Bezeq May Soon Offer TV Services, Challenging Competitors

Bezeq may soon offer consumers integrated packages of telephony, internet, and YES television broadcasts for the first time. A joint team from the Ministry of Communications, the Ministry of Finance, and the Competition Authority, which re-examined the separation obligation between Bezeq and its subsidiary YES last year, announced that its opinion is nearing completion. Following its conclusion, a public hearing will be held, which Bezeq estimates will take place as early as next week, despite the upcoming elections. An opinion supporting the cancellation of the structural separation between Bezeq and YES would allow the two companies to merge and offer combined packages to the public, thereby competing with HOT, Cellcom, and Partner. Currently, Bezeq customers must subscribe separately to YES, hoping that a combined package will reduce service costs. Even if the merger is approved, it will be subject to limitations, including those concerning the separation between infrastructure and retail operations. The regulatory restrictions imposed on Bezeq to date, which prevented the merger, stemmed from Bezeq's status as a large monopoly, and the regulator's desire to maintain competition by not increasing its power further. Even if the hearing proceeds next week, public responses will require time, making a final decision on deregulation and permitting the merger unlikely just days before the elections. If this occurs, the decision will fall to a new minister, who might not approve it despite the professional opinion. For Bezeq, led by Chairman Tomer Ravid and CEO Nir Dod, this decision is significant. Beyond the integrated package, which Bezeq believes will increase its market share and revenue in broadcasting, it could leverage YES's accumulated tax losses, estimated at NIS 1.2 billion over a decade. Bezeq argues that the merger will free up resources from unnecessary bureaucracy for developing new products and accelerating technology. It is noted that even if the merger is approved now, it is expected to take effect only in 2027.