from the January 2007 issue

Overview of Israel's Internet & Broadband

Internet penetration is growing quickly. Five major and about 70 smaller Internet service providers serve more than three million users, including above 60% of households and above 80% of businesses. Cellular phone companies introduced wireless Internet during 2001. Bezeq began to offer ADSL services in 2000, and the cable companies started to provide broadband cable modem access in March 2002. As a result of the competition, the penetration rate of broadband to households has grown from 4% in 2002 to 62% in June 2006. Fixed broadband service in Israel (by Cable Modem or ADSL) has a home-pass of 99%. The tariffs of broadband Internet have decreased in dozens of percentages.

The cable companies and Bezeq are obligated to provide universal deployment of broadband Internet access service. Broadband penetration rates are quite promising: 800,000 ADSL subscribers and 430,000 cable modem subscribers, as of December 2005, translate to a penetration rate of 58% per households in 2005 and 18% per inhabitants, placing Israel among the leading countries in the world in terms of broadband penetration.

Factors encouraging this growth include the competition between Bezeq and the cables companies (both are under universal service obligation), competition between five major ISP's widespread use of computer in business and at home, advanced telecommunications infrastructure and a regulatory policy of minimal intervention. Several sophisticated Hebrew-language portals and more than 60,000 web pages also contribute to ubiquitous Internet use in Israel.

Israel is a world leader in developing Internet technologies and applications, and Israeli companies operating in the field have marked several international successes. This international reputation is also recognized on the home market, and influences local interest and use.

The country's strong tradition of academic inquiry and research has placed Israel on the global research network for the NGI (Next Generation Internet), linking Israel to the world's seekers of scientific and industrial knowledge through StarTap (Chicago) to the U.S.Internet 2 Network, through the Point of Presence (London) to the EU GEANT Network and to Q-Med (Mediterranean consortium Quantum extension).

Reprinted from the Israel High-Tech & Investment Report January 2007

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