ICT- Information and Communication Technology
Israel: Telecommunication Infrastructure Regulation & Liberalization |
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This section covers overview of current infrastructure including statistics of key ICT services. Regulation and Liberalization policies are also discussed. Israel has the best telecommunications infrastructure in the middle-east. Even when compared to developed countries like USA, it is consistently ranked closer to other developed nations for ICT readiness.
Statistics as of year 2003, available from Israel Ministry of Telecommunications are listed below [16]. The Israeli population is approximately 6.7 million and number of households is about 1.9 million  • 510,000 broadband lines (350,000 ADSL lines; 160,000 cable modems). • Broadband subscriber growth ~400% compared to 2002. • Broadband household penetration 27%. • Broadband penetration per 100 inhabitants 8%.[46] Source: Europe - ECTA Sep. 2003; USA & Korea - Nielsen NetRatings Sep. 2003 Source: MoC calculations based on: Europe - ECTA Sep. 2003; USA & Korea - Nielsen NetRatings Sep. 2003 Cell phone  The cell phone market is served by four companies, all of which cover the entire country. Pele-Phone (GoNext cellular service), founded in 1990 as a joint venture of Bezeq and Motorola Israel, has about 1.5 million subscribers. Pele-Phone uses NAMPS network technology and has also begun implementing the more advanced CDMA technology. Cellcom, the second cellular operator, is partly owned by Bellsouth Corp. of the U.S., the rest by other foreign and local investors. It provides services to its 1.85 million customers using TDMA technology. Partner/Orange has about 800,000 subscribers and uses the GSM standard and is controlled by a consortium led by Hong Kong's Hutchison.
A fourth company called MIRS (Motorola Integrated Radio Services) has about 155,000 subscribers, or 2.5% of Israel's population and uses an advanced form of two-way radio communications to provide a service that combines radio dispatch, cellular phone, pager and mobile PC services. MIRS' iDEN (integrated digital enhanced network) or Tetra technology runs at 95 kilobytes per second and enables users to e-mail and access some Internet portals[41]. The Internet About one million Israelis use the Internet on a regular basis, and the number is growing annually at a rate of roughly 30%. However, while the number of PCs per household is a high 60%, the Internet penetration rate is relatively low compared to Britain and United States. The lower internet penetration rate is attributed to language barriers (most of the Internet is in English), high tariffs and the absence of high-speed Internet access in private homes. The first Internet Service Provider (ISP), Netvision, began selling access to the Internet in 1994. There are now more than 30 Israeli ISP's with four companies leading the market: Internet Gold has about 175,000 subscribers, Netvision about 140,000, Bezeq International about 60,000 and Barak about 40,000.
The original seven cable TV broadcasters have now been slimmed down through mergers to three - Matav, Tevel and Golden Channels - each with a monopoly in its own geographic area. Some 70% of households subscribe to cable television, which provides scores of channels, offering a mix of local and foreign programming, much of it catering to select audiences (children, English, Russian and Arabic speakers, and the like). The cable TV sector employs about 1,000 people, and over the years has invested some $600 million in infrastructure, including 800 kilometers of fiber-optic cable. The three cable television operators offer 50-channel, 550/750Mhz systems to their customers that utilize fiber-based feeders and "tree and branch" coaxial distribution systems. Matav and Tevel's cable transmission networks are capable of supporting both broadcast transmission and two-way data transmission, for telecommunications and computer networking. Their return channels will allow for interactive services such as Internet access. The cable companies are expected to become major players in the newly de-monopolized domestic fixed-line arena. Cable companies are already upgrading their networks for the new era [41]. Satellite TV Israel is one of the few countries in the world to design, build, launch and operate its own satellites. AMOS, the first commercial telecommunications satellite was launched in 1996. It was designed and manufactured by Israel Aircraft Industries Ltd. in cooperation with foreign companies. AMOS provides domestic services for television, radio, and data transmission using 7 KU band transponders. AMOS satellite has two beams, one focused on Israel and the Middle East, the other on Eastern Europe. Israel's first direct broadcast satellite (DBS) station began operating in 2000 and a second commercial broadcast channel by the end of 2001 [41]. The total annual telecom equipment and services market in Israel is estimated at $3.7 billion consisting of following segments[17]:
Regulatory Environment Two new facility-based international telecommunications services operators began activities in July, 1997, thus ending Bezeq's monopoly in this field. These new service providers, along with Bezeq International, are offering the Israeli public tariffs which are among the lowest in the world.
Ministry of Communications performs such functions as fixing tariffs, allocating frequencies and setting policy. In addition, the Ministry of Finance, the anti-trust authority and other government bodies are involved in additional aspects of industry regulation. Major regulatory decisions, such as tariff policy or reform of an industry segment, are usually made by specially appointed government committees[18]. Liberalization A special Inter-ministerial Committee, The Rosenne Committee, appointed by the Minister of Communications, was responsible for providing recommendations for implementing the government's liberalization policy of the local telecommunications sector. Bezeq lost its exclusive rights in June 1999 in the domestic fixed services market in terms of infrastructure, transmission and telephony. The Israel Broadcasting Authority operates two national television networks, seven national AM/FM radio networks, and 14 local FM radio stations, of which licenses were obtained by public tender. TV and radio sectors were also liberalized based on the "Open Skies" initiative. Privatization procedures of Government owned companies in Israel are regulated by the Government Companies Law, under which the Government Companies Authority operates. Major privatization efforts are listed below:
Future major privatization processes in the pipeline for 2005-2006 are:
The goal is to split the monopoly into two competing oil refineries. Ashdod Oil Refinery is planned to be sold by private sale and Haifa Oil Refinery to be made public in the Tel-Aviv Stock Exchange.
100% of the Company to be sold by private sale.
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The number of Internet hosts, while high by overall world standards, is relatively low for such an advanced economy. With about 24.5 hosts per 1,000 inhabitants, Israel is ahead of Japan (20.8) and France (20.9), but well behind leaders like the U.S. (193) and Britain (125). Industry experts attribute the low figure to the fact that standard web browsers were not designed for right-to-left languages like Hebrew. Companies took a long time to agree on a standard technology to deliver Hebrew content online, and even this requires users to set up their browsers to read Hebrew characters. Seven local Hebrew-language portals exist, but these gateways to the Internet are generally tailored to foreign markets around the globe, not necessarily local e-commerce © Copyright 2006 Anoop Samuel. All Rights Reserved.