Israel's digital satellite franchise holder, Yes, has told the government that it will return the franchise to the ministry of communications unless the country's cable operators are forced to share their programming with the new outfit.

Yes has also told its programming suppliers that all deals are off until the issue is resolved. Yes chairman David Brodet claims the company's credit lines have been cut off due to the ministry of communications' delays in mediating between the two parties. The cable operators have secured long-term output deals with leading producers around the world, but are holding programming back because they believe the launch of digital satellite will have a negative impact on their audiences and revenue.

Yes has borrowed $100m to build the infrastructure necessary for digital broadcasts which were scheduled to start at the end of 1999. The company claims to have provided about 100,000 homes with dishes and to have completed installation of a broadcasting centre in Tel Aviv. But as Yes does not have sufficient programming and no clear launch date, its creditors have started to voice their concerns.

The ministry of communications has not reacted to Yes' ultimatum although Matav, one of the three major cable operators, has already warned shareholders of reduced profits for next year: "due to high costs of programming and the competition of DBS telecasts". The statement is seen as a warning, also to the government, that the cable industry will suffer if forced to share programming with DBS.