Partner, Bezeq And Fiber: What Flexibility Is Really Left After The IRU And The New Wholesale Limits

The main article argued that 2026 will test Partner less on whether the business can keep improving and more on how management uses the operating and balance-sheet strength it has already built. This follow-up isolates one adjacent question inside that broader test: after the Bezeq IRU and after the wholesale decisions published in February 2026, how much fixed-network flexibility does Partner really still have?

The short answer is fairly sharp. The IRU still buys Partner coverage, speed, and access. But it is no longer just a rollout engine. Under the new regime it also directly reduces the company's regulated BSA allocation. That means the cheaper wholesale path that now exists on paper does not sit cleanly on top of the IRU. Part of it is already consumed by the IRU footprint Partner pre-bought.

This is not a dramatic reading that says the strategy broke. It also does not support the comforting reading that nothing really changed. What changed is the shape of the option. Partner used to be able to treat BSA more like a relatively flexible way to complement rollout. Now part of that future flexibility is formula-based, quota-bound, and subject to prior approval. That difference may not blow up 2026 EBITDA, but it does reduce marginal room to maneuver just when 95% of Partner's internet subscribers are already on fiber.

Three findings should frame the discussion:

• First: the IRU solved a real access problem for Partner. It was never just about shaving input costs.
• Second: the February 2026 decisions improved the regulated price for a fiber connection, but they also pushed large-company access into a quota-and-approval regime.
• Third: because the IRU lines are deducted from Partner's regulated BSA allocation, the company gets less benefit than the headline price cut suggests.

What The IRU Actually Bought Partner

The right way to read the IRU is not as "another infrastructure agreement" but as a pre-purchase of strategic room. In December 2022, Partner signed for an irrevocable, non-transferable 15-year right of use over 120 thousand lines, delivered in five equal annual tranches. The total consideration for the base agreement was about NIS 574.2 million plus VAT, with the option to spread each tranche over five years. The company also received an option for another 48 thousand lines, and by the end of 2025 it had already exercised 36 thousand of them.

The commercial logic is straightforward. Partner is no longer building its fiber story from scratch. It ended 2025 with 468 thousand fiber subscribers, up by 33 thousand from the end of 2024, and with 95% of its internet base already on fiber. In other words, the IRU was not a side note. It supported a very real acceleration in household reach while the fixed business became much more fiber-based and much less dependent on legacy non-fiber internet subscribers.

There is another layer here that matters. The September 2024 amendment did more than lengthen the payment schedule for the fifth tranche and the optional lines from five annual payments to ten. It also gave Partner the right to resell, lease, or otherwise grant rights in those lines to a third party with the proper license, without extra payment and without Bezeq's consent. That matters because it means the IRU is not a hard lock with no commercial valve. Partner already reports agreements to grant usage rights both on its own fiber infrastructure and on Bezeq lines covered by the IRU.

So the correct read of the IRU through year-end 2025 is positive, but not naive. It bought reach, speed, and a degree of commercial optionality. It did not buy unlimited regulatory freedom.

What Changed In February 2026

This is where the continuation thesis really sits. The Ministry of Communications did not just change price. It changed the rules of access.

In February 2026, the Ministry published decisions that lowered the regulated price for a 1 gigabit fiber connection from NIS 72 to NIS 58 per month, with no CPI linkage. At the same time, it set the tariff for access to Bezeq's passive infrastructure at NIS 180 per month per kilometer of deployment, CPI-linked. It also made clear that the regulated wholesale fiber price will remain in force only until August 2028, after which price supervision for large companies, including Partner, will be removed.

But that is only the visible part. The more important part is the allocation mechanism. Bezeq will have to provide BSA and VULA to each large company only according to a formula that reflects the number of residential units that have access only to Bezeq infrastructure, multiplied by that company's retail internet market share among the large groups. Any request above that quota requires prior approval from the Ministry.

That means large-company wholesale access, and Partner is explicitly treated as one, stops looking like an open shelf and starts looking like a capped and managed route. New BSA or VULA agreements with a large company, and material amendments or expansions of an existing agreement, also require prior approval.

The analytical takeaway is simple: the price cut looks very helpful when read on its own. It looks much less generous once it arrives together with a quota, prior approval, and a clear expiry date for the regulated price for large operators.

Where The IRU Actually Eats Into Flexibility

This is the point that turns the whole thread into more than generic regulation. The Ministry explicitly decided that the number of lines included in Partner's IRU with Bezeq will be deducted from the company's BSA allocation at the regulated price. That is the bridge between the 2022 decision and the 2026 decision.

In plain terms, Partner does not get two separate worlds at once. It cannot both benefit from the IRU lines it already locked in and also treat the new regulated BSA quota as if it starts from zero. The IRU already uses up part of the space the formula leaves open inside the regulated path.

That is also why the most important sentence in the note matters so much: as of the report date, Partner already held a number of BSA lines that was greater than the amount produced by the formula, because of that agreement with Bezeq. As a result, any additional purchase from Bezeq starting on September 1, 2026 will require prior Ministry approval.

That is the core of the story. Not because Partner loses the network it already has. Not because the new price is irrelevant. But because marginal flexibility now moves from something the company could exercise commercially to something the company may need permission to use.

That shift has three implications.

First, the price cut to NIS 58 is not an open-ended option on future growth. It applies inside a capped allocation while the IRU is already counted within that room.

Second, the option Partner bought in 2022 partly turns into a commitment that now comes ahead of the 2026 wholesale regime. That does not make the agreement a bad one. It does mean the company paid in advance for flexibility that now no longer functions fully as an add-on to the regulated path, but partly as a substitute for it.

Third, the regulatory window is shorter than the contractual one. The regulated price is supposed to last until August 2028, while the IRU principal schedule continues beyond that. At the end of 2025, outstanding principal stood at NIS 461 million, with NIS 127 million in 2026, NIS 121 million in 2027, NIS 52 million in 2028, and NIS 161 million in 2029 and beyond. So the infrastructure commitment keeps running even after the regulated price path stops being available to large companies.

Those numbers do not say the IRU became a bad deal. They do say the question changed. The question used to be how fast the agreement expands reach. The question now is how much future flexibility it has already pulled forward.

Why This Still Does Not Break The Thesis

This is the point where overstatement becomes a risk. Partner says that, if the new arrangements are fully adopted and implemented, they are not expected to have a material effect on the company. That is a position one can understand.

First, Partner is no longer in the early stage of building a fiber base. Ninety-five percent of its internet subscribers are already on fiber, and the non-fiber base is down to just 24 thousand subscribers. So the heavy migration work has largely already happened. That reduces the probability that the company will need a fresh block of Bezeq capacity every quarter simply to keep the fixed story moving.

Second, the fixed segment enters this new regime from a better operating base. Fixed service revenue stood at NIS 1.272 billion in 2025, and adjusted EBITDA rose to NIS 508 million from NIS 458 million in 2024, even if part of that improvement is not perfectly clean. So the current run-rate of the business is not entirely dependent on a newly cheaper and fully open BSA route.

Third, the 2024 amendment created a meaningful release valve through the right to resell or lease IRU rights to licensed third parties. As long as Partner can monetize some of that capacity outside the direct retail customer relationship, the IRU is not just a sunk cost. It is also a commercial platform.

So if the question is whether Partner lost its fiber thesis, the answer is no. If the question is whether it still has full freedom to choose in the future between IRU, BSA, and further expansion without the regulator standing in the middle, the answer is also no.

The more precise reading is this: the current business remains relatively stable, while the marginal option gets narrower. That is exactly the kind of change a company can call "not material" in the near term, while an analyst should still flag it as a decline in the quality of flexibility.

What The Market Should Measure From Here

The first point to watch is not the regulated price on its own, but the relationship between new fiber adds and Partner's need for incremental Bezeq-based access. As long as growth is supported mainly by the footprint already secured, the quota will matter less. If the company needs more lines beyond the formula, the friction will surface immediately.

The second point is the quality of IRU monetization outside the direct retail channel. Partner already says it has agreements to grant usage rights to third parties both on its own infrastructure and on Bezeq lines covered by the IRU. If that layer grows, the IRU becomes less of a burden on quota capacity and more of a broader commercial platform.

The third point is disclosure. The report explains the mechanics of the new regime clearly enough, but it does not provide a full quantitative bridge for the future mix between own fiber, IRU lines, BSA, and VULA. That means 2026 will have to be read mainly through outcomes: internet subscriber growth, fixed-segment profitability, and whether new regulatory approvals start appearing.

Conclusions

The Bezeq IRU still looks like a strategically sound move for Partner. It bought faster household reach, helped push the internet base to a point where 95% is already on fiber, and came with some cash-flow relief through a longer payment schedule and an added option to monetize rights with third parties.

But February 2026 changes how that same agreement should be read. The regulated price is lower, yet the quota is tighter. Prior approval is now part of the process. And the IRU lines do not sit beside BSA, they are deducted from it. What remains is therefore neither "no flexibility" nor "full flexibility," but reasonable flexibility on the base already built and narrower marginal flexibility on anything beyond it.

Current thesis: the IRU still supports Partner's fixed-network thesis, but after the February 2026 decisions it also reduces part of the company's future ability to benefit from a regulated, cheaper, and open BSA path.

What changed versus the main article: there, this was a compressed warning that the IRU reduces some future sourcing flexibility. Here, the mechanism is clear: the quota is formula-based, the IRU is offset against it, and any expansion beyond that becomes approval-based.

Counter-thesis: the market may end up over-weighting the issue, because Partner has already completed most of its fiber migration, it enters 2026 with a stronger fixed base, and it may be able to keep growing within the footprint it already has without quickly hitting a practical regulatory ceiling.

What could change the market read in the short to medium term: any new approval request, any unexpected slowdown in fiber adds, or any new quantitative disclosure around the line mix between IRU and BSA would immediately change the reading. On the other hand, if Partner keeps growing in fixed without visible friction, the concern may stay at the level of a constrained option rather than an operating hit.

Why this matters: in a maturing fiber market, value is no longer defined only by how many lines a company has, but by how much freedom it still has to change its access mix when regulation moves. That is exactly where the IRU shifts from a pure growth engine to an asset with both upside and an option cost.