Bezeq raises 2025 forecasts on expected change in Yes valuation

Bezeq raises 2025 forecasts on expected change in Yes valuation

Bezeq Israel Telecommunications Corp. Ltd. (TASE: BEZQ) has announced a significant update to its 2025 financial forecasts, driven by an expected change in the valuation of its subsidiary, Yes Television and Satellite Services Ltd. The announcement follows a recent hearing document issued by the Ministry of Communications regarding the reduction in wholesale market tariffs.

According to the hearing document, the Ministry of Communications is proposing a reduction in the cost model underlying wholesale tariffs. This includes updates to the tariffs for managed broadband access services and passive infrastructure access services. The proposed tariffs for 2025-2029 are as follows:

- Speed up to 1 Gbps: 49.06 in 2025, increasing to 58.17 by 2029.
- Speed over 1 Gbps and up to 2.5 Gbps: 58.15 in 2025, increasing to 72.19 by 2029.
- Passive infrastructure access service: 150.3 in 2025, increasing to 164.6 by 2029.

Bezeq expects the proposed tariff reduction to have a positive impact on Yes, its subsidiary. The company anticipates a significant one-time accounting gain in its financial statements for the third quarter of 2025 due to the increase in the fair value of Yes. This gain is expected to be substantial, reflecting the positive impact of the tariff reduction on the subsidiary's operations.

The company's assessment suggests that the direct impact of the proposed tariff reduction, if approved and implemented as outlined in the hearing notice, is not expected to be material. This is due to the Interconnection and Roaming (IRU) agreements the company has signed. However, the indirect positive impact on Yes is anticipated to be significant.

Bezeq's announcement comes as part of its ongoing efforts to align with the Ministry of Communications' guidelines on wholesale market pricing procedures. The company's forward-looking information is based on its assessments, including assumptions and expectations, and the data available to it as of the date of the report.

The information included in this report, including the outcome of the hearing and its potential impact on the Company and its operations, constitutes forward-looking information as defined in the Israeli Securities Law, 1968. Such information is subject to risks and uncertainties, including factors beyond the Company's control.

References:
[1] https://www.marketscreener.com/news/bezeq-israel-telecommunication-immediate-report-ministry-of-communications-notice-regarding-redu-ce7c5fd9dd81f522