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RealTime IT News

Cable & Wireless to Sell its Stake in Israel's Bezeq

Global telco player Cable & Wireless Monday agreed to sell its holdings in former Israeli telecom monopoly Bezeq for $630 million.

Cable & Wireless will sell 4.9 percent of its interest in Bezeq to Zeevi Communications Holdings Ltd. The company has also agreed to grant the option for an additional purchase of 14.6 percent, pending approval from the Minister of Communications.

Bezeq controls a significant amount of the country's Internet market share, and also dictates the cost of access through its telecom fee structure.

The purchase is expected to be completed by March of next year.

"We have been very satisfied with our investment in Bezeq, and we look forward to continuing cooperation with one of the leading communications companies of the region," Don Reed, Cable & Wireless' CEO of regional businesses.

Reed explained that the decision to sell was based on the company's new focus on Internet Protocol (IP) and data services. Cable & Wireless expects strong demand for the Bezeq shares following the privatization of the former monopoly, as well as the upcoming liberalization of its telephony market.

Cable & Wireless acquired its stake in Bezeq through two purchases in 1995, hitting a 20 percent equity in August.

Bezeq entered the ISP market early this summer with the intention of targeting neophyte Internet users. Subsidiary Bezeq International invested NIS 20 million (US$4.9 million) to upgrade the hardware systems bought from ISDN Net. The company also offers IP telephony calls using Vocaltec software.