Telecommunications in Israel: A History of Growth and Innovation

Israel has a thriving telecommunications industry that has undergone significant growth and innovation over the years.

The country's first telephone call was made in 1882, marking the beginning of its telecommunications journey.

By the 1920s, Israel had a relatively small telephone network with only 3,000 subscribers.

The 1950s saw a major expansion of the network, with the number of subscribers increasing to over 100,000.

Israel's telecommunications industry has continued to evolve, with significant investments in modern infrastructure and technology.

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Israel's telecommunications history is a fascinating story. The country's first mobile post office was launched in 1955 in the Negev, marking a significant milestone in the development of the sector.

In the 1960s, Israel's television broadcasting began, with the first shows airing in 1969 by a single state-owned television network. This was a major step forward for the country, bringing entertainment and information to the masses.

The Israeli Postal Service was established in 1948, replacing the mail service system provided during the British Mandate of Palestine. This marked the beginning of a modern postal system in the country.

By the early 1980s, Israel's telephone network was struggling to keep up with demand, with long waiting lists for new lines and poor service. The government responded by creating a state-controlled company, Bezeq-The Israel Telecommunications Corporation, in 1985.

Here are some key statistics on Israel's telecommunications development:

The de-monopolization of the cellular market began in 1994, with the government permitting a second, private-sector company, Cellcom, to compete in the market. This led to significant improvements in service and prices for consumers.

Israel's media landscape is a vibrant and diverse one. The country has a well-developed television and radio broadcasting system, with several major networks operating in Hebrew, Arabic, and Russian.

Bezeq, the largest telecommunications company in Israel, also operates a television channel and provides internet and phone services to millions of customers.

Israel has a high penetration rate of online media, with over 90% of the population using the internet.

The Israeli television landscape has undergone significant changes in recent years. The introduction of Yes, a satellite television provider, in 2000 brought strong competition to the cable television market.

Prior to Yes, there were only three other cable companies in Israel: Tevel, Matav, and Arutzay Zahav. This competition led to a big loss of members amongst the cable TV companies, prompting them to merge in 2003.

The merged company, Hot, was established to strengthen the competition against Yes. Yes, on the other hand, focused on inserting digital set-top boxes to offer improved reception, games channels, and video on demand.

Hot has put a big emphasis on encouraging local Israeli movie production, while YES prioritizes purchasing foreign TV series and movies. This difference in focus has led to distinct viewing experiences for Israeli audiences.

Channel 10 was established in 2002, introducing an additional Israeli terrestrial-commercial channel. Despite efforts to compete, Channel 10 still lags behind other channels in terms of viewership.

In 2005, Keshet and Reshet were chosen to broadcast on Channel 2 for the next decade. The Israeli News Company won the bid to produce the Knesset Channel.

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Radio is a significant part of Israel's media landscape. In the radio field, the Israel Broadcasting Authority is allowed to produce earnings from advertising, unlike in the television field.

Kol Yisrael, also known as "Voice Of Israel", is the radio section of the Israel Broadcasting Authority. It's a leading radio station in Israel.

Reshet Bet is the actual leading radio station in Israel, not Kol Yisrael. Two additional radio stations belong to the Israeli defense forces: Israel Defense Forces Radio and Galgalatz.

There are regional commercial radio stations broadcasting under the auspices of the Second Authority for Television and Radio.

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International calls are a big deal in Israel, and there are several operators that offer affordable rates.

As of October 2016, eight operators provide international telephony: 012 Smile, 013 NetVision, 014 Bezeq International, 015 Hallo 015, 016 Golan Telecom, 017 Hot Mobile, 018 Exphone, and 019 Telzar.

These companies offer membership services that give customers cheaper rates and sometimes additional benefits like billing and dialing the default 00 prefix.

Most of these operators have an extensive infrastructure of links abroad, which also enables them to provide internet services.

Incoming calls are distributed among the companies based on their market share.

Membership with these companies can make a big difference in your international call costs.

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Israel's telecommunications infrastructure has undergone significant upgrades, with complete digitalization offering a range of advanced services. Subscribers can enjoy features like call waiting, call forwarding, and voice-mail recordings.

Most inter-urban links and urban infrastructure are now underground fiber-optic lines, connecting to the country's cable television network. Subscribers can dial directly to every country in the world via underwater fiber-optic lines or satellite link-ups.

Israel's telecommunications providers are installing "intelligent networks" to facilitate the expansion of the global information highway. These networks will enable mobile phone subscribers to use data transmissions, voice-activated dialing, and call filtering and identification.

The efficiency and extensiveness of this telecommunications infrastructure has underpinned Israel's impressive economic growth in the 1990s.

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Landline services in Israel are offered by several operators, including Bezeq, HOT, Partner, and Cellcom. Bezeq offers traditional landline services, while the others provide Voice over IP.

Bezeq had 9,500 payphones throughout the country as of 2020. These payphones are being dismantled, with only those in active use and those within closed spaces, such as prisons, remaining.

Here are some details about the operators providing landline services in Israel:

Bezeq upgraded Israel's telecommunications infrastructure, making it possible for subscribers to enjoy advanced services like voice-mail recordings and caller identification.

Complete digitalization has transformed the way people communicate, allowing them to dial directly to any country in the world via underwater fiber-optic lines or satellite link-ups.

In the mid-1980s, the first mobile phone company appeared in Israel, but it wasn't until the 1990s that market penetration became substantial.

The second mobile phone company began operations in 1994, using digital technology and low tariffs to revolutionize the market.

Today, a third cellular communications company is set to start operating, further expanding Israel's telecommunications network.

Phone use has also proliferated in Israel, thanks to extensive use of data communications facilities, which have become a staple in many businesses and homes.

Fax machines and electronic mail are now common, and many companies are installing Integrated Services Digital Networks (ISDN) for a wider range of voice, data, and video services.

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The Internet became a staple in Israeli households, with broadband Internet becoming prevalent in the majority of homes. Bezeq ceased to be a monopoly in landline communications when HOT started offering telephony services through cable infrastructures.

By the middle of the decade, high-speed Internet and VoIP technologies gained popularity, allowing Israelis to conduct international conversations free of charge or at lower rates through the Internet. This was made possible by the link between VoIP networks like Skype and Vonage and traditional telephony networks in Israel and abroad.

Well over one million Israelis use the Internet on a regular basis, with the number growing annually at a rate of roughly 30%. The number of PCs per household is a high 60%, but the Internet penetration rate at the end of 1999 was relatively low at 164 per 1,000 people.

The first Internet Service Provider (ISP), Netvision, began selling access to the Internet in 1994. There are now more than 30 Israeli ISPs, with four companies leading the market: Internet Gold, Netvision, Bezeq International, and Barak.

Israel's low Internet penetration rate can be attributed to language barriers, high tariffs, and the absence of high-speed Internet access in private homes. Industry experts also note that standard web browsers were not designed for right-to-left languages like Hebrew.

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The Systems Sector in Israel has been a driving force behind the country's telecommunications revolution.

Israel is home to a thriving startup scene, with many companies emerging in the Systems Sector, such as Amdocs, an Israeli company that provides software solutions for the telecommunications industry.

The Systems Sector has also seen significant investment, with companies like Amdocs receiving funding to develop new technologies.

Innovation is at the forefront of the Systems Sector, with companies pushing the boundaries of what is possible in telecommunications.

The Systems Sector has also been at the forefront of cybersecurity, with companies like Check Point developing advanced security solutions.

The Systems Sector has played a crucial role in Israel's economic growth, creating jobs and driving innovation.

The 1980s brought a significant transformation to Israel's telecommunications market. In 1984, Bezeq was established to reduce bureaucracy and improve efficiency, significantly reducing the waiting period for the installation of new telephone lines.

The waiting period was staggering, with over three years for a new telephone in the early 80s. Existing lines couldn't cope with demand during peak hours. This was a major challenge that needed to be addressed.

Bezeq's formation as a government-owned enterprise working on a profit and loss basis was a game-changer. It set about satisfying a waiting list of 250,000 subscriber requests. By 1990, it had fulfilled all requests and was even able to launch a marketing campaign to persuade homeowners to install a second line.

Today, Israel has a robust telecommunications infrastructure, with 40 lines per 100 people and a fixed-line network of 2.55 million. The transformation began in 1984, and it's impressive to see how far the country has come since then.

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The Israeli telecommunications infrastructure has undergone a remarkable transformation over the years.

In the early 80s, the average waiting time for a new telephone was over three years. This was largely due to the inefficient system in place at the time.

The formation of Bezeq in 1984 marked a significant turning point. As a government-owned enterprise working on a profit and loss basis, Bezeq set out to satisfy the waiting list of 250,000 subscriber requests.

By 1990, Bezeq had fulfilled all requests and even launched a marketing campaign to persuade homeowners to install a second line. Today, Israel has 40 lines per 100 people with a fixed-line network of 2.55 million.

Here's a brief timeline of the key milestones in Israel's telecommunications journey:

The 1990s was a transformative decade for the Israeli telecommunications industry. The Second Israeli Broadcasting Authority was established in this period, paving the way for the launch of Channel 2, Israel's first commercial television channel, on November 4, 1993.

Channel 2's introduction marked the beginning of television ratings in Israel, with the original agreement stipulating that broadcasting days would be distributed among three companies to avoid direct competition.

The multichannel television platform in Israel gained momentum with the establishment of cable TV companies, each holding a monopoly in a specific area of the country. This led to the availability of foreign channels from around the world, as well as new local channels, such as children's, sports, family, and film channels.

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Pirated cable broadcasting in Israel all but disappeared as a result of this development. In contrast, Israeli pirate radios experienced a surge in popularity, which coincided with the establishment of legal regional radio stations and the reorganization of military radio stations in 1993.

By the end of the decade, radio had lost significant ground to television in terms of listener ratings, with the medium now considered a niche communication platform.

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In the 1990s, the Israeli television industry underwent significant changes, transforming from a state-controlled monopoly to a highly competitive market.

Channel 1, the state-owned television station, airs about 70% of its programming locally, including dramas, comedies, and news shows, and does not air commercials. This means its programming priorities are not swayed by audience ratings.

Channel 2, the commercial television network, was established in 1993 and is operated by three franchisees who each broadcast slots of two or three days a week in half-year rotations. Channel 2 is supported by advertising and takes nearly a quarter of all advertisement spending in Israel.

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The government imposes certain standards on the broadcasters, including a requirement that 40% of all programming must be local, and quotas on various genre segments are imposed. The three franchises must pay 8% of their revenues to the State in royalties.

The Israeli Broadcasting Authority (IBA) oversees 14 privately operated radio stations around the country, in addition to Channel 1 and Channel 2.

Here are some key facts about the Israeli television industry:

In 2001, the government announced the creation of Channel 3, a second national commercial channel, and an all-news commercial channel, Israel 24, both of which were set to begin broadcasting by the end of that year.

The telecom market in Israel is expected to see some growth in the coming years, but it's not going to be explosive. Total telecom and pay-TV service revenue in Israel will grow at a CAGR of 0.6% over 2024-2029.

Mobile data is where the action is, with revenue growing at a five-year CAGR of 1.7%. This is being driven by increasing internet subscriptions, the promotion of data-centric services, and a growing adoption of higher ARPU-yielding 5G services.

Fixed broadband revenue is also on the rise, growing at a CAGR of 3% over 2024-2029. This is thanks to growth in FTTH/B subscriptions for improved speeds and user experience, as well as cross-selling multiplay packages and fiber network coverage expansion.

The overall telecom and pay-TV services revenue in Israel will increase at a CAGR of 0.6% during 2024-2029, a relatively modest growth rate.

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