Israeli carriers selling 5G, but not developing network
Fifth generation (5G) mobile technology is becoming widespread around the world, and the Ministry of Communications has been promoting its implementation in Israel as well. In August 2020, the ministry concluded a tender for 5G frequencies.
It thus appears as though Israel has joined the list of countries in which the technology is available, but in practice there’s a long way to go. So far, the mobile carriers have given priority to marketing efforts to raise subscriber numbers for 5G, and have invested less in developing applications, sites (base stations where antennas and electronic communications equipment are placed) and infrastructure that will enable it to operate.
At this stage, each of the mobile carriers in Israel has only a few hundred partial sites. The sites are not connected to public infrastructure designed for 5G, but function independently, and so their capabilities are limited. In other words, in exchange for buying the prestigious package, users receive a 5G antenna signal with an indicator on their devices, and slightly faster speeds than on the 4G network. Pretend 5G.
Failed attempt to create competition
In the frequencies tender, the Ministry of Communications held an important card vis-à-vis the mobile carriers in the Israeli market: 60 mega of 5G frequencies in the 3.5 gigahertz range. The frequencies would be earmarked for new players, the aim being to encourage competition in the mobile telephony market and spur the carriers to accelerate solutions for private networks. Because of thin demand for frequencies on the part of new players, however, the ministry allocated them to existing carriers.
When the ministry allocated frequencies for 4G, Partner led the roll-out of the network around Israel. In the current tender, the ministry apparently hoped that this time too there would be a company that would lead the entire market, but this did not happen.
The mobile carriers do see some growth potential in revenue from selling 5G packages, but at this stage it does not look as though they intend to step up its development, especially as they do not know how profitable it will be.
“Telecoms market at start of revolution”
The tender presents a considerable challenge to the Ministry of Communications: on the one hand, it seeks to introduce new players into the mobile market in order to boost competition, while on the other hand it does not wish to damage the existing carriers through that. The process will complement the fiber-optic rollout.
Oren Gabbay acts as a strategic consultant to mobile carriers in Israel, and has been active in the market for many years. He recently started to lead an innovative venture: 5G operating fully in the Shlomo Insurance Stadium in Petah Tikva. “The major cellular carriers will not be able to stay behind for long,” he says, “and in the near future they will have to make difficult decisions, from setting up public 5G core to adapting the networks that carry Internet traffic to the sites. and back to very high speeds. “
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Gabbay says that elsewhere in the world there are dozens of public cores, millions of sites, and tens if not hundreds of millions of users. “The carriers have to realize that the difficult financial problem in which they find themselves is going to be solved through new applications that will come in with the 5G infrastructure, at first on private networks, and later on the public networks. This is new money , the telecommunications market in Israel is at the start of a revolution, and from here the companies can only take off. They will have to take into account that the threat to them is not just from within Israel, but from the giant international cloud companies that see themselves as global carriers. This is a complementary step to connecting end-user computing and the small clouds, which are a complementary and inseparable part of 5G. Anyone who fails to read the picture and gear up in advance will be left behind. “
Apart from competition in the cellular market, Ministry of Communications officials will also have to decide on another question related to 5G. A further call for proposals was recently published relating to the allocation of frequencies in the 26 gigahertz range and the 2,600 mega range that could be used for 5G. The ministry hopes that through the right allocation of frequencies, it will be possible to accelerate the penetration of 5G in Israel.
Cloud giants also interested in 5G
The Mobile World Congress recently took place in Barcelona. May companies participated, including the world’s leading cloud companies. Among the most prominent themes of the Congress was the entry of these companies, the likes of Amazon and Microsoft, into mobile telecommunications. It seems, as Gabbay says, that the cloud companies understand that unless they are at both ends of the network, they will be at neither, and that is why they are getting into 5G.
This represents a real threat for the Israeli mobile carriers, and it was not for nothing that they reacted sharply to the Ministry of Communications’ proposal to bring additional players into the market. As far as they are concerned, the desire of the ministry to push in the direction of innovation should not be at their expense. They do believe that bringing new players into the market will strengthen competition over 5G, but they argue that competition is increasing anyway.
The fog of uncertainty surrounding the potential of 5G is clearing, as manifest in the development of new applications that require 5G infrastructure. The signals were there at the Mobile World Congress, as mentioned, and also in the high response to the Ministry of Communications and Innovation Authority’s 5G pilot program. There have also been several private 5G projects, such as the one at Shlomo Insurance Stadium, and also at Dead Sea Works and Mekorot, video transmission form multiple smart urban cameras over 5G cellular infrastructure, a pilot program at Rambam Hospital in Haifa, and others .
“Globes” inquiries found that in the pilots program that recently ended, dozens of applications were submitted for finance for innovative trials, indicating that processes that are already much more than first buds are gathering pace.
Published by Globes, Israel business news – en.globes.co.il – on April 19, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Fifth generation (5G) mobile technology is becoming widespread around the world, and the Ministry of Communications has been promoting its implementation in Israel as well. In August 2020, the ministry concluded a tender for 5G frequencies. It thus appears as though Israel has joined the list of countries in which the technology is…