Long a fast internet laggard among developed economies, Israel is rapidly catching up as the pace of homes linked to fiber optic lines has begun to surge following measures taken by the Communications Ministry.
Data obtained by TheMarker show that for March, a record 42,000 homes were given access to fiber optic lines needed to carry internet at speeds of up to 1,000 megabit per second, five or 10 times faster than ordinary service in Israel. In 2018, the average number of homes being hooked up ran at just 10,000 a month.
Fast internet service isn’t a consumer luxury. Many studies have shown a direct link between economic growth and fiber optic deployment, so Israel’s government is encouraging the rollout of the speedier internet option. The goal is to have the service available to 20% of homes by the end of 2019, but if the current breakneck pace continues, the target may be reached long beforehand, sources say.
Some 404,000 of Israel’s 2.6 million households have access to fast internet, or about 15% of the total, which is ahead of Britain. That figure is somewhat misleading because two and sometimes three companies providing the service install lines to the same house, so the actual figure is an estimated 10% lower.
Moreover, a house that has access to fast internet in theory may not in fact have it because the fiber optic network hasn’t been activated. The costs are such that until there is enough demand for fast internet, it’s not financially worthwhile for companies to turn it on. Thus, Bezeq, Israel’s biggest telecoms companies, has fiber optics reaching 60% of Israel’s households but hasn’t activated its network at all.
Neither Bezeq nor its No. 2 rival HOT Telecom has taken the lead. Instead, the growth is coming from three other smaller firms – mobile operators Partner Communications and Cellcom Israel and IBC. The latter is controlled by state-owned Israel Electric Corporation, which runs its fiber optic cable on the back of its electricity network, but is due to be taken over by a joint venture of Cellcom and the Israel Infrastructure Fund.
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Partner is the market leader. Sources said it added 100,000 households in the first quarter to bring its total to 350,000. But only 200,000 homes have access to an active network. The company counts 45,000 paying customers for fast internet. Cellcom is a distant No. 2, with 150,000 homes linked, nearly all of them to an activated network. It has 15,000 paying subscribers, according to figures seen by TheMarker. IBC counts 150,000 installed lines, but only 60,000 are activated and the number of paying customers is just 10,000. The result is that fewer than 70,000 households, or 15% of the total, use fiber optics lines for fast internet. One reason for the slow uptake, said sources, is that Bezeq and HOT's regular internet service is fast enough for video, sources said.