Israel's Communications Ministry today published a tender calling for bids on new cellular frequencies for 3G services and a fifth cellular telephone provider.

The minimum bid price for the spectrum is $100 million. The final date for submitting offers is July 17, 2001.

The minimum bid price was determined by calculating how much it will cost to displace the Defense Ministry and the Israeli Army who are currently utilizing the frequencies now on the auction block. Some of the frequencies will only become available in 2004 or 2005. Winning the frequency tender is advantageous to cellular carriers looking to expand their services to eventually include broadband cellular Internet access.

But market watchers believe that a fifth cellular operator stands a very slim chance of penetrating Israel's already saturated cell phone market. Although the Communications Ministry announced its intention to introduce a new cellular provider one year ago, the industry has largely ignored the news.

On Monday, February 5th, 2001, Israel's Communication Minister finally granted a cellular license to the MIRS company, which had applied five years and one day ago. An independent assessor to be appointed by the Communications Ministry is to determine the MIRS license fee at a later date. Partner Communications, which recently received a government license, paid $400 million for the rights. But in all likelihood, MIRS will have to pay less as it will be entering a fully saturated marketplace to face-off against three fierce competitors.

MIRS is controlled by

Motorola

(NYSE:MOT), 66% and the

Ampal American Israel Corporation

(Nasdaq:AMPL), which has 25%.

Current cellular license holders in Israel include:

Cellcom

,

Partner Communications

(Nasdaq, LSE:PTNR),

Pele-Phone Communications

and

MIRS Communications

.