Cellcom Israel Ltd. (NYSE: CEL) (TASE: CEL) has entered a mediation agreement with Golan Telecom and a 3G and 4G network sharing and 2G hosting services agreement with Electra Consumer Products Ltd., an Israeli public company which simultaneously entered an agreement with Golan Telecom and Golan Telecom´s shareholders to purchase Golan Telecom´s share capital, the company said.
The agreement shall become effective upon and subject to the receipt of any required regulatory approval including the Antitrust Commissioner and the Ministry of Communications´ approvals and the closing of the SPAE.
The parties will cooperate in the development of a shared 3G and 4G network and future technologies, which will use both parties´ 3G and 4G frequencies, to be operated by a separate, newly created entity or NewCo, that will be equally owned by the parties.
Each company and Golan Telecom shall own or receive an indefeasible right of use, or IRU, in the active elements of the shared network, in equal parts and will grant each other and NewCo an IRU in the active elements of the shared network. To that end, Golan Telecom will purchase from the company an IRU in half of the active elements of the existing 3G and 4G network owned by the company.
Future ongoing investments in such active elements shall be equally borne by the parties, and each party will operate its own core network.
Cellcom Israel, established in 1994, is an Israeli cellular provider, providing approximately 2.822 million cellular subscribers (as at September 30, 2016) with a broad range of value added services including cellular telephony, roaming services for tourists in Israel and for its subscribers abroad and additional services in the areas of music, video, mobile office etc., based on Cellcom Israel´s technologically advanced infrastructure.