An Israeli mobile phone provider is in trouble over an aborted ad campaign aimed at Hasidic and ultra-Orthodox Jews.
Cellcom, the country’s most popular mobile carrier, received a rare order from the Israeli Communications Ministry to stop a marketing campaign targeted at haredi (ultra-Orthodox and Hasidic) Jews. The laws of the Middle Eastern country grant the Communications Ministry wide latitude to intervene in the business practices of mobile phone providers.
The trouble comes from a price war between Cellcom and Mirs, a smaller mobile carrier with extensive ties to the haredi community. Mirs has become popular among Israel’s haredi Jews thanks to their aggressive marketing of kosher phones—inexpensive handsets that are crippled in order to disable their text messaging, voice mail, gaming and application functionality.
While most kosher phones are blocked from accessing the internet entirely, several high-end models permit access to a handful of websites approved by influential haredi rabbis.
In a legal development that would be unlikely to arise in the United States, Mirs filed a cease and desist order against a Cellcom marketing campaign targeting haredi Jews. Surprisingly, the Communications Ministry acted on their behalf and forced Cellcom to end their haredi marketing campaign.
Mirs alleges that Cellcom’s intentional poaching of their customers violated Israeli law. According to Gad Perez of the Israeli business daily Globes, “the ministry based its decision on the grounds that if Cellcom had targeted the haredi community as a whole, it would not have intervened, but the direct targeting of Mirs’ customers violated the terms of Cellcom’s license.” According to a letter sent by Mirs to the Communications Ministry, Cellcom’s pricing plans were “predatory.”
Cellcom was offering a highly-discounted package to haredi customers which included 2,000 minutes of airtime a month for US$10, a handset rebate and compensation for any costs incurred by changing carriers.
Mirs specifically targeted the haredi community with a series of pricing plans that catered towards members’ lifestyles with low monthly subscription fees, cheap extra handsets and free minutes monthly for all family members. Haredi Jews, following the Biblical injunction to “be fruitful and multiply,” traditionally have had large families. A large portion of the Haredi community lives on public assistance, which has also assisted Mirs in market penetration through low-cost, no-frills plans.
Micromarketing of custom-tailored mobile phone plans to specific demographics is common practice in Israel among all mobile providers. These include special phone plans tailored towards soldiers, Arabs and Israelis working in foreign countries.
Cellcom did not incur any fines or penalties due to the Communications Ministry’s ruling.
(Source: Fast Company)
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8 Responses
“A large portion of the Haredi community lives on public assistance,”
Nice, very nice. When will there be an item with the tag ‘Hareidi’ which is free of the requisite antisemitic drivel!
How was Cellcom targeting Mirs customers specifically as opposed to Hareidim in general?
Like most Europeans, and unlike the United States, Israel doesn’t hold by free competition or commerican free speech. In the US, it is considered good that one company tries to take customers away from a competition – forces them to make better products.
To Anonimity86: Cellcom was offering this deal ONLY to people who would literally hand in their Mirs cellphone to Cellcom. If you didnt want to hand in your phone, you could show a recent Mirs invoice (which would be scanned in to the Cellcom computer database) but it would cost an extra $3 per month. Apparently over 7000 Mirs customers moved to Cellcom so far!!! No wonder Mirs went wild…. Rumour has it that this “war” was started by Mirs in the non-chareidi market, and Cellcom hit back where it hurt Mirs most. The fact that it has been stopped by the Communications Ministry is irrelevant, the “damage” to Mirs and the gain to the chareidim has already happened!!
Akuperma,
Halachah does not consider it “good” that one company tries to take customers away from a competitor. It can be a form of theft and actionable in beit din.
Letoeles Harabim, cellcom also offers you a free upgrade on your cellphone, neglecting to tell you that it’s only free if you spend 100 shekel in airtime, which is very rare for the standard user. That means that for the next 3 years, you’re going to be paying off this “free” phone!
akuperman/ charliehall —
It is very hard to see how hasagas gevul would possibly be applicable in this case. There are numerous cell phone companies that market “kosher phones” — Mirs never had an exclusive market. In fact I believe cellcom was there first!!
That being said, it seems that cellcom’s goal here is to destroy Mirs (a tiny company with only about 4 -5% of the market share to begin with), which if successful would lead to less competition — not more. If Mirs simply cannot afford to compete, and folds, then the field is open for cellcom to return to its higher rates.
#5 – you are talking about “haseges gevul” and its a little more complicated – traditionally some form of monopoly needed to be granted by a Beis Din that was accepted by the community – and it never applied to a big market (otherwise the first grocery store or book store in Boro Park would preclue others). Note that the company went to the hilonim to complain, rather than bring an action before a Beis Din – since we are talking about hareidim, the latter would have been more effective if there was a halachic basis for the relief they sought