Official: A 40 percent reduction in home phone prices

Savings of about NIS 400 million a year for the public: Communications Minister Yoaz Handel signed a reduction in home phone tariffs, after Finance Minister Avigdor Lieberman gave his consent to amend the regulations.

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Yinon Ben Shoshan

02/01/2022

Sunday, 02 January 2022, 14:17 Updated: 14:27

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Phone (Photo: ShutterStock)

After 18 years in which the tariffs were not updated, the Ministry of Communications announced this morning (Sunday) that it is reducing home phone tariffs in the Bezeq network, the move will reduce consumer tariffs by about 40%, and save the public about NIS 400 million a year.

According to the ministry's estimate, this is an average annual saving of hundreds of shekels for a household and especially for the elderly population and the ultra-Orthodox sector who make increased use of the home telephone.

The tariff update is based on the economic opinion of Prof. Reuven Gronau and Dr. Ofer Raz-Dror (VP of Economics), which indicates an excess profitability for Bezeq that is not passed on to the consumer.

Bezeq's telephony rates are set by the Ministry of Communications and the last update was made about 18 years ago, in 2003. Today, Bezeq rates are fixed rates of NIS 49.5 per usage fee, a call to a fixed station at 6 ag per minute and a mobile 11 ag per minute (excluding VAT).

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The last update was made 18 years ago.

Bezeq (Photo: ShutterStock)

The reduction process will take place in two stages: in the first stage, the regular monthly payment will be reduced to NIS 35, including VAT (NIS 29.91 excluding VAT), and call minute rates will not change.

In the second stage, the fixed payment will be further reduced to 24.36, including VAT (NIS 20.82 excluding VAT), and call rates will also be reduced - a call to a fixed 1.4 ag per minute and a mobile 7.4 ag per minute (excluding VAT).

These rates will be set as prices Maximum per consumer, ie Bezeq will be allowed to market the services at lower rates, but it will not be able to charge higher rates than the maximum prices. The first phase will begin on April 1, 2022, and the second phase will begin on July 1, 2023.

Minister of Communications Yoaz Handel signs the document (Photo: screenshot, spokeswoman for the Minister of Communications)

"Today we are correcting a continuous consumer distortion in the home phone market. After the landline phone rates were not updated for 18, a significant reduction in price was signed today to suit market needs," said Communications Minister Yoaz Handel.

"The use of the landline phone has decreased over the years, but there are still about 1.4 million subscribers to the landline phone service. Those who mainly pay the price are the ultra-Orthodox sector and the elderly population who still make significant use of the home phone."

"Where competing forces fail, the public interest obliges the regulator to make use of the tools at its disposal," said Ministry of Communications Director General Liran Avishar Ben-Horin. It is expected to create the right balance between the company's costs for providing the service and the subscriber payments, and save the public about NIS 400 million a year. "

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