May.18, 2012 | 2:38 AM–The cellular market went wild this week. After years of milking us, stealing from us, sending us monthly bills of hundreds of shekels and more, suddenly a young French Jew by the name of Michael Golan appears who offers us a package of attractive services that includes calls and SMS without limit as well as Internet for just NIS 100 a month.
We hadn’t even gotten used to the idea when a second French Jew, Patrick Darhi, appears as a competitor and offers the same package for just NIS 89. Competition, as it is supposed to do, spurs the veteran cellular operators – Cellcom, Pelephone and Partner – to match them and cut the price of their service packages by tens of percent. Their offerings aren’t as attractive as the new providers, but it’s a start.
No doubt about it, the cellular market has undergone a dramatic change: From a market of monopoly players, in which three companies lived peacefully with one another, to a competitive and dynamic industry where the consumer is king.
Everyone – those who moved over to one of the new providers and those who didn’t – can save money, lots of the money, that their cell phones were costing them from this week on. It is a major victory in the struggle to bring down the cost of living in Israel and will only encourage consumers to demand the same from other monopolized sectors of the economy – to cut costs, let new players enter the market, let market forces play out and turn Israel into a consumer paradise. Is somewhere here over-excited?
To discuss the opening up of additional sectors of the economy such as banking, air travel, insurance and pensions, electricity, the ports, food and other fields to competition, we need first to understand what made the opening up of the cellular market possible. A series of unusual conditions did it, conditions that are not readily apparent.
Where to begin? Let’s start with the fact that competition in the cellular market could have started a decade ago instead of this week, but there was no ready to make it happen. Before Moshe Kahlon was appointed communications minister, there was no one occupying that post with the determination to defend the consumer. Instead, we had a series of ministers who preferred the cellular companies and their shareholders and had no courage to work for the simple caller. Kahlon had the courage.
When he took over the portfolio, he found the cellular companies cost-ridden, bloated, earning unreasonably high profits – an anti-consumer industry in terms of charges and exclusivity agreements that prevented subscribers from changing providers without paying costly penalties of thousands of shekels…Read More>>