TEL AVIV (Reuters) - Israel's largest mobile phone operator Cellcom said on Wednesday it signed a memorandum of understanding to invest in the Israel Electric Corp's (IEC) fibre optic venture.
Cellcom will invest 100 million shekels ($27 million) in exchange for 70 percent of the Israel Broadband Co (IBC), which has exclusive rights to deploy fibre optic over IEC's infrastructure. State-owned IEC will retain 30 percent. The funds will be used to settle IBC's debts.
"Cellcom Israel's investment in IBC will allow its continued operation and the ability to initially offer fibre optic internet services to approximately 150,000 households," Cellcom CEO Nir Sztern said.
The objective will be to reach over 500,000 households in three years, 900,000 after five years and 1.2 million in 10 years, he said. Fibre optics will enable IBC to supply internet infrastructure services of up to 1 gigabyte per second to operators.
The terms of an agreement are subject to further negotiations between the parties and approval of the company's board. Any deal will be subject to regulatory approvals.
($1 = 3.6806 shekels)
(Reporting by Tova Cohen, Editing by Ari Rabinovitch)