In an interview with "Globes" editor-in-chief Hagai Golan at the "Globes" Marketing, Advertising, Digital, and Communications Conference, Ministry of Communications director general Shlomo Filber said, "If everyone shouts equally, then we moved everyone's cheese - and generated competition. What interests the prime minister is news, not "Survival" or food programs. We decided that the government would stop appointing directors in the new companies.
"Globes": You are responsible for quite a few areas within your ministry. I want to start with the cellular field. Yesterday, you struck down the agreement between Golan Telecom Ltd. and HOT Mobile Ltd.. Is this the end of Golan Telecom?
Filber: "First of all, we didn't rule it out, but let's talk about the macro - about the cellular market. I said that the cellular market is in the last days of Pompeii - that the market will collapse. Communications infrastructure in Israel is quite unique; in security, it's the second most important after electricity. If Golan Telecom was a player that entered the market in order to encourage competition, it received a lot of protection in order to enable it to compete with the big operators and build infrastructure. It didn't build infrastructure; it distorted the entire market. They have three options: build a network, reach a sharing agreement, or get out.
"Yesterday, as soon as it was reported that the agreement between HOT Mobile and Golan Telecom wasn't going through, the cellular shares jumped. That means that the market believes that the communications market will shrink, and we'll see a rise in prices. I wouldn't pay attention to one day in the capital market. There will still be competition even after Golan Telecom leaves. There are four substantial companies - that's not going to change, and so competition will stay and the low prices will stay."
The Filber Committee recommendations reduce regulation, but make it very difficult for the commercial channels, which are already bleeding,.
"When we started the committee's work on regulating the market, we realized that it was impossible to move one piece without affecting the entire board. We did our work; we took the four large entities that had enjoyed a lot of money for a quarter of a century down a peg: Hot Telecommunication Systems Ltd. (TASE: HOT.B1) and DBS Satellite Services (1998) Ltd. (YES) in multi-channel television and Channels 2 and 10 in commercial television."
But you know the state of Channels 2 and 10
"The entire subject of the advertising market is changing all over the world. This new world has to reinvent itself. The advertising pie is still stagnating. The situation in the West is far worse. What we did was to put more money into the kitty. I tell Channels 2 and 10 that we're bringing them NIS 200,000 in new revenue, and they say they don't need it. NIS 100-150 million in advertising disappeared with the wheeler-dealers the media purchasing companies. This money should return to the screen. It will return to the screen and improve the situation."
What about the producers market?
"There's a problem with the producers: they're great producers, but they can't do arithmetic. Before we took up the issue of quality programming, the production market was a NIS 400 million market. I'm talking about original productions, and other types were another NIS 300 million. We set this figure, and it won't decrease."
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2016
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