wecom gets into trouble: the Ministry of Communications informed the company of its intention to forfeit its guarantees for 5 million shekels following non-payment of license fees totaling 45 million shekels. As revealed in Globes, the company did not pay license fees due to delays with Apple, which has not yet released the use of its devices in the fifth generation of Wecom’s network.
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The Ministry of Communications rejects the link made by the company between the payment of license fees and its relationship with Apple and says that the link is baseless and unacceptable. From the office’s point of view, the payment of the license fee is an obligation that the company is obligated to as the winner of the tender, and the obligation to pay was not conditioned on Wecom’s business status. The office states that the duties imposed on the winner of the tender were known in advance and the company assumed an obligation when it won the tender, therefore we cannot accept conduct in which wecom does justice to itself and blatantly violates the regulatory obligations to which it undertook when it was granted a license and allocated radio frequencies for the purpose of providing its services.
wecom is delaying the payment because, according to it, as long as Apple does not release the block on fifth-generation iPhones in its network, subscribers will not join it, and therefore this is a radical change in the terms of the auction. The company continues and claims that as soon as a solution is found with Apple, it will transfer the full payment for the license. We would like to emphasize that following the company’s requests, the Ministry of Communications contacted Apple and currently there is cautious optimism that the business will work out. In any case, we will explain that Apple releases blocks for the fifth generation in accordance with its policy and there does not seem to be any particular reason for the delay specifically in Wecom. At the same time, the latter claims that the reason the ministry needs to intervene, as well as the competition authority, is that Apple releases blocks to operators in preference to those who sell its devices, and an operator who does not sell devices is pushed down the list.
As mentioned, the Communications Ministry does not accept the interpretation made by wecom, and they mainly fear a regulatory precedent and damage to the image of the ministry that allows companies not to pay license fees due to one or another argument with an external party.
Moikom stated that they hope that the issue will be resolved to the satisfaction of both parties, even before the deadline set by the Ministry of Communications, and thank the Ministry for the efforts being made to reach a solution.