Monday, July 2, 2012

Cell Phone Service in Israel - A Visit to Cellcom

Thinking of arranging for cell phone service in Israel?  You should plan on spending quite a while in the cell phone store.  As you can see from this picture of a  Cellcom location, Cellcom locations often have a couch, water machine, coffee machine, washrooms and other facilities.  Nice to have all of these things if you have to be there for a while - but not a great sign for those hoping to get in and out quickly.

When we first arrived in Israel three years ago, we spent about 4 hours in an  Orange location arranging cell phone service.  Why did it take so long?  It was something like buying a car.  The sales representative would offer new and cheaper plans each time we tried to negotiate. Then she brought out the manager to offer us the "really good plan."  At the time, that meant the plan for people who had switched from using another cell phone provider.  Of course the plan was only good for a limited time period.  So after a while, we wound up switching over to Cellcom which was significantly cheaper.

Having a cell phone was crucial since cell phone use in Israel is so high.  Children from the age of 9/10 have cell phones (sometimes younger) and people use them all day long, even at their places of work.  Teachers give out their numbers, sales representitives (for almost anything) give them out and there is just a general expectation that you will be reachable on your cell phone at almost any time. 

With all of this heavy use, the good news is that, over time, cell phone rates in Israel have dropped quite a bit.  One recent contributing factor is that in May 2012, two upstart companies entered the fray -  Golan Telecom  and Hot Mobile.  Both have been offering all inclusive plans at fixed rates, which has put significant pressure on Israel's pre-existing cell phone providers.  As a result, we decided to visit Cellcom and see if they were adjusting to the competition.

We arrved at about 10 a.m. on a random weekday (not a Friday) and we took a number.  We got number 110 and they were on number 92.  How bad could that be?  Fortunately, they had a few IPad stations set up - so we played some computer scrabble, watched baseball highlights, news and did a few other things.  But by 11:15 a.m., it was still not our turn...It took until 11:45 a.m. until it was finally our turn. We didn't even get to use one of the couches (of the type that you can see in the photo above).  Too many other people waiting for long periods of time.  I suppose we could have just left - but from past experience, it wouldn't necessarily be any better the next time around.

The good news was that Cellcom has reacted quite a bit to changing market conditions.  We were offered a variety of new plans.  For the heavier users in our family (I'm not naming any names...), Cellcom was offering plans at either 129 N.I.S. including taxes (about $34 Cdn/US) (with 2 GB of data per month) or 119 N.I.S. without the data.  Both plans included unlimited minutes, texts, and MMS messages.  Both plans also included 200 minutes of international calling.  These plans are commitment-free - but they do not include a device.  Israel has instituted consumer legislation that bars cell phone and other telecommunications companies from locking in consumers without an easy out.  So on the usage side, it is fair to say that these plans are significantly better than Canadian plans (not necessarily American plans) from a variety of angles.  We were also offered lower rate plans for the "lighter users..."  For 59 N.I.S. ($15.50 Cdn), we could get 310 minutes or texts any time.  Fortunately, that is more than enough monthly usage for some of us.

On the flip side, the device costs are quite expensive.  Here, Israeli companies can lock consumers in to three year plans - though the only real "penalty" is that the phone has to be paid off in full if you leave the cell provider before the time period.  This is where these companies seem to be earning a fair chunk of their profits.  So far example, a new Samsung Galaxy III would cost about 4,500 N.I.S. spread out over three years.  That's close to $1,200 Cdn (including taxes) for a phone that you could buy in North America for closer to $550-$600.  An IPhone 4S is in the same price range.  Of course you can continue to use a phone you already have or get a phone with fewer new features. 

Ultimately, it looks like the cheapest way to go in the long run is to pick up the new device from another source (ebay? zap?) and then sign up for a commitment free plan with one of these Israeli providers that will meet your needs.  Just make sure that the phone is unlocked and compatible with Israeli networks.  Of course, the phones are often quite expensive.  Many people would prefer to pay a higher overall price for the phone by paying for it monthly in exchange for the convenience of not having to pay for the whole thing up front.  After all, paying 4,000 N.I.S. for a new IPhone (or even $800 on ebay) is quite an expense for a cell phone.

I haven't yet visited the other providers and we are still commitment-free for now (cell-phone wise).  It looks like it will be worthwhile investment of time to investigate other options.  But the good news is that Cellcom and others have dropped their prices substantially (our bill was cut almost in half overall) and that seems like a trend that is bound to continue.