BUENOS AIRES, Argentina-Mobile communications are vital to Israel. The permanent tension, caused by terrorist attacks, compels everyone to be in constant communication. Despite its conflicts and small population, Israel has been able to excel in wireless communications.
Similar to several other countries around the world, Israel postponed its cellular third-generation (3G) license auction that was supposed to take place 17 July until 21 August. Incumbent operators Partner Communications (Orange) and Pelephone, along with Motorola, which operates an iDEN digital trunked radio network, have purchased the auction documents. Although carrier Cellcom did not purchase the documents, it said it is considering a joint bid with Israeli company OFEK.
Four licenses will be auctioned, with a base price of US$100 million each, although new players will have a 25-percent reduction in the price. Each license will be 40 megahertz within the 1710 MHz to 2170 MHz frequency band, while three of the four licenses will have 5 megahertz more in the 1900 MHz to 2025 MHz spectrum.
However, the auction of three licenses for broadband fixed wireless access (BFWA) in the 3.5 GHz and 26 GHz spectrum did move forward and was under way at press time. The combination of both BFWA frequencies will allow for extensive coverage for corporate clients, with a transmission speed of up to 2 Megabits per second (Mbps).
“The participants of the BFWA auction are four: the cellular operator Cellcom; ISPs (Internet service providers) and international call providers Barak and Golden Lines; and OFEK, an Israeli company established specifically for the BFWA business,” explained Ilan Moshe, vice president of marketing and sales for Radwin, an Israeli fixed wireless vendor.
Simultaneously, the Ministry of Communications announced it is changing the special digital trunked radio license of Motorola Integrated Radio Services (MIRS) into a general cellular license this year. MIRS’ required payment for the change in its license will be determined on an economic basis at a later stage.
Strong growth
For a country going through its sixth conflict since its declaration of independence 53 years ago, communications could easily become a non-priority. However, that has not been the case. Daniel Rosenne, general director of the Ministry of Communications of Israel, said the country has been successful in communications, and in April, “fixed telephony penetration reached 45 percent of the population and cellular telephony 76 percent.”
Although Cellcom is the operator with the most subscribers, its growth has stalled during recent months. The carrier increased its client base from 1.8 million clients in October 2000 to 2 million in April 2001. In reality, Orange is the Israeli carrier showing the most vitality, increasing its market share from 14 percent to 21 percent between April 2000 and April 2001, during which it reached 1.25 million users. During the same period, Orange’s average number of minutes consumed monthly decreased from 411 to 333, and its average revenue per user (ARPU) also decreased from US$76 to US$55, although its ARPU continues to be one of the highest in the world.
Both reductions are the results of stronger competition among the operators and an increase in the percentage of prepaid telephony, currently at 40 percent.
Toward GPRS
Both Orange and Cellcom will migrate part of their networks to General Packet Radio Service (GPRS). Orange signed an agreement with Ericsson to launch GPRS services later this year.
“With GPRS, our customers will remain on the cutting edge of technology, benefiting from the state-of-the-art services and applications suitable for the mobile lifestyle,” said Amikam Cohen, Partner’s chief executive officer.
All indications are that Cellcom will soon announce a plan to migrate part of its TDMA network to GSM/GPRS as a preliminary stage toward 3G services. Gaby Junowicz, business development manager for wireless networks for Rad Data Communications in Israel, predicted the GPRS migration will happen because “the same is happening with several operators who use TDMA technology all over the world as they migrate to GSM.” Rad provides wireless infrastructure equipment to Israeli carriers.
Pelephone, a company that employs CDMA technology and had 1.55 million users in April, has not announced its 2.5-generation (2.5G) service plans. Motorola recently sold its 50-percent stake in the carrier to Shamrock Holdings. And the Israeli government decided in June that it would sell 50.01 percent of Bezeq, the fixed telephony monopoly that owns the other 50 percent of Pelephone, to a sole private shareholder during the second half of this year. Until a majority private shareholder is established at Bezeq, Pelephone is not willing to make 2.5G investments.
Value-added services
In Israel, electronic messaging services that do not need to go through a server, and thus are more secure, are multiplying. In July 2000, Orange launched its Wireless Application Protocol (WAP) services; nearly a year later, it unveiled a mobile force management application based on technology from Israel’s CT Motion. This application supports a mobile force management service, enabling managers and dispatchers to easily locate their mobile employees in real time using on-screen map displays. Organizations can instantly communicate with their employees through two-way short message service (SMS)-based or Internet-enabled messaging.
Furthermore, Orange introduced Sim & Buy, an m-commerce service, in the city of Shoham as a pilot program. It is a service based on AdamTech’s CellPay, a solution bringing cellular phone subscribers, operators, merchants and financial institutions into one integrated system and providing a secure end-to-end mobile payment solution. Sim & Buy is the first service in Israel that allows users to buy goods in local stores and in vending machines and to allow parents to transfer funds to their children and to control the children’s purchase allowance.
