Israel to Consider Ending Structural Separation for Bezeq and yes

Israel's Ministry of Communications is preparing to issue a public hearing next week regarding the potential cancellation of the structural separation between Bezeq and its subsidiary yes. This move specifically concerns merging yes with Bezeq, excluding other Bezeq Group subsidiaries like Pelephone and Bezeq International. The proposal has been under review for the past year by a joint team from the Ministry of Communications, the Ministry of Finance, and the Competition Authority, and is now nearing the public hearing stage. The hearing will allow the public and relevant parties to voice their opinions before a final decision is made. Market estimates suggest a positive stance from the Ministries of Finance and Communications towards lifting the structural separation, citing Bezeq's compliance with infrastructure opening requirements and increased market competition. The process is not expected to conclude before 2027, as there is no set timeline to finalize it before the upcoming elections.

Proponents of the merger highlight significant tax benefits and improved customer value. A Ministry of Communications document from 2025 noted the rapid transformation of the fixed-line telecom market, with over 90% of households now connected to fiber optics, primarily utilizing Bezeq's passive infrastructure. The review aims to determine if structural separation is still necessary. Potential advantages of lifting the separation include considerable operational savings, a better consumer experience through a "One-Stop-Shop" for services and repairs, reduced regulatory burden, and incentives for investment. However, concerns remain about increasing Bezeq's market dominance and potentially harming competitors.

For the Bezeq Group, the benefits are substantial. It would allow for the offsetting of yes's past losses against Bezeq's financial reports, leading to significant tax savings. Additionally, Bezeq could offer bundled packages of internet and television services, referred to as "bundles" or "triples" by customer service centers. This would create a stronger competitive position and allow the group to leverage its considerable power in a unified manner. Bezeq CEO Nir David previously stated that such a decision would enhance efficiency, potentially lower prices, and improve customer service by consolidating providers. The Minister of Communications, Shlomo Karhi, indicated that a decision would be made by the end of the year.