Wednesday, January 26, 2011

An Israeli Mobile Phone Provider's Hasidic Blues 

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.

Israel has approximately 730,000 haredi Jews. Haredi clergy have largely frowned upon the use of mobile phones while accepting them as a necessary evil. One influential rabbi, Ovadiah Yosef of the theocratic-leaning Shas parry, formulated a missive urging yeshiva students to avoid purchasing smartphones:

We heard of small, new devices that let you watch movies and surf the internet, heaven forbid, and reach all sorts of foul places--in one instant a man can stumble and fall, heaven forbid, to the bottom of the pit […] Therefore […] we urge [you] to keep as far away from these dangerous devices as possible, keep restraint and beware.

Other statements made by the sometimes controversial Rabbi Yosef have targeted women, homosexuals, atheists, liberals, Arabs, and Jews of Eastern European descent.

Mirs specifically targeted the haredi community with a series of pricing plans that catered toward 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 toward soldiers, Arabs and Israelis working in foreign countries.

Cellcom did not incur any fines or penalties due to the Communications Ministry's ruling.


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