By Hadar Horesh

The price the Communications Ministry is asking for spectrum for third-generation services is exorbitant and unjustifiable, Pele-Phone Communications chairman Amnon Neubach charged yesterday. Pele-Phone is one of Israel's four mobile communications companies, the others being

Partner Communications

(Nasdaq, LSE:PTNR), Cellcom and Mirs.

The Communications Ministry demands a minimum bid of $100 million for each of the frequency packages.

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Neubach noted that competitors in an Australian tender for 3G frequencies last month paid $450 million for their packages, or around $24 per inhabitant. Based on that calculation, Neubach said, the four frequency packages the state is hawking should cost $36 million each.

Pele-Phone and Partner plan to formally petition the ministry to lower its sights. Communications Minister Reuven Rivlin has promised to seriously consider their request.

Participants in the tender are also protesting the Communications Ministry's demand to receive, by July 17, their plans for the use of the frequencies. Third-generation cellular communication technology is yet to be fully developed, and the potential participants do not yet know what services they will be able to offer and what services customers will demand.

Communications Ministry director-general Daniel Rosenne commented that the business plans the ministry requires are not binding upon the companies, and are intended for informative purposes only.

The companies are required to submit their requests to participate in the tender by the same date, July 17, while the date for holding the tender has yet to be determined.

Despite their carpingPele-Phone, Partner and Cellcom plan to submits bids. Mirs, which earlier this year got a license to operate as a cellular service provider, is not expected to vie for spectrum. As of now, there is apparently no demand for the fourth frequency package on offer.