JERUSALEM Dec 26 A group led by Sweden's
Viaeuropa won the right to build a super-fast Internet network
across Israel that would significantly upgrade the telecoms
landscape and compete with incumbent phone and cable companies.
In one of its most ambitious projects, the government
earlier this year gave the go-ahead for state-run utility Israel
Electric Corp (IEC) to find investors to build the
network using fibre optic cables, which can provide Internet
speeds of 1 gigabit per second - or as much as 100 times what is
IEC said on Wednesday that Viaeuropa's bid, chosen by a
quasi-governmental selection committee, will be analysed over
the next month with the hope that the network can start to be
deployed by the end of 2013.
"This telecoms venture will ... put Israel on par with
developed countries," said Yiftach Ron-Tal, IEC's chairman.
The process was delayed five times and by seven months amid
limited participation. The government was forced to sweeten the
terms of the project to the winner, such as raising the stake of
the chosen group in a new private company to 60 percent from 51
percent. IEC will hold 40 percent of the company, which will
build and operate a fibre-to-the-home (FTTH) network.
Initially, four groups submitted bids but just one made it
until the end, as two of the other companies joined up with
Viaeuropa holds half of the consortium, four other companies
- including Israel's Rapac Communications and Infrastructure
and BATM Advanced Communications - will hold
12.5 percent each.
The project is estimated to cost billions of shekels to
deploy some 25,000 km of fibre optics - 70 percent of which will
be above ground to keep costs down. The government seeks to
cover two-thirds of Israel by 2020. IEC already has close to
3,000 km of fibre across the country.
Using fibre to the curb and standard copper lines to the
home, Bezeq - Israel's largest telecom group - offers
Internet to 1.15 million customers for a 59 percent market
share. Cable company HOT has 41 percent.
Both companies offer speeds up to 100 megabits per second
but most Israelis surf at speeds of 5-10 megabits, which is
deemed adequate for downloading and streaming video and music.
Upload speeds, though, are no more than 1-1.5 megabits. With
fibre optics, 1 gigabit per second of upload and download can be
reached, allowing for improved interactive services.
The biggest winners of the fibre deployment are expected to
be Israel's top mobile phone operators, Cellcom and
Partner Communications, which bought companies that
offer Internet services and seek to develop Internet TV.
But they now rely on the HOT and Bezeq infrastructures,
limiting their own offerings, while Bezeq has started its own
FTTH trials. Both companies have said they welcome new