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According to the reports received by the Ministry of Communications, Apple conditions the support of the 5th generation mobile phones by the fact that the mobile companies will sign a distribution agreement in front of it, so that they will sell Apple phones in significant volumes to their customers. Such a limitation leaves the cellular company at a disadvantage compared to the large companies, since for quite a few customers these are basic services that they expect to receive from the cellular company and which they are denied. The same is true for customers who purchase their device abroad and expect it to work in Israel through the network they subscribe to.
According to the suspicion, the blocking operation is apparently carried out through the identification of the SIM or eSIM card of the various operators. So, in devices that have a SIM from an operator that has a signed agreement with Apple, access to all services is allowed, while in those that do not, you get limited access.
Apple is not supervised by the Ministry of Communications in Israel, which is consequently limited in the steps it can take against the technology giant. The Ministry of Communications decided to take action against the company and not to leave the matter unaddressed. Upon completion of the inspection and receipt of the findings, the Ministry intends to contact other regulators in Israel, led by the Competition Authority, to motivate it to take action against the company.
The office also intends to act against regulatory bodies in the world, especially in the European Union, where measures have already been taken against Apple in competitive aspects, so that they will act against the company. The concern is that the mobile market indirectly subsidizes Apple, since the mobile companies are required, even if not explicitly, to meet Apple’s device sales targets for customers.
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In the letter sent to the cellular companies, they are required to answer a series of questions. “The Ministry of Communications is currently examining the effect of the Ratan terminal equipment compatibility procedure (mobile phone radio) in the license holders’ Ratan system on the state of competition in the communications market,” it said. “The companies are required to provide a series of information: a description of the various schedules for the stage of the actual pre-implementation of the network compliance procedure with the end equipment manufacturer: when did you contact the manufacturer for the first time? How much time passed between the contact and the start of the actual procedure? Did any requirements or difficulties arise at this stage ?”.
“Calcalist” also learned that the Ministry of Communications was not content with checking with the local companies and asked for explanations about the phenomenon to Apple worldwide as well. The company was required to explain how it is possible that companies that do not distribute the devices to their customers are blocked from the possibility of 5G surfing. Apple responded to the request by saying that it is a process that takes a long time, and that there is a queue of international companies, according to which the act of activating the devices against the network is done. The Ministry of Communications did not receive the answer and the claim being tested is how it is that the big companies that distribute Apple’s devices are at the top of the queue. The process is coordinated at the Ministry of Communications, Ofer Raz Dror, Senior Vice President and Director of Economic Administration at the Ministry of Communications.
The Ministry of Communications is testing, as mentioned, the tools that can be used by the Ministry to act against a huge entity that is not supervised by them, such as Apple, which does not intend to solve the problem quickly, according to the impression that is received. An initial inspection is being done with the Competition Authority and if there are any findings, the office intends to share them with international regulators to check suspicions that Apple is harming millions of consumers in the world in the same way. In other countries with different regulatory oversight, it is possible to stop the phenomenon where certain companies received an unfair competitive advantage from Apple. “The findings we have obtained so far are very disturbing,” an official at the Communications Ministry told Calcalist.
The phenomenon in Israel is particularly noticeable in the case of Wecom, which has a network sharing agreement with Cellcom, which means that the two actually use the same antennas, so that if one company has access to 5G, so do the customers of the other company. However, as mentioned, even in areas where there is 5G coverage by the shared network, a Cellcom customer who owns an iPhone can enjoy surfing on this network, while a Wecom customer will not be able to connect to it and will have to make do with the slower 4G network. Such a limitation may cause the customer to switch to another company and provide a different service, which actually harms the competition.
“At the most basic level, it is clear that what the company is doing does not smell good,” an official at the Communications Ministry told Calcalist. “It doesn’t sound logical that Apple is having trouble dealing with a network that it has already approved. Wecom and Cellcom operate on the same network and the same frequencies. Perhaps there are different operational characteristics here, but it is unlikely that in front of Wecom, opening the network to 5G takes months upon months, when Apple’s interest is to unlock the devices All the networks in the world. There are hundreds of devices adapted to the 5th generation and the big Apple is unable to open its devices only to the Wecom network. In our understanding, this is a seriously offensive practice of favoring companies over other companies and it is an act that will not be done in terms of antitrust. We are examining the phenomenon and looking for evidence that will allow For us to take action against Apple.”
An extreme reaction to the move is the possibility of banning the import of Apple devices into Israel if the issue is not corrected, but the Ministry of Communications will not rush to act in this direction, as this would be a detriment to consumers who prefer Apple devices, which holds a share of approximately 25% of the mobile device market in Israel. The Ministry of Communications believes that there is no written agreement between Apple and the cellular companies that links the sale of the devices to the implementation of 5th generation technology, but if it turns out from the reactions of the cellular companies that there is such a relationship, even if it is not written, the intention is to take direct and indirect measures against the international company, if they do discover that there is discrimination To the disadvantage of Wecom and Telzer which are relatively small.
“If a small company does not sell Apple’s devices and in response does not receive the same basic service as a large company that does – there is a problem here,” the Communications Ministry claims, adding that all their attempts to get Apple to provide a full 5G connection to the small companies have been unsuccessful.
No response was received from Apple until the issue was closed. When the response is received, it will be published in full on the “Calcalist” website.