The newly-installed management of Pele-Phone Communications believes the mobile communications company should forgo relations with Virgin Mobile, TheMarker.com has learned.
Under newly appointed chief executive Jacob Gelbard and deputy Gil Sharon, Pele-Phone's management feels that launching a new brand-name for Pele-Phone itself, while building a business relationship with Virgin as a "virtual operator" using the Pele-Phone network, will create too many problems.
The Virgin brand would cut into the new Pele-Phone brand, the balky managers feel. They will be recommending to the board of directors that Pele-Phone resolve against letting the deal go forward.
Pele-Phone's board will begin debating the issue next week. A decision should be reached in about two weeks.
Pele-Phone shareholders, the Bezeq phone company and the Disney-controlled Shamrock group, have not offered an opinion yet. But they are known to be deliberating whether the $50 million investment needed for the venture with Virgin is worth it.
The shareholders may elect not to spar with the Pele-Phone's new management. Firm opposition from Gelbard could be a deciding factor for the shareholders.
On the other hand, Virgin and another partner in the virtual-network venture, Poalim Investment, are determined to bring the British company's brand to Israel.
"We brought Virgin to Israel and that won't change," Poalim chairman Avigdor Kelner told TheMarker.com. "We await Pele-Phone's decision." If not with the Bezeq subsidiary, Virgin could theoretically operate over another company's network.
Israel has three mobile communications providers: Pele-Phone, Partner Communications (Nasdaq, TASE: PTNR, LSE:PCCD) and Cellcom.
Pele-Phone refused to comment.