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[January 17, 2013]
Rami Levy in talks to sell MVNO to Pelephone
Jan 17, 2013 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Telecommunications industry sources say that Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) chairman Rami Levy recently met representatives of mobile carrier Pelephone Communications Ltd. to sell his mobile virtual network operator (MVNO), Rami Levy Communications Ltd. The MVNO's business has been declining under a steady abandonment by subscribers.
Rami Levy Communications has not been able to respond to the latest discounts offered by new carriers Golan Telecom Ltd. and Hot Mobile Ltd. (NIS 49 per month for six months), Alon Israel Oil Company's MVNO YouPhone Ltd. (NIS 39 per month for four months), and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) brand's 012Mobile (NIS 44 per month for six months). Rami Levy Communications still has the same plan with which it launched several months ago -- NIS 88 per month -- and customer mobility data indicate that the MVNO is suffering from a rising churn rate, belying the company's claims to the contrary.
Rami Levy has reduced Rami Levy Communications' activity at his supermarkets, and it is no longer possible to join the MVNO at every supermarket. He also reduced the MVNO's workforce, and in general its business is waning.
Rami Levy Chain Store's financial report for the third quarter of 2012 stated that Rami Levy Communications had 68,000 subscribers, after a net recruitment of 1,000 subscribers. The number of subscribers has since dwindled, but until the financial report for the fourth quarter is published, the exact figure is unknown. Under the circumstances, it cannot be ruled out that Levy will sell the MVNO for the right price.
Rami Levy Communications buys end-to-end services from Pelephone, including SIM cards. In effect, the MVNO is a branch of Pelephone under Levy's brand, and the sale of the MVNO to any carrier other than Pelephone would require the replacement of all the SIM cards, which is unrealistic.
Ramy Levy declined to respond to calls, and Pelephone declined to comment.
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