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Israel's Partner Comms in fibre optics deal with rival Bezeq

By Steven Scheer

JERUSALEM, Dec 22 (Reuters) - Israeli telecoms firm Partner Communications said on Thursday it had struck an agreement to use fibre optics infrastructure from market leader Bezeq Israel Telecom in a deal expected to reach 1 billion shekels ($289 million).

Partner's fibre network reaches 929,000 homes and has 277,000 customers, while Bezeq, Israel's largest telecoms group, reaches 1.5 million households and has 233,000 subscribers.

Under the deal, Partner

It will pay 574 million shekels - in five instalments - plus taxes and 4% annual maintenance fees that would reach a total of around 1 billion shekels, Bezeq said in a separate regulatory filing in Tel Aviv.

Partner also received an option to use an additional 48,000 fibre lines under the same terms and to extend the agreement period for up to 10 years.

Bezeq said the deal would increase the usability and utilization of its fibre network, "its revenues and profits, and its free cash flow - mainly in the first nine years of the agreement - with a high level of certainty for future revenues from the cables in the wholesale market."

At the same time, it said the agreement included a discount on wholesale fibre optics market rates.

Bezeq has said it aims for its fibre network to reach 2.2 million homes - 82% of the country - in the coming years.

Previously a government monopoly, Bezeq had been locked in a long battle with the industry regulator over the terms of its fibre deployment. It eventually reached a deal where it did not have to cover 100% of the country - which it believed was not financially viable - but rather 70%, and it began to deploy its network in March 2021.

($1 = 3.4656 shekels) (Reporting by Steven Scheer Editing by Mark Potter)