block a merger between long-distance providers Barak and Golden Lines International Communication Services unless the ministry prises open the industry to competition.

Partner sees providing long-distance service as a way to regain market share to other providers that do provide such service. It would also solve a snag involving roaming services.

When a subscriber buys a phone, he chooses his long-distance service provider. If he refuses to become affiliated with a specific provider, Partner is technically unable to provide the unaffiliated subscriber with roaming service. Providing long-distance connectivity itself would solve this problem.

Currently regulated prices of long-distance calls are not expected to significantly fall after the onset of competition, say industry sources.

Rival mobile operator Cellcom also plans to provide long-distance service, possibly through a merger with Barak. Cellcom's GPRS network, scheduled for launch in early 2002, will enable it too to provide roaming services.