Israel seeks partner for new fibre project

10 October 2011 | Guy Matthews

The government of Israel has launched a competitive tender to find a partner to build a national fibre network in partnership with utility company Israel Electric Corp.

It said the resulting network will need to provide fast internet access and broadcast services, in competition with the country’s two existing fixed-line network operators.

The winner of the competitive process, to be announced within six months, will get a 51% controlling stake in a new communications infrastructure company. The network will be expected to deliver super-fast Internet access to two thirds of Israeli homes within seven years, and eventually cut the cost of services to ‘tens of shekels’ a month.

Israeli finance minister Yuval Steinitz has said the government’s ultimate aim is an information highway that will lead ‘to every home and office’ in the country. He said that introducing added competition for Bezeq Israeli Telecommunication Corp and Hot Telecommunication System was the best way to stimulate a healthy open market with competitive pricing.

Bezeq and Hot will themselves now have to invest in new high-speed internet services to compete, believe analysts.

Telecom Italia subsea cable subsidiary Mednautilus has already indicated that it would like to extend it stake in the Israeli broadband market beyond its cable landing station, currently the only cable directly linking Israel with Europe.