French Investor Xavier “My Way” Niel Targets Israeli Telecoms

Facing the imminent invasion of Israel by French entrepreneur Xavier Niel, stock analysts are expecting Israel’s leading telecom companies to take another financial punch in the gut. Tel Aviv’s TA-25 Index shows that telecoms are the worst performers so far this year.

Niel, known for offering dirt-cheap mobile subscriptions to consumers in Europe, could reshuffle the mobile phone deck in Israel by offering monthly mobile subscriptions to Israeli consumers for two dollars and pocket change through Golan Telecom Ltd. later this year.

Niel is a swashbuckling venture capitalist who created and sold his first high-tech company at the age of 19. He pulled up a chair for himself at the Israeli telecom table when he bought a stake in Golan Telecom.

Investors in Israel’s telecoms appear conflicted as Niel prepares his assault against the leading telecom giants in Israel.

Overnight, Partner Communications Co. and Internet Gold- Golden stumbled in U.S. trading. It’s speculated that investors are concerned over the entry of Niel into the telecom market. That move could cut into the mobile-phone provider’s earnings. Both companies dropped in trading.

In contradistinction, the Bloomberg U.S-Israel Equity Index showed that Internet Gold hopped up 5.5 percent.

Israeli company Internet Gold is affiliated with Bezeq Israeli Telecommunications Corp. The second largest telecom company in Israel is Partner.

Bezeq, Cellcom Israel Ltd. and Partner control 95 percent of Israel’s telecom market sales.

Analysts are speculating that all three might see earning declines as Golan Telecom and Niel declare a price war. In a similar battle in France, Niel scooped up 2 million customers from rivals in a matter of months.

According to Business Week, an analyst at Bank Leumi in Tel Aviv downgraded the telecommunication shares this week. “The genie is out of the bottle, and it’s changing the whole industry,” said analyst Gil Dattner. He voiced the opinion that Golan Telecom would offer Israeli consumers deep cuts in mobile subscriptions.

It’s no secret that the Israel government is unhappy with the performance of the major Israeli telecom players. Golan Telecom got the okay from the Communications Ministry last July to start stringing a new wireless network.

The 45-year-old Niel describes himself as the chief strategist officer at Iliad. Iliad is an Internet provider service in France.

Not much is known about Niel, except that he appears to spread varying degrees of heartburn to CEOs in the telecommunications and technology sectors.

A writer at Business Insider described Niel as the most active angel investor in the world. Niel, along with Jeremie Berrebi, invested in 130 startup companies in 18 countries through their Kima Ventures company by November 2011.

He also holds a controlling interest in the French newspaper Le Monde. In 2006, a French court slapped him with a two year deferred jail sentence for misuse of company assets of several sex shops in which he was a shareholder, according to a Wikipedia entry.

Telecom CEOs who wish to learn more about Niel might want to take an Alka Seltzer and study the lyrics to the song “My Way.” He co-owns the rights.

Filed Under: BusinessFeaturedJewish business News

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Menachem Greenfield About the Author: Menachem was previously a feature article writer for the Milwaukee Journal. He currently runs a small publishing business in Michigan focusing on books and magazines for the tourist industry. He is looking forward to writing for Jewocity and connecting with its readers. More about Menachem

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