State of Israel Ministry of Communications 1 Telecommunications Market in Israel May 2006.

Israel's Telecom January 2001Telecommunications
Presentation Agenda
Israel Demographics
Israel Demographics
ISRAEL Demographics
Telecommunications Market Overview
Regulation
Facility-Based Competition in Israel.
From Monopoly
to Competition
Israel's Telecommunications
Statistics 2005
94
27
67.9
1
"

94
90
45
65
27
67.9
2
2
Israel's Telecommunications
6.5 million mobile customers, on 4 networks.
1.4 million households connected to multi-channel subscriber television
Cable TV: 3 operators, 0.95 million subscribers, 97% of homes passed.
Satellite DTH TV: 1 operator, 0.49 million subscribers.
State of Israel Ministry of Communications
Telecommunications Services Market - 2004
Total telecom services market ~ US$ 5.7 billion, 1998-2004 avg. annual growth of 7%
Fixed services
Broadband Regulation
Facility-Based Competition :
2.5Mb/s downstream).
provided by cable TV firms - the new
entrants (up to 3Mb/s downstream).
Broadband Regulation
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.
1,100,000 broadband lines (730,000 ADSL lines; 370,000 cable modems).
Broadband subscriber growth ~50% last year.
Broadband household penetration 52%.
Broadband
Broadband Subscribers Growth in Israel
330k
Competition
begins
Sub.
Penetration
1
2001
2001
2001
2002
2002
2002
2003
2003
2003
2004
2004
2004
ADSL
2000
0
0.0011413822
38000
0
0.0208827926
150000
57000
0.1112903226
330000
150000
0.2580645161

1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003

100
130
259
562
850
1100
1,100
1,500
1,562
1,750
1,830

0
0
195
600
850
1150
1,450
1,850
2,261
2,440
2,500

0
0
0
0
0
40
355
834
1,458
1,837
1,900

0
0
0
0
0
0
110
160
200
250
255
100
130
454
1,162
1,700
2,200
3,015
4,344
5,481
6,277
6,485
penetration
2%
2%
8%
20%
29%
36%
49%
68%
84%
95%
97%

5300
5470
5612.258
5757.873
5899.952
6041.425
6209.145
6369.266
6508.817
6,600
6,700

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
&A
0
0
0
0
0
0
0
0
0
0
"
%
Source: TASC Ernst & Young
Source
No of MDFs
No MDF sites
Co-mingling mandated
Incumbent DSL Lines
%
%
%
%
- Growth in resale product to end Sept 03
- Growth in wholesale product, since end Sept 03
Growth in DSL interconnection since Dec 02
- Growth in DSL interconnect product to end Sept 03
Difference in total incumbent DSL lines to end Sept 03
% growth
- of which used for broadband - i.e. DSL
OLO shared access lines
Total country DSL Iines
DSL lines of total lines
Cable Internet broadband connections
Total Q3(last scorecard)
U
MDF
Ecta: Irish regulator mentions the availability as 'theoretical'
ECTA: Danish NRA confirms for end of December 03, unless otherwise indicated.
ECTA: Source: Finnish regulator FICORA as of end of December 03, unless otherwise indicated.
ECTA: Source: ART end of December 03, unless otherwise indicated.
ECTA: Source: Belgacom by end of December 03, unless otherwise indicated.
ECTA: Source: ComReg report on wholesale broadband access published 5th March on ComReg website. These data are as of end of Dec 03. Due to sensitivity issues ECTA has not received any figures for OLO DSL lines directly from ComReg. The OLO DSL figures are taken from the CoCom report 04-20.
ECTA: Source: AGCOM and Telecom Italia as of end of December 03, unless otherwise specified.
ECTA: Source: Anacom as of end of December 03, unless otherwise indicated.
ECTA: Source: CMT end of December 03, unless otherwise indicated.
ECTA: Source: PTS as of end of December 03, unless otherwise indicated.
ECTA: Source: RTR as of end of December 03, unless otherwise indicated.
ECTA: Source: ILR end of December 03, unless otherwise indicated.
ECTA: Source: EETT end of December 03 unless otherwise indicated.
Ecta: FT says these are experimental sites.
ECTA: Source: NRA, of these, the majority are with Helsinki TV
ECTA: Source: OFCOM end of December 03, unless otherwise indicated.
Ecta: Source: ASTEL Spanish new entrant association Oct 01 Telefonica says that another exchange is opening at the moment.
Ecta: Source: Italian regulator per Sept 01. However, the opened MDFs cover more than 50% of lines.
ECTA: including a growing amount of ISDN lines.
ECTA: Approximation based on figure for Telenet at 417.000 and an earlier figure 26.800 from UPC website, as well as a figure 8.000 for Coditel as of July 03 and an estimate of 30.000 for Brutele.
ECTA: Source: RTR estimate.
ECTA: Source: NRA estimate. This data is not collected officially. License is not needed for this.
ECTA: Source: Telecom Italia, the number refers to sites made available for unbundling by the NRA.
ECTA: Source KPN end of December 03, unless otherwise indicated.
ECTA: Telecom Italia says there are 577 MDFs from which Telecom Italia has received orders of LLU by OLOs. Sept 03.
ECTA: Source: NRA 1.1.2004 WLL 2600 PLC 600
ECTA: OFCOM says FWA and satellite end Dec 2003.
ECTA: Ficora gives this as the total number of telephone concentrator sites. 3627 of them have less than 200 telephone subscribers. 641 have more than 200 but less than 500 and 615 have more than 500 subscribers.
ECTA: This column is added for reasons of comparision. The figures of other broadband infrastructure are approximations,
ECTA: Source: NRA - includes PSTN, ISDN2, ISDN30.
ECTA: OPTA says co-mingling is mandated in one specific disputesregarding one specific location.
ECTA: FWA and satellite.
ECTA: Telecom Italia sells wholesale lines to other operators/ISPs through a lot mechanism, so that some of the sold lines are not actually active. The figure presented here represents the active lines, given by AGCOM.
ECTA: This column shows the DSL lines which are sold to the customer by the incumbent directly and/or by the incumbent’s wholly or majority owned ISP. This column also shows lines of DSL access which are retailed directly by the incumbent with the ISP elements needing to be purchased separately by consumers.
ECTA: These are connections based wholly on the incumbents DSL infrastructure. These products include not only local access and regional backhaul, but also connectivity to the Internet – in other words an ISP using such a product manages no network elements and is a pure reseller or “VISP” (virtual ISP). In some cases an ISP will be a forced reseller as the access component may be tied to the Internet connectivity element, and in others an ISP may have had a choice but procured both elements from the incumbent for reasons for cost or convenience. In either case, the retail products will be identical in all technical respects.
ECTA: This column shows DSL lines over a wholesale product where there is essentially no ability to control or configure the parameters of the access connection. The incumbent defines the speed and contention of the access connection, but perhaps provides a limited set of speeds that all retail products end up reproducing. Typically such products will involve an IP handover at either the regional or national level and would enable some retail product differentiation based on the choice of national backhaul and/or Internet connectivity provider.
ECTA: This column shows DSL lines via a product where the interconnecting operator can influence the speed (and other Quality of Service elements) available over the access network. Handover would typically (but not necessarily) be at the regional level, enabling further differentiation through the choice of backhaul and Internet connectivity provider(s). In most cases this would be the product with handover on the ATM level where that is technically feasible (which also enables differentiation by opening up competition in the provision of the broadband access server).
ECTA: NRA says these are other LL and Fixed Wireless Access.
ECTA: KPN estimates that around 74% of all OLO unbundled DSL lines are through shared access.
ECTA: End of Dec 03 figures from the RegTP report, on website.
ECTA: Includes both ULL DSL growth and growth in shared access.
ECTA: These are bitstream with voice (46.846) and bitstream without voice (491), with the BROBA II offer.
ECTA: Includes KPN direct retail and aDSL product re-sold by its own ISP and other ISPs. These lines are counted as incumbent retail as the Internet access is billed directly to KPN.
ECTA: ITST says that Co-location is mandated but not specfic types thereof.
ECTA: This is an estimate by the NRA.
ECTA: This is an estimate by the NRA.
ECTA: Partly based on estimate by the NRA.
ECTA: This figure is based on an estimate by the NRA. Pure incumbent/OLO figures are difficult to obtain in Finland, as regional incumbents are often OLOs in each others' areas.
ECTA: This information was collected in Q2 2003.
ECTA: OFCOM: incl.Kingston
ECTA: OFCOM: incl.Kingston
ECTA: Source: RTR. Figure announceed in Telekom Austria press release.
ECTA: NRA says colocation is mandated but not specific types thereof.
ECTA: Not possible to compare due to readjustment since the last scorecard.
ECTA: NRA estimate.
ECTA: NRA says approximatelu 4000 DSL lines have been shared by the end users with HomePNA technology. Each of the DSL lines has 20 end users (average).
ECTA: NRA figure by end 2002.
ECTA: NRA: residential and business.
ECTA: NRA: residential and business.
ECTA: Includes FWA, leased lines and other broadband lines.
ECTA: Only GigADSL lines are listed here by the NRA.
ECTA: Source: AGCOM end of 03. Additonally, there are 337.400 3G lines.
ECTA: Source: KPN estimate.
ECTA: Includes 147.522 lines sold by TI Media.
ECTA: Compared to data from AGCOM, not the ECTA scorecard Q3.
ECTA: Includes local exchanges (LECs) and remote concentrators (LDCs). Both of these categories have MDFs.
ECTA: Using AGCOM data, not the last ECTA scorecard.
ECTA: As of June 03.
ECTA: As of June 03.
ECTA: Megabase lines, IP-tunneled. The CMT classification of these lines differs from ECTA's.
ECTA: Megavia lines.
ECTA: Calculation based on ComReg report and CoCom report.
ECTA: Calculation based on the ComReg report and the CoCom report.
ECTA: According to CoCom report
AmiG: UN 2000
Data
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
250000
OECD Broadband Penetration at end of 2004
Israel
Bezeq in process of
Annual sales ~2.2 billion US $ (inc.
subsidiaries)
May 2005 the government sold its holdings:
30% + options of additional 10.66% to financial/strategic investor for 972 mill’ US$
Cable TV firms -
the new entrants
Cable Modem broadband Internet services (64Kb/s – 3Mb/s).
Interactive TV
Universal IP telephony
Bridging The Digital Divide
Regulation
Can regulation help to increase broadband penetration in rural areas and achieve universal coverage?
EU Regulation
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.
Broadband Universal
USO by two players in Israel; both have countrywide infrastructures.
The critical stage: defining USO in the license before granting it to the operators.
Broadband Universal
Service Obligation (USO)
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.
Israeli consumers are early adaptors of internet technologies, including instant messaging, online services (e-banking, etc.), and VoIP:
The Internet Environment in Israel
Skype users per 1000 inhabitants
source: company data, from OECD Working Paper
Public Internet Access (PIA) in Israel
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.
Public Internet Access (PIA) in Israel
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.
PIA Projects in Israel
Solutions for Rural Areas
rural and remote areas.
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 successful solutions for rural areas.
Conclusions
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.
Mobile
Services
2005 – 6.5 million sub. On 4 networks all with USO
Future plans - Numbers portability - 2006
Will 3G Succeed
Relatively wealthy country.
Favorable auction price
Each service country-wide availability - 24mo after initial commercialization.
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!
International Long Distance
Facilities Based Competition Introduced July 1997: The incumbent, 2 privately – owned new service providers.
2004 – additional 3 operators.
The End
For more information
2%
8%
10%
11%
11%
14%
14%
15%
16%
19%
19%
22%
25%
25%
27%
31%
73%
47%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Greece
Ireland
Luxembourg
Italy
Germany
UK
Portugal
France
Spain
Finland
Austria
Sweden
USA
Netherlands
Denmark
Belgium
Israel
03
Israel
04
Korea

State of Israel Ministry of Communications 1 Telecommunications Market in Israel May 2006.

Documents

Transcript of State of Israel Ministry of Communications 1 Telecommunications Market in Israel May 2006.