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Telecommunications Industry in Israel august 2002. Ministry of Communications. Presentation Agenda. Israel Demographics & ICT Statistics Telecommunications Industry Telecommunications Market Overview. Israel Demographics & ICT Statistics. ISRAEL Demographics. Population ~ 6.5 million.

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presentation agenda
Presentation Agenda
  • Israel Demographics & ICT Statistics
  • Telecommunications Industry
  • Telecommunications Market Overview
israel demographics
ISRAEL Demographics
  • Population ~ 6.5 million.
  • Households ~ 1.8 million.
  • Average family ~ 3.6 persons.
israel s ict sector 2000 information communications technology
Israel’s ICT Sector - 2000(Information & Communications Technology)
  • Israeli ICT GDP grew from NIS 8.7 billion in

1990 to NIS 39 billion in 2000, 20% of business

sector GDP.

  • ICT GDP is 14.3% of total GDP.

OECD highest - compared to 10-11% in US.

  • Investment in ICT research and

development is 23% of the ICT GDP.

OECD highest - compared to 16-17% in Finland.

  • 148,000 employees.

Source: CBS, 2001

israel s telecommunications
Israel's Telecommunications
  • 3.2 million main telephone lines (50% penetration, more than 95% of households)
  • 5.5 million mobile customers, on 4 networks (85% penetration)
  • 1.5 million households connected to multi-channel subscriber television
    • Cable TV: 3 operators, 1.2 million subscribers, 70% of homes passed, 95% household coverage.
    • Satellite DTH TV: 1 operator, 0.3 million subscribers
israel s electronics industries source iaei 2002
Israel's Electronics IndustriesSource: IAEI, 2002
  • Combined 2001 sales - $14.25 billion, of which $11.75 billion were exports sales.
  • Highly skilled workforce - 62,000 employees, including over 63% scientists, engineers & technicians.
  • Sales per employee - over $230,000.
total 2001 sales 14 25 billion source iaei 2002
Total 2001 Sales – $14.25 billionSource: IAEI, 2002

Software

21%

Telecommunications

29.6%

Defense

Systems

15%

Industrial &

Medical Systems

17.7%

Components

16.7%

leading israeli telecommunications electronics companies
Leading Israeli Telecommunications & Electronics Companies

CompanySales 2001Line of Business

(US$M)

Intel Electronics (Israel) 1614 Semiconductors

Motorola Israel 1278 Communications & Semiconductors

Vishay Israel 1182 Electronics & Electricity

E C I 1170 Telecommunications

Comverce 710 Telecommunications & Electronics

Gilat Satellite Networks 505 Satellites Communications

Telrad 470 Telecommunications

Check Point 425 Software

Formula 406 Software

R A D 190 Telecommunications & Electronics

industry excellence areas
Industry Excellence Areas
  • Telecommunications – networking & network management, billing, Internet, video & image processing, wireless, satellite communications, access networks, broadband & photonics, network security & VPN’s, messaging, home networking.
  • Computerized production equipment & imaging.
  • Software.
  • Semiconductors & photonic components.
  • Defense systems – missiles, anti-missiles & guided weapons, opto-electronics, radars, C4I, EW (Electronic Warfare), simulation, training.
statistical highlights source iaei 2002
Statistical HighlightsSource: IAEI, 2002

Electronics All Other

Industries Industries

Exports

[% of total sales] 82 25

Added value [%] 68 42

Scientist, engineers

& technicians [%] 63 14

Employees in R&D [%] 12 2

major r d efforts stretching boundaries of imagination ingenuity
Major R&D EffortsStretching Boundaries of Imagination & Ingenuity
  • Innovative synergistic industry-academy cooperation, supported by the Chief Scientist, Ministry of Industry & Trade.
  • Over 100 industrial & academic participants.
  • Focused on establishment of the technological infrastructure for the next generation.
  • Key telecommunications R&D activities:
  • Digital wireless
  • Satellite systems
  • Broadband & optical technology
  • Internet & Multimedia
  • Telemedicine
  • Microelectronics
  • Network management
technology start ups
Technology Start-ups
  • Israel is one of the largest world centers for start-up enterprises, with ~2000 active start-ups.
  • Innovative, technology-intensive activity, representing several technology breakthroughs.
  • Major international activity:
    • Strategic alliances and joint ventures.
    • Raising capital - venture, seed & risk investments.
venture capital source ivc research center themarker 27 january 2002
Venture CapitalSource: IVC Research Center (TheMarker, 27 January 2002)
  • Investments by venture capital funds constitute an added value above financial contributions - in management, world market familiarity, strategic guidance and economic credibility.
  • During 2001, 526 Israeli companies raised $2.0 billion (compared to 513 companies & $3.1 billion during 2000).
  • 40% ($812 million) was invested by Israeli venture capital funds.
  • The active sectors are communications (42%), software (20%), life sciences (14%) & Internet (9%).
telecom israel 2002 exhibition and conference the future is here

Telecom Israel 2002 Exhibition and Conference:The Future is Here

Tel-Aviv, 4-7 November, 2002

For more informationTelecom Israel 2002:http://www.telecom2002.co.il

telecom israel 2002 event tel aviv 4 7 november 2002
Telecom-Israel 2002 EventTel-Aviv, 4-7 November, 2002
  • Important international exhibition & conference:
    • Exhibition: 4-7 November 2002
    • Conference: 5-7 November 2002
  • A showcase of hottest technologies and applications.
  • The place to see how new technologies, products, services and issues are reshaping the world of communications.
  • The future is here - Wherever you look, across the globe, Israel’s born products stand up.
  • We invite you to witness for yourself!
telecom israel 2002 conference program preliminary
Telecom Israel 2002 Conference Program (preliminary)

Tuesday, 5 Nov. Wednesday, 6 Nov. Thursday, 7 Nov.

Telecom, IT & Media at the Crossroad: Challenges and Opportunities

After the Hype - Sober View of the IT, Telecoms and Media Industries

Information is Power

Civilian & Military Information Security at the Turn of the Century

BB and 3G - is the Future Bright?

The Drivers for Successful Broadband Fixed and Mobile Implementation

The New Mobile World - Will Mobile Operators Make the Change From Voice to Multimedia?

Network Infrastructure in a Competitive World - All Optical Core

Telecom and Content Regulation - Critical Must or Unnecessary Burden?

Delivering Business Services - The New Generation Application Service Provider

Broadband Fixed & Mobile Access Networks - Will the Bottleneck Open?

Government & Business Collaboration - Government Incentives and Business Motivation Support for Technology Development

Intelligent Buildings and Home Networking - Towards Networked Home?

Interactive Entertainment - Is There More than Sex, Shopping and Games?

Network Infrastructure in a Competitive World - Next Generation Network: All IP Switching and Service Delivery

The Future of Fixed Services Competition - Is There Opportunity for CLEC’s?

Service and Network Security in an Open Broadband World

Consumer and Business Applications - The Future of B2C Retailing and B2B Trading

New Horizons for Internet Technology - What is the Next Big Thing?

Israel Telecommunications Market - Will the Growth Continue?

Managing Customer Relationship - Adding Value Through Customer Management

Startups and Venture Capital - Investments in the Future of Israel’s Technology

Fixed Mobile Convergence - Bundling or Bumbling?

telecommunications services market 2001
Telecommunications Services Market - 2001

Cable

TV

International

Long-Distance

Internet services

Terminal Equipment

& Business Systems

4%

2%

7%

9%

Mobile

Services

52%

Fixed

Services

26%

Total telecom services market ~ US $5 billion

internet users across the world 2001
Internet Users Across The World 2001

Country average (31%)

Percentage of total adult population

Percentage of the population who have personally used the Internet during the past month

Source: Tayler Nelson Sofres Interactive – Global eCommerce Report 2001

slide22

Broad Band

  • 100,000 ADSL lines, 15,000 Cable modems.
  • Competition launched January 2002.
  • Subscribers growth ~175% in the last 8 month.
  • Households penetration ~6%.
regulatory policy
Regulatory Policy
  • Public interest - the main issue
  • Competition - the key for innovation, entrepreneurship, investment & growth.
  • Key action areas:
    • Liberalization.
    • Re-regulation.
    • Privatization.
regulation ideology
Regulation Ideology
  • Free and competitive markets promote growth, efficiency, customer satisfaction & economic advantage.
  • Market restructuring, in transition from monopoly to open and free market, during a short time period, requires active and balanced regulatory intervention.
  • Once competitive marketplace is achieved, a strong regulator will provide unnecessary intervention, and should be abolished.
slide25

From Monopoly to Competition

1994

2000

2002 +

  • Pelephone
  • Cellcom
  • Partner
  • MIRS
  • Pelephone
  • Cellcom
  • Partner
  • Pelephone

(Bezeq)

Mobile

Services

  • Bezeq
  • Cable Companies
  • Others:
    • Wireline
    • Wireless

Fixed

Services

(Infrastructure, Transmission & Telephony)

  • Bezeq
  • Bezeq
  • Bezeq-International
  • Barak
  • Golden-Lines
  • Additional operators

International

Long Distance

Services

  • Bezeq-International
  • Barak
  • Golden-Lines
  • Bezeq
bezeq consortium

yes

Direct

Broadcasting

Satellite

(44.9%)

Bezeq Call

Communications

CPE &

Business

Solutions

(100%)

Bezeq Consortium

Bezeq Online

Call Center

(100%)

Walla!

Communications

Portal & web

hosting

(36.7% by BI)

Bezeq

International ILD & Internet

(100%)

Pelephone

Mobile Services

(50%)

Bezeq

Fixed Services

& Infrastructure

(Holding Company)

bidding for majority stake in bezeq
Bidding for Majority Stake in Bezeq
  • Israel’s incumbent telecommunications operator.
  • annual sales ~2 billion US $.
  • 11,000 employees (8,500 in Bezeq, The parent company).
  • Government holds 54.6% of Bezeq shares (remaining shares - publicly held).
  • Government issued a formal tender, for private sale of 50.01% of the share capital of Bezeq.
  • Six groups filed applications at 13 February 2002.
  • The process is planned to be completed in 6 months.
incumbent main services technologies
Incumbent main services & technologies
  • 100% digital exchanges & transmission (mainly SDH).
  • Interconnection with mobile & ILD operators.
  • ISDN & ADSL Access.
  • Data Network – TDM, F.R, ATM, 64Kb/s – 622Mb/s.
cable tv firms the new entrants
Cable TV firms - the new entrants
  • Fully digitized HFC networks (750MHz).
  • Cable Modem broadband Internet services (64Kb/s – 2Mb/s).
  • Interactive TV
  • T- mail, T- commerce.
  • Future plans – IP telephony and data services over cable.
mobile technologies key trends
Mobile Technologies: key trends
  • New services:
    • SMS (interoperable), WAP, SHTML wireless internet.
    • Content: news, media & data services.
    • Location based services.
    • M(obile) – Commerce

(vending machines, parking,

gas station,etc).

2g 3g mobile license auctions
2G/3G Mobile License Auctions
  • MSR (Multiple Simultaneous Round) combined auction.
  • Frequency packages:
    • 4 Bands: 2G FDD, 2x10 MHz.
    • 4 Bands: 3G FDD, 2x10 MHz.

3G TDD: 5 MHz (for 3 packages only).

  • Reserve price: 2G: US $45M. 3G: US$55M.
  • Tender published: 28 March 2001.
  • 18 December 2001 auction produced NIS 1,026 million.
why will 3g succeed in israel
Why Will 3G Succeed in Israel?
  • Israel is well suited for 3G:
    • Relatively wealthy country (~$20K GDP/cap).
    • Technology literate.
    • High mobile penetration, extremely high usage.
  • Favorable auction price - $42/pop

Germany $544, UK $537, France $287, Italy $211, Ireland $211, Austria $91, Denmark $80.

  • Light rollout requirements:
    • Operators do not have to launch services unless they are sure they will succeed.
    • Each service country-wide availability - 24mo after initial commercialization.
slide36

International Long DistanceservicesFacilities Based Competition Introduced July 19971 state – owned, 2 privately – owned service providers

submarine optical cables infrastructure
Submarine Optical Cables Infrastructure

EMOS

CIOS

Cable RFCS Capacity

EMOS 1990 280 Mb/s

CIOS 1994 622 Mb/s

LEV 1998 5 Gb/s

MN1 2001 3.84 Tb/s

LEV

MED

Nautilus 1

the israel internet 2 network
The Israel Internet-2 Network
  • Part of the global research network for the NGI (Next Generation Internet).
  • Connecting Israel to the forefront of scientific and industrial R&D, through:
    • StarTap - US NSF/I-2/NGI interconnection point.
    • Géant – The pan-European Gigabit research network.
  • 45 Mb/s connection to Géant (London), 45 Mb/s connection to StarTap (Chicago).
  • 10 Mb/s & 155 Mb/s IP, ATM & SDH domestic connectivity.
  • http://www.internet-2.org.il
civilian telecommunications satellites
Civilian Telecommunications Satellites
  • AMOS-1: TV distribution, SNG & VSAT
    • launched May 1996.
    • Geostationary orbit at 4o West.
    • 7 transponders, covering Middle East & Central Europe.
    • Designed, manufactured and controlled by Israel Aircraft Industries.
  • Gurwin-II TechSAT: communications, remote sensing & research
    • Launched July 1998.
    • 830 km altitude sun-synchronous circular orbit.
    • 50 kg, 3-axis stabilized Earth-pointing microsat.
    • Designed, manufactured and controlled by the

Technion - Israel Institute of Technology.

amos 2 satellite
Amos 2 Satellite
  • Launch Planned for Q2 2003.
  • Geostationary orbit at 4o West (co-located with AMOS 1).
  • 11 active transponders & 3 backup transponders, 72 MHz bandwidth each.
  • High power - planned for DTH TV distribution, two-way Internet services and broadband VSAT networks.
  • 3 spot beams:
    • Middle East - supporting up to 11 transponders.
    • Europe - supporting up to 6 transponders.
    • US East coast - supporting up to 8 transponders.
  • Designed, manufactured and controlled by Israel Aircraft Industries.
  • Owned & operated by Spacecom Ltd.
the end
The End

Thank you for your attention

For more information

http:/www.moc.gov.il