Business Monitor International


Israel Telecommunications Report

Published 11 November 2013

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Israel Telecommunications Report

BMI Industry View

BMI View : The increase in competition in Israel's mobile market, following the arrival of new MNOs and MVNOs, and cuts to interconnection rates in 2012 led to a sharp decline in key operational and financial indicators, notably ARPUs and voice revenues, during FY12 and H113. We expect operators to respond to the erosion of their top line financial results by expanding their high value service offerings and migrating existing customers unto postpaid subscriptions. We also expect mobile operators with high-speed fixed infrastructure to perform strongly in terms of revenue and subscriptions growth during our forecast period, though to 2017, by cross-selling mobile, fixed-line and pay-TV services. This strategy has already proved successful for some operators and will be vital for reducing churn amid intense competition in the market.

Key Data

  • Mobile subscriptions grew marginally by 0.5% y-o-y in the 12 months to June 2013. The slow growth is attributable to net subscription losses of 126,000 during H113.

  • The rate of decline of the market share weighted average ARPU is slowing down, following a decline of just 4.7% in H113 compared to a decline of 14% in FY12.

  • The fixed telephony and fixed broadband markets recorded positive growth in 2012, despite the high penetration of mobile voice and data services.

Key Trends & Developments

Israel's Ministry of Communications (MoC) has made proposals that will prevent telecoms companies from blocking or limiting network traffic, applications or equipment on their networks. The government has proposed an amendment that even equipment will be included in net neutrality, ensuring all players in the telecoms market are ascribed the same rules. Israel's net neutrality law will prevent operators from prioritising their own services over those provided by third parties and also restricting the use of built in features such as mobile Wi-Fi hotspots or using a device on a different network. The MoC's...

Table of Contents

BMI Industry View
5
SWOT Analysis
6
Israel Mobile Industry SWOT
6
Israel Fixed-Line/Internet SWOT
6
Israel Political SWOT
7
Israel Economics SWOT
8
Israel Business Environment SWOT
8
Business Environment
9
Middle East And North Africa
9
MENA Telecom Risk/Reward Ratings, Q113
13
Israel
13
Industry Forecast Scenario
16
Mobile
16
Table: Mobile Data And Forecasts, 2010-2017
16
ARPU
18
Table: Telecoms Sector - ARPU - Historical Data & Forecasts
18
Fixed-Line
20
Table: Fixed-Line Data And Forecasts, 2010-2017
20
Internet
21
Table: Internet Data And Forecasts, 2010-2017
21
Market Overview
23
Mobile
23
Regional Perspective
23
Table: Heading: Israel Mobile Market Regional Comparisons, 2011
23
Key Developments
24
Mobile Growth
25
Table: Israeli Wireless Market, Q212
26
Usage (ARPU)
28
3G
29
MVNOs
31
Mobile Content
32
Mobile Operator Data
34
Table: Israel Mobile Market Overview
34
Table: Cellcom
34
Table: Partner
35
Table: Pelephone
37
Table: MIRS
38
Mobile Content
39
Regional Overview
39
Fixed Line
43
Table: Bezeq-s Operating Statistics, 2005-Q212
45
Broadband
46
Table: Bezeq-s ADSL Indicators, 2007 - Q212
47
Industry Trends & Developments
48
Regulatory Environment
49
Israel: Regulatory Bodies And Their Responsibilities
49
Legislation And Market Liberalisation
49
Regulation
50
Regulatory Developments
50
Competitive Landscape
53
Table: Key Players In Israel-s Telecommunications Sector
53
Table: Telecoms Operators- Revenues And Other Information, 2007-2011
53
Company Profiles
54
Bezeq/Pelephone
54
Partner Communications
57
Regional Overview
60
Vendor Profile: Alcatel-Lucent
60
Table: Alcatel-Lucent - Quarterly Breakdowns Of Revenue By Segments, 2011-2012 (EURmn)
60
Demographic Forecast
65
Table: Israel's Population By Age Group, 1990-2020 ('000)
66
Table: Israel's Population By Age Group, 1990-2020 (% of total)
67
Table: Israel's Key Population Ratios, 1990-2020
68
Table: Israel's Rural And Urban Population, 1990-2020
68
Glossary Of Terms
69
Table: Glossary Of Terms
69
BMI Methodology
70
How We Generate Our Industry Forecasts
70
Table: Key Indicators For Telecommunications Industry Forecasts
70
Telecoms Business Environment Ratings
72
Risk/Reward Ratings Methodology
72
Table: Ratings Indicators
73
Weighting
74
Table: Weighting Of Indicators
74
Sources
74

The Israel Telecommunications Report features Business Monitor International (BMI)'s independent industry forecasts on the future strength of Israel's ICT market, covering the fixed-line, mobile and internet segments and analyses latest regulatory developments and corporate news, including investment activity, mergers and acquisitions, joint ventures and partnerships. Leading operators and manufacturers are fully profiled, highlighting their quarterly financial performance, capital expenditure plans and latest contracts.

BMI's Israel Telecommunications Report provides industry professionals and researchers, operators, equipment suppliers and vendors, corporate and financial services analysts and regulatory bodies with independent forecasts and competitive intelligence on the telecoms industry in Israel.

Key Benefits

  • Benchmark BMI's independent telecoms industry forecasts for Israel to test other views - a key input for successful budgeting and strategic business planning in the Israeli telecoms market.
  • Target business opportunities and risks in Israel's telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Israel.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts and views, covering the ICT, fixed-line, mobile (including 3G), internet and broadband markets.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the wireline and wireless sectors and within the broader political, economic and business environment.

Business Environment Ratings

BMI's Telecommunications Business Environment Ratings provides a country-comparative Risk-Reward Ratings index aimed at investors (vendors, operators and suppliers) in the regional telecoms market.

The ratings methodology makes sophisticated use of more than 40 industry, economic and demographic data points.

BMI Industry Forecast Scenario

Historic data series and forecasts to end-2018 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

  • Fixed-Line Telephony - Telephone lines ('000); telephone lines/100 inhabitants.
  • Cellular Telephony - Mobile phone subscribers ('000); mobile phone subscribers/100 inhabitants; mobile phone subscribers/100 fixed line subscribers.
  • Internet Markets - Internet users ('000); internet users/100 inhabitants; broadband internet subscribers ('000); broadband internet subscribers/100 inhabitants.

Market Data Analysis

Detailed market analysis of the mobile, mobile content, fixed line and internet segments, broken down into:

  • Market Data - Analysis of market size, operator shares, dominant trends, competitive landscape and key quarterly data.
  • Technology/Service Rollout - Analysis of rollout/adoption of new technology, such as 3G, WiMAX, IPTV, pay-TV, LTE and value-added handset services (gaming, music, video, apps etc.).
  • Mobile Content - The latest trends in content and services available and being introduced by mobile operators. Including a timeline of all the latest major mobile content developments.
  • Company Database - A comprehensive breakdown of KPIs of the leading mobile operators, including subscriber figures by type (pre-paid and post-paid); 3G subscriber figures; net additions; market share; ARPU; churn rates; minutes of use; voice and non-voice revenue; financial figures (including operating revenues, net profits and EBITDA).

Regulatory Environment

Details of the regulatory bodies and their responsibilities, as well as a special focus on the rules surrounding competition and interconnection. The latest updates in the market's development and regulatory rulings.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc