Telecommunications Industry in Israel august 2002
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Transcript of Telecommunications Industry in Israel august 2002
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State of Israel
Ministry of Communications
TelecommunicationsIndustry in Israel
august 2002
Ministry of Communications
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State of Israel
Ministry of CommunicationsPresentation Agenda
Israel Demographics & ICT Statistics
Telecommunications Industry
Telecommunications Market Overview
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State of Israel
Ministry of Communications
Israel Demographics&
ICT Statistics
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State of Israel
Ministry of CommunicationsISRAEL Demographics
Population ~ 6.5 million.
Households ~ 1.8 million.
Average family ~ 3.6 persons.
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State of Israel
Ministry of CommunicationsIsrael’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
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State of Israel
Ministry of CommunicationsIsrael'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
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State of Israel
Ministry of Communications
Telecommunications Industry
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State of Israel
Ministry of Communications
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.
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State of Israel
Ministry of CommunicationsTotal 2001 Sales – $14.25 billion
Source: IAEI, 2002
Defense Systems15%
Components16.7%
Telecommunications29.6%
Software21%
Industrial &Medical Systems
17.7%
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State of Israel
Ministry of Communications
Leading Israeli Telecommunications & Electronics Companies
Company Sales 2001 Line of Business (US$M)
Intel Electronics (Israel) 1614 SemiconductorsMotorola Israel 1278 Communications & SemiconductorsVishay Israel 1182 Electronics & ElectricityE C I 1170 TelecommunicationsComverce 710 Telecommunications & ElectronicsGilat Satellite Networks 505 Satellites CommunicationsTelrad 470 TelecommunicationsCheck Point 425 Software Formula 406 Software R A D 190 Telecommunications & Electronics
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State of Israel
Ministry of CommunicationsIndustry 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.
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State of Israel
Ministry of CommunicationsStatistical Highlights
Source: IAEI, 2002
Electronics All OtherIndustries Industries
Exports[% of total sales] 82 25
Added value [%] 68 42
Scientist, engineers& technicians [%] 63 14
Employees in R&D [%] 12 2
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State of Israel
Ministry of CommunicationsMajor R&D Efforts
Stretching 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
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State of Israel
Ministry of CommunicationsTechnology 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.
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State of Israel
Ministry of CommunicationsVenture 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%).
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State of Israel
Ministry of Communications
Telecom Israel 2002 Exhibition and Conference:
The Future is Here
Tel-Aviv, 4-7 November, 2002
For more information
Telecom Israel 2002:http://www.telecom2002.co.il
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State of Israel
Ministry of CommunicationsTelecom-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!
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State of Israel
Ministry of Communications
Telecom Israel 2002 Conference Program (preliminary)
Tuesday, 5 Nov. Wednesday, 6 Nov. Thursday, 7 Nov.
Telecom, IT & Media at the Crossroad: Challenges and OpportunitiesAfter the Hype - Sober View of the IT, Telecoms and Media Industries
Information is PowerCivilian & 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
Telecom and Content Regulation - Critical Must or Unnecessary Burden?
The New Mobile World - Will Mobile Operators Make the Change From Voice to Multimedia?
Network Infrastructure in a Competitive World - All Optical Core
Broadband Fixed & Mobile Access Networks - Will the Bottleneck Open?
Interactive Entertainment - Is There More than Sex, Shopping and Games?
Delivering Business Services - The New Generation Application Service Provider
Intelligent Buildings and Home Networking - Towards Networked Home?
Government & Business Collaboration - Government Incentives and Business Motivation Support for Technology Development
Network Infrastructure in a Competitive World - Next Generation Network: All IP Switching and Service Delivery
New Horizons for Internet Technology - What is the Next Big Thing?
Fixed Mobile Convergence - Bundling or Bumbling?
Service and Network Security in an Open Broadband World
Consumer and Business Applications - The Future of B2C Retailing and B2B Trading
Managing Customer Relationship - Adding Value Through Customer Management
The Future of Fixed Services Competition - Is There Opportunity for CLEC’s?
Israel Telecommunications Market - Will the Growth Continue?
Startups and Venture Capital - Investments in the Future of Israel’s Technology
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State of Israel
Ministry of Communications
Telecommunications Market Overview
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State of Israel
Ministry of Communications
Telecommunications Services Market - 2001
InternationalLong-Distance
Cable TV
Terminal Equipment& Business Systems
Internet services
FixedServices
52%MobileServices
26%
9%7%
2%4%
Total telecom services market ~ US $5 billion
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State of Israel
Ministry of Communications
Internet Users Across The World 2001
4 4
911
13 1315 15 16 16 17
19
2426 26
3033 33 33 34
3639 40 40
4345
48 4851 52
5760
62 63
0
10
20
30
40
50
60
70
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aine
Lith
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a
Phi
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Indi
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Latv
ia
Por
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and
Tur
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Arg
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a
Hun
gary
Tha
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Mal
aysi
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Spa
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Bel
gium
Est
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at B
ritai
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ong
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Aus
tral
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Kor
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Net
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nds
US
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way
Country average (31%)
Source: Tayler Nelson Sofres Interactive – Global eCommerce Report 2001
Per
cen
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ad
ult
po
pu
lati
on
Percentage of the population who have personally used the Internet during the past month
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State of Israel
Ministry of CommunicationsBroad Band
100,000 ADSL lines, 15,000 Cable modems.
Competition launched January 2002.
Subscribers growth ~175% in the last 8 month.
Households penetration ~6%.
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State of Israel
Ministry of CommunicationsRegulatory Policy
Public interest - the main issue
Competition - the key for innovation, entrepreneurship, investment & growth.
Key action areas: Liberalization. Re-regulation. Privatization.
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State of Israel
Ministry of CommunicationsRegulation 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.
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State of Israel
Ministry of Communications
From Monopoly to Competition
Pelephone(Bezeq)
Bezeq
Bezeq
MobileServices
1994 2000 2002 +
PelephoneCellcomPartner
PelephoneCellcomPartnerMIRS
FixedServices
(Infrastructure, Transmission & Telephony)
Bezeq
BezeqCable CompaniesOthers:
WirelineWireless
InternationalLong
DistanceServices
Bezeq-InternationalBarakGolden-Lines
Bezeq-InternationalBarakGolden-LinesAdditional operators
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State of Israel
Ministry of Communications
Fixed servicesDriven by Broadband Demand
Actual competition started Q2 2002
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State of Israel
Ministry of Communications
Bezeq CallCommunications
CPE &BusinessSolutions
(100%)
yesDirect
BroadcastingSatellite(44.9%)
Bezeq Consortium
BezeqInternational ILD & Internet
(100%)
PelephoneMobile Services
(50%)
BezeqFixed Services& Infrastructure(Holding Company)
Walla!Communications
Portal & web
hosting
(36.7% by BI)
Bezeq Online
Call Center
(100%)
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State of Israel
Ministry of Communications
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.
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State of Israel
Ministry of Communications
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.
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State of Israel
Ministry of Communications
Cable TV firms - the new entrants
Fully digitized HFC networks (750MHz).
Cable Modem broadband Internet services (64Kb/s – 2Mb/s).
Interactive TVT- mail, T- commerce.Future plans – IP telephony and
data services over cable.
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State of Israel
Ministry of Communications
Mobile Services
Competition Introduced December 1994
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State of Israel
Ministry of CommunicationsMobile Operators
CompanyPelephoneCellcomPartnerMIRS
Licensed1987199419982001
Market share28%40%28%4%Frequencies
(Mhz)800, 2000800, 1800,
2000900, 1800, 2000
800
Technology (present)
NAMPS & CDMA
TDMA & GSM
GSMiDEN
(ESMR)
FutureCDMA & UMTS
UMTSUMTSiDEN
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State of Israel
Ministry of Communications
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).
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State of Israel
Ministry of Communications
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.
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State of Israel
Ministry of Communications
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.
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State of Israel
Ministry of Communications
International Long Distanceservices
Facilities Based Competition Introduced July 1997
1 state – owned, 2 privately – owned service providers
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State of Israel
Ministry of Communications
Submarine Optical Cables Infrastructure
LEV
EMOS CIOSCable RFCS Capacity
EMOS 1990 280 Mb/sCIOS 1994 622 Mb/sLEV 1998 5 Gb/sMN1 2001 3.84 Tb/s
MEDNautilus 1
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State of Israel
Ministry of CommunicationsThe 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
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State of Israel
Ministry of CommunicationsCivilian Telecommunications Satellites
AMOS-1: TV distribution, SNG & VSAT launched May 1996. Geostationary orbit at 4
o 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.
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State of Israel
Ministry of CommunicationsAmos 2 SatelliteLaunch 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.
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State of Israel
Ministry of Communications
The EndThank you for your attention
For more informationhttp:/www.moc.gov.il