2014
Embassy of India, Tel Aviv
Commercial Wing
The Telecommunications Sector in Israel
Preliminary Market Analysis
Embassy of India, Tel Aviv
Commercial Wing
140 Hayarkon Street,
P.O Box 3368, 61033,
Tel Aviv, Israel
Tel.: +972-3-5291999
commercialwing@indembassy.co.il
Prepared by:
Daniel Shkedi
Marketing Officer
Embassy of India, Tel Aviv
Commercial Wing
Tel Aviv, Israel
29 October 2014
The Telecommunications Sector in Israel
Overview
The telecommunications sector has gradually morphed into an economic growth engine and
fertile ground for commercial activity that indirectly influences almost every sector in the State
of Israel. Over the years, relevant Israeli Ministries strove to develop this sector even more and
to progressively liberalize and privatize the market. These policies continued to evolve during
the mid 1990’s, as the Israeli telecommunications sector transitioned from government owned
monopolies to a new competitive business structure, driven by a wide array of new companies.
Israel’s standing in the global telecommunications market advanced tremendously during the
2000’s, as Israeli companies revolutionized protocols such as WiMAX, VoIP, and TDMoIP.
These developments increased the sector’s annual revenues up to $7.5 billion in 2011 (Source:
Israeli Ministry of Communication).
The telecommunications industry in Israel is comprised of a wide array of companies with
different fields of expertise: semiconductor development, hardware engineering, system
integration and software design. More specifically, over 300 companies are exporting: fiberoptic intelligent cable solutions, home networks, storage area networks, IP networks (data, voice,
multimedia), wireless local loops, video conferencing, video networks, firewalls, 3G
applications, VPNs and routers (Source: Israel Export Institute).
Mobile
 Israel has a high mobile-phone penetration rate, at an estimated 123 subscriptions per 100
people in 2013. Subscriber numbers will rise slowly in 2014-18. The relatively low cost
of usage, an affinity with technological products and strong social ties help to boost
demand for mobile telephony.
 Mobile-phone usage (call minutes per month per phone) is the third-highest in the OECD
(after the US and Canada), at 205 minutes in 2011. Average revenue per user (ARPU)
fell sharply in 2011-13 as regulators imposed cuts in interconnection fees and other
charges.
 Moreover, the entry and expansion of several new providers (following a government
decision to end the oligarchy enjoyed by the three big established companies in 2012) has
led to intensified price competition; after declining sharply in 2013, ARPU fell further in
year-on-year terms in the second quarter of 2014, by 5.4% at Cellcom, 8% at Partner and
7.1% at Pelephone.
 There are currently five mobile-phone operators in Israel, as well as a number of mobile
virtual network operators (MVNOs). All of the five main operators provide countrywide
coverage and advanced network services. Cellcom is the largest mobile provider in the
country, with 3.1m subscribers at the end of 2013. However, this represents a 3% decline
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
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from a year earlier, reflecting the impact of increasingly fierce competition in the local
market.
Cellcom operates a high-speed packet access (HSPA) 3.5G network, enabling advanced
broadband multimedia services. It also offers fixed-line services. Cellcom merged with
Netvision, the country’s largest Internet service provider and international telephone
carrier, in 2011.
Samsung was the most popular make of handset in Israel in 2013, accounting for 34% of
all smartphones sold; however, this was down from 43.7% in the previous year. Apple’s
iPhone was in second place, with market share edging up to 27.7%, from 26.7% in 2012.
Sony’s market share also improved, rising to 8.3% (from 7.6%). Nokia and LG shared
fourth place, each with 6.7% of total sales; both companies saw their market share rise
markedly compared with the previous year, when they stood at 2.9% and 3.7%
respectively.
Selected Israeli Telecom Companies in the Global Market
Amdocs – Amdocs is a global provider of services to more than 250 communication companies
in more than 80 countries. The company focuses on CES (Customer Experience Solutions),
business support systems (BSS), operational support systems (OSS) and network control and
optimization offerings for multiple lines of business, including wireless, wireline, broadband,
cable and satellite services. http://www.amdocs.com/Pages/HomePage.aspx
Gilat Satellites Systems - Gilat Satellite Networks is a leading provider of products and services
for satellite-based broadband communications. The company develops a wide range of highperformance satellite ground segment equipment and VSATs, with a focus on the consumer and
Ka-band market. During the last 25 years, the company has provided over a million products to
more than 85 different countries. http://www.gilat.com/
ECI Telecom - provides communications products and services to carriers and service
providers, cable/multiple system operators, wireless/cellular service providers, utilities and
carrier of carriers, and government and defense entities worldwide. The company focuses on
solutions for multi-play services, business services, voice services, wireless, cellular backhaul,
optical networking, Carrier Ethernet networks, TDM to Ethernet evolution, migration to all IP,
network
security,
carrier
of
carriers
and
wavelength
services.
http://www.ecitele.com/Pages/Default.aspx
Ceragon Networks - Ceragon designs and manufactures high-capacity communication systems
for wireless backhaul – addressing the segment of the cellular market that connects a typical cell
tower or towers to an operator’s core network. Ceragon provides wireless devices based on
microwave with speeds ranging from 5 Mbit/s up to 2 Gbit/s per radio channel.
http://www.ceragon.com/
Embassy of India in Israel | October 2014 | The Telecommunications Sector in Israel
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Audiocodes - AudioCodes designs, develops and sells advanced Voice-over-IP (VoIP),
converged VoIP and Data networking products and communications applications for Service
Providers and Enterprises. The company’s products include: IP Phones, Session Border
Controllers (SBC), Media Gateways, Multi-Service Business Routers (MSBR), Residential
Gateways, Media Servers, mobile communications solutions, value added applications and
professional services. W: http://www.audiocodes.com/
Alvarion - Alvarion provides wireless-based end-to-end solutions including HW
infrastructure and SW based applications. It has designed and manufactures a range of
Wi-Fi solutions, wireless-based Point-to-Point and Point-to-Multipoint technologies. The
company holds over 25,000 sites in over 95 countries and their products include 4G
CPEs, BrezzeACCESS (Wireless broadband access solutions for license-exempt
frequencies serving the variety of applications and BreezeMAX Extreme (WiMAX 16e
wireless broadband technology). W: http://www.alvarion.com/
RAD Data Communications - RAD's research, development and engineering includes
operations, administration and management (OAM) and performance management; service
assurance; traffic management; fault management; synchronization and timing over packet;
TDM pseudo wire; ASIC and FPGA development; hardware miniaturization; SFP form-factor
solutions;and business DSL. http://www.rad.com/
m-Wise - develops, manufactures, markets, and supports software and hardware-based content
and service delivery platform. The company markets its wireless application platform under the
brand, MOMA platform, which is an end-to-end application. http://www.m-wise.com/
Kayote Networks - Kayote Networks, Inc., a telecommunications service company, provides
voice over Internet protocol (VoIP) interconnectivity and interoperability services. It offers
various services that enable providers to exchange Internet telephony voice traffic. The company
provides VoIP Traffic Manager (VTM) platform, a hosted switch that enables Internet telephony
service providers, international long distance providers, cable MSOs, and carriers to outsource
some or all of their VoIP traffic and operations. Kayote Networks, Inc. was founded in 2003 and
is based in Passaic, New Jersey.
Multinational Corporations in Israel
Several leading multinational telecom corporations operate in Israel through subsidiaries and
R&D centers.
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Domestic Communications Market - 2013
Market
Domestic Fixed Services
Mobile Telephony
International Services
Internet Services
Company
Bezeq
Hot Cable Co.
012 Telecom
Cellcom
Partner (Orange)
Globcall
BIT
Pelephone
Cellcom
Partner
Hot Mobile
Golan Telecom
Ramy Levi
Alon Cellular
Home Cellular
012 Smile
Barak-Netvision
Bezeq International
Xfone 018
Telzar
Golan Telecom
Hallo 015
Mirs International
012 Smile
Bezeq International
Barak-Netvision
Golden Lines
A. Fixed Services
Domestic Telephony Operators
Fixed Phone Lines
Total Revenues
Digital Telephone Network (%)
2 general licenses (Bezeq, Hot),
5 special licenses (Cellcom-netvision 013,
Partner012, Bezeq int.,)
2.9 million
$1.5 billion (2011)
100%
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Home-Pass
Broadband Infrastructure Operators
99%
2 (Bezeq and HOT)+a 3rd, FTTH network
being
deployed (using Electric Corporation
infrastructure)
B. Cellular Telephony
Opening of Competition
No. of Operators
Country Coverage
Total Revenues
No. of Subscribers
Penetration Rate
Average ARPU
Average MOU
Date of UMTS Spectrum Auction
No. of UMTS Licenses
UMTS Frequencies Band Price
1995
5 network operators + 9 MVNO licensees (of
whom 3 are already operating as of December
2012)
99% of the Israeli population
$2.91 billion (2012)
9,964,000
132%
$93
426
December 2001, July 2011
5
$45 million (per operator)
C. Internet & Broadband
No. of ISP
Broadband Subscribers
Broadband Penetration
Broadband Penetration per 100 Inhabitants
Broadband Home-Pass
Average Speed
70+ (3 major players)
~1,800,000 (~1,100,000 ADSL, ~700,000 Cable)
80% of households
~25%
99%
10 Mb/s
(Daniel Shkedi)
Marketing Officer
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