With the ink barely dry on the merger agreements between Internet and international telephony companies, Barak 013 with NetVision Ltd. (TASE: ), and Golden Lines International Communication Services Ltd. with Internet Gold (Nasdaq: IGLD; TASE:IGLD), prices of Internet services are once more heading upward after years of stiff competition in the field.
A survey by “Globes” reveals that some companies have put up their Internet access prices, after years of continuous price erosion, while others have left their prices unchanged, and have not lowered them as they did in the past. All the companies cut down on special offers to users.
In some instances, prices went up by as much as NIS 10 per surfing plan, meaning that the added cost to some customers could reach even more than 30%. A manager at one of the Internet companies said that he believed that market prices would definitely not be coming down again, and there was a good chance that they could rise even further in 2007. “It’s high time that prices went up, after such a long period of constant erosion,” he said.
Broadband Internet currently costs NIS 33-49 a month for a 1.5Mbps connection. Some companies previously offered lower prices than these, while others offered similar prices bundled together with attractive packages.
Bezeq International, the largest Internet service provider with an estimated 35% market share, offers a 1.5mbps connection for NIS 49 a month. However, although it undertakes not to put prices up, it simultaneously offers various plans that are dearer, but include additional services.
Barak, for example, has just raised its charge for a 1.5mbps connection to NIS 39 a month, from NIS 29 a month. Golden Lines cut back on its special offers and reduced the number of free months to new customers. Internet Gold has put up its monthly charge to NIS 39, after NIS 29 for the first six months.
The Internet companies say that there has been a rise in broadband usage by customers, who are now using broadband much more extensively, and therefore prices had to go up. Customers are also demanding more complicated services, requiring larger, and more expensive, service networks.
Published by Globes [online], Israel business news - www.globes.co.il - on January 11, 2007
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