Transcript Israel's Telecom January 2001

State of Israel
Ministry of Communications
Telecommunications
Market in Israel
May 2006
1
State of Israel
Presentation Agenda
Ministry of Communications
 Israel Demographics
 Telecommunications Market Overview
 Bridging The Digital Divide
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State of Israel
Ministry of Communications
Israel Demographics
3
State of Israel
ISRAEL Demographics
Ministry of Communications
 Population ~ 6.9 million.
 Households ~ 1.9 million.
 Average family ~ 3.6 persons.
4
State of Israel
Ministry of Communications
Telecommunications
Market Overview
5
State of Israel
Regulation
Ministry of Communications
 Free and competitive markets promote growth,
efficiency,customer satisfaction & wide
geographical coverage.
 Facility-Based Competition in Israel.
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From Monopoly
to Competition
Mobile
Services
Fixed
Services
(Infrastructure,
Transmission
& Telephony)
International
Long
Distance
Services
State of Israel
Ministry of Communications
1994
2000
2005 +
 Pelephone
(Bezeq)
Pelephone
Cellcom
Partner
Pelephone
Cellcom
Partner
MIRS
 Bezeq
 Bezeq
 Bezeq
Bezeq-International
Barak
Golden-Lines
Bezeq
Cable Companies
Others: VOB
Bezeq-International
Barak
Golden-Lines
Internet-Gold
X-Phone
Netvision
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Israel's Telecommunications
Statistics 2005
State of Israel
Ministry of Communications
Penetration Rates
75%
52%
broadband to
households
75%
75%
95%
97%
phone lines to
households
m obile per 100
inhabitents
55%
internet to
households
internet to
businesses
digital
households to
m ultichannel tv
cable tv
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Israel's Telecommunications
State of Israel
Ministry of Communications
 2.9 million main telephone lines.
 6.5 million mobile customers, on 4 networks.
 1.4 million households connected to multichannel subscriber television
 Cable TV: 3 operators, 0.95 million
subscribers, 97% of homes passed.
 Satellite DTH TV: 1 operator, 0.49 million
subscribers.
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Telecommunications
Services Market - 2004
Business Systems
2.4%
Internet services
4.7%
Mobile
Services
54.6%
State of Israel
Ministry of Communications
International
Long-Distance
5.8%
Cable & Satellite
TV
12.0%
Fixed
Services
20.5%
Total telecom services market ~ US$ 5.7 billion,
1998-2004 avg. annual growth of 7%
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State of Israel
Ministry of Communications
Fixed services
Driven by Broadband Demand
Actual competition started Q2 2002
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State of Israel
Broadband Regulation
Ministry of Communications
 Facility-Based Competition :
1. ADSL Access provided by Bezeq (up to
2.5Mb/s downstream).
2. Cable Modem broadband Internet services
provided by cable TV firms - the new
entrants (up to 3Mb/s downstream).
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State of Israel
Broadband Regulation
Ministry of Communications
 Universal Service Obligation (USO) by two
players; both have countrywide infrastructures
(100% pop. coverage by 4 years).
 Unlicensed usage of the 2.4 & 5 Ghz WLAN
technology as a step of maximizing the Internet
usage in the country.
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Broadband
State of Israel
Ministry of Communications
1,100,000 broadband lines (730,000
ADSL lines; 370,000 cable modems).
Broadband subscriber growth ~50% last
year.
Broadband household penetration 52%.
Broadband penetration per 100
inhabitants 16%.
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Broadband Subscribers Growth in Israel
300,000
200,000
100,000
0
655 k
Competition
begins
430 k
40%
330k
210 k
150 k
38 k
50%
30%
20%
10%
57 k
0%
2001
ADSL
2002
CABLE MODEM
2003
2004
Households' Penetration
Penetration
Sub.
700,000
600,000
500,000
400,000
Households` Broadband Penetration (end 2003))
80%
73%
70%
60%
50%
47%
31%
27%25% 25%
22%
19% 19%
16%15%14% 14%
11%11%
40%
Households` Broadband Penetration (June 2003)30%
20%
10% 8%
2%
10%
Ko
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Source: ECTA, MoC Israel
Source TASC Ernst & Young
Source:
June 2004
2004
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OECD Broadband Penetration at end of 2004
OECD Broadband subscribers per 100 inhabitants, by technology, December 2004
30
DSL
20
10
Source: OECD
Cable
Other
25
Israel
15
OECD average
5
0
Bezeq in process of
privatization
State of Israel
Ministry of Communications
 Israel’s incumbent telecommunications operator.
 Annual sales ~2.2 billion US $ (inc.
subsidiaries)
 Government holds 46% of Bezeq shares.
 May 2005 the government sold its holdings:
30% + options of additional 10.66% to
financial/strategic investor for 972 mill’ US$
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Cable TV firms the new entrants
State of Israel
Ministry of Communications
 Fully digitized HFC networks
(750MHz).
 Cable Modem broadband Internet
services (64Kb/s – 3Mb/s).
 Interactive TV
 Data services, T- mail, T- commerce.
 Universal IP telephony
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State of Israel
Ministry of Communications
Bridging The
Digital Divide
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State of Israel
Regulation
Ministry of Communications
Can regulation help to increase
broadband penetration in rural
areas and achieve universal
coverage?
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State of Israel
EU Regulation
Ministry of Communications
The EU framework does not include
broadband as part of the Universal
Service Obligation (USO).
We believe this assumption needs to
be challenged and reexamined.
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Broadband Universal
Service Obligation (USO)
State of Israel
Ministry of Communications
USO by two players in Israel; both have
countrywide infrastructures.
The critical stage: defining USO in the
license before granting it to the
operators.
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Broadband Universal
Service Obligation (USO)
State of Israel
Ministry of Communications
Actual coverage: by the end of
2004 - 99% of incumbent’s lines.
Special exceptions committee.
Israel is one of the few countries
that has adopted a broadband
USO.
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The Internet Environment in Israel
Israeli consumers are early adaptors of internet technologies,
including instant messaging, online services (e-banking, etc.),
and VoIP:
Skype users per 1000 inhabitants
source: company data, from OECD Working Paper
Public Internet
Access (PIA) in Israel
State of Israel
Ministry of Communications
 The importance of PIA: service
provision to inaccessible
population due to coverage or cost
problems.
 Relatively easy implementation of
public broadband access all over
Israel – In light of USO of two
infrastructures and high
broadband penetration.
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Public Internet Access
(PIA) in Israel
State of Israel
Ministry of Communications
 PIA is accessible in education institutes,
public libraries, community centers etc., but
much remains to be done.
 Several examples of PIA existing projects:
 Tapuah (Apple) the Israeli society for the
Advancement of the Information Age;
 Lehava (Flame) governmental project bridging the digital divide within the
Israeli society;
 Connecting high schools to broadband by
ADSL.
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PIA Projects in Israel
Apple
State of Israel
Ministry of Communications
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Solutions for Rural
Areas
State of Israel
Ministry of Communications
 Israeli vendors` solutions helped to reach
rural and remote areas.
 Israel’s broadband USO & internet public
access models work well in a small, populated
country.
For larger countries, which are less populated,
other models are much more suitable.
 For such countries, Israeli companies including
Gilat Satellite Networks , Alvarion, Spacecom,
and IP Planet network offer several proven and
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successful solutions for rural areas.
State of Israel
Conclusions
Ministry of Communications
Wide geographical competition is the best way
to improve the incumbent’s coverage, grade of
service, price performance and overall
penetration to the benefit & welfare of the
society.
Such regulation, we believe, can help increase
the level of competition in the field of
broadband access and narrow significantly the
digital divide within the country.
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State of Israel
Ministry of Communications
Mobile
Services
Competition Introduced
December 1994 with 130K sub,
2005 – 6.5 million sub. On 4 networks all with USO
Future plans - Numbers portability - 2006
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Will 3G Succeed
in Israel?
State of Israel
Ministry of Communications
 Israel is well suited for 3G:
 Relatively wealthy country.
 Technology literate.
 High mobile penetration, extremely high
usage.
 Heavy foreign Investments in mobile market.
 Favorable auction price
 Services launched by operators in recent
months
 Each service country-wide availability - 24mo
after initial commercialization.
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3G Regulation
 In the coming years 3G UMTS networks will be able to
offer internet access of up to 2Mb/s and a wide variety of
services & contents inc. multimedia applications, games,
video etc.
 Today there is no debate about the economic rationale of
establishing 3G networks; Equipment is cheaper than
GSM equipment was at its first steps.
 Commercial networks have been launched all over Europe
and Israel in 2004.
 Cellular penetration is much higher than the penetration
of computers; thus 3G may prove to be a very essential
medium to increase broadband penetration.
 Conclusion: today 3G USO is important!
State of Israel
Ministry of Communications
International Long
Distance
services
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State of Israel
Ministry of Communications
Facilities Based Competition Introduced
July 1997: The incumbent, 2 privately –
owned new service providers.
2004 – additional 3 operators.
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State of Israel
Ministry of Communications
The End
Thank you for your attention
For more information
http:/www.moc.gov.il
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