17 July 12 14:05–Barclays Capital gives Israel’s telecommunications sector a “Negative” outlook. Analysts David Kaplan and Tavy Rosner say that aggressive regulation in both the mobile and fixed line sectors is preventing growth, and will keep pressure on the market through the rest of 2012. They add that the market has not yet stabilized, but that this will not prevent companies from distributing dividends, although they may be reduced.
Kaplan and Rosner give Bezeq Israeli Telecommunication Co. Ltd. (TASE:BEZQ) and Orange franchisee Partner Communications Ltd. (Nasdaq:PTNR; TASE: PTNR) “Overweight” recommendations as their current share prices imply worst-case scenarios
Kaplan and Rosner say, “Following our recent meeting with the Ministry of Communications, it is clear to us that the regulator still sees work to be done. Most of it is on the fixed-line side of the business and includes opening the market to wholesale and introducing a third fiber-to-the-home (FTTH) network owned as a joint venture between Israel Electric Corporation(IEC) (TASE: ELEC.B22) and strategic investors. While the ministry speaks highly of this project and is doing all that is in its power to see it succeed, the tender process has been delayed for a second time. We presume that the delay is due to a lack of responses to the tender, and we expect the ministry to try and sweeten the offer.”…Read More>>