ISRAEL’S COMMUNICATION STRUCTURE AND POLICY

Ministry of Communication

Department of International Relations and Information

February 1995

1. Background

Until about 10 years ago, Israel’s Ministry of Communications was responsible both for communication policy and for providing the country’s telephone, telex, data and postal services.

In 1984 The Government established BEZEQ – The Israeli Telecom – and the responsibility for the country’s communications was divided between the two bodies.

In 1988 the Postal Authority was inaugurated by the Government, which was then left with responsibility for policy-making; the determination of communications priorities; legislation; regulation, Licensing, spectrum management and supervision of communications services. It became, in effect, a staff body.

In addition, the government is presently responsible for policy, regulation, development and modernization of equipment involved in providing public broadcasting services, including the use of satellites.

The services are provided as a rule BY BEZEQ, by the Postal Authority and by entrepreneurs, contractors and licensed franchisees.

2. BEZEQ – The Israel Communication Corp.

BEZEQ, the Israeli Telcom, holds an authorized monopoly of the national telephone infrastructure and a limited monopoly of the international telephone infrastructure. In accordance with a general Government policy of privatization, it intends to reduce BEZEQ’s monopolization of the telecommunications market in the forthcoming, revised General License under which the company operates.

3. Competition in the Telecommunications Field

The policy of the government is based on liberalization, deregulation, competition and privatization i the field of telecommunication, to be implemented in a series of gradual, controlled steps. The government has already issued dozens of licenses for Value Added Services provided by data and computerized networks; and for services provided on customer’s premises. It has recently opened the field of satellite communications to competition.

The first license for VSAT (Very Small Aperture Terminal) services has a recently been granted to the company and to the Postal Authority. The Government is also considering a number of applications for licenses for the operation of international IBS services. The terminal equipment field is open to competition; subject, of course, to type approval procedures.

Free competition can bring us full development of advanced communications services at a low price for the user. Competition is what allow the user to freely determine which is best suited to him.

4. Cellular Systems

There was a single cellular telephone system operating in Israel with approximately 60,000 subscribers. It is composed of both AMPS and NAMPS technology. In December 1994, Cellcom, a joint venture of BellSouth, Brazil’s Safra banking family and Israel’s Discount Investment Company Ltd. has started operating the country’s second cellular network using the latest digital technology.

5. Public Broadcasting – The Israel Broadcasting Authority

The Israel Broadcasting Authority operates one national TV network, 5 national radio networks, and one short-wave radio network for overseas broadcasts.

The government is responsible for developing these facilities and for modernizing the equipment. It does so by using BEZEQ as its prime contractor. Recently a high-level committee recommended the establishment of a special company that would be responsible for operating the broadcasting equipment. Under this system, more than 50 TV transmitters, over 50 AM and FM radio transmitters, and some 10 HF transmitters (two of which are over 55 KW) will be operated. TV programs will be transmitted via satellite microwave.

6. The Army Radio Atation

In addition to above-mentioned broadcasting services, the Israel Defense Forces operate their own network – a young and very popular station, broadcasting by means of some 20 AM and FM transmitters.

7. The Second TV Network

Three franchises have been awarded for the operation of the Second TV Network. The Government transmits this channel over direct satellite broadcasting via 4 earth transmitters (within the next two months the government will be operating an additional transmitter). The three franchises split broadcasting time amongst them, by prior agreement and as part of the terms of their licenses.

8. The Third Network

The government is already broadcasting on an experimental basis. programs of a Third Network via satellite. It is hoped that these will be put on a permanent basis following the introduction of the Second Network.

9. CATV

Two years ago the government began the rapid introduction of cable services in Israel. The process has been quite successful. The country was divided into 30 areas, and each area was awarded to a franchisee on the basis of a public tender. Today, some 60% of the population is already connected to CATV. The government has issued a tender to permit the cable companies to offer home shopping. The tender was issued in July 1994. The results will be published in mid-1995.

10. International Telecommunications Services

BEZEQ holds an authorized limited monopoly of the international telephone service. The government has decided to offer a tender for a second operator of international telecommunications services, in line with its general policy of privatization. The Telecommunications Law was amended in 1992 in order to permit this development, which is expected to take place in June 1995.

11. Satellites

Israel has already launched two satellites for non-civilian use, OFEQ I and OFEQ II. In 1995 an Israeli telecommunications satellite, AMOS, a product of the Israel Aircraft Industries Ltd (IAI) is scheduled to be put into orbit.

12. Regional Radio Stations

The Government intends to publish tenders for commercial regional radio stations in the coming months.

13. Tariffs Policy

Objective: Tariffs reflect the costs plus a fair and proper space. The updating of tariffs occurs according to the index minus the increase of costs with the aim that the prices will be as low as possible; good, efficient and available communication at low prices.