 The
Internet giant at the heart of the Middle East
By Qmars Safikhani
|
Qmars is
responsible for Teleconomy’s quantitative
arm, figureSeeq, and he specialises in the telecoms
and IT sectors, analysing and processing trend
and forecasts statistics by building econometrics
models for the new digital economy.
|
The information technology revolution has had a
low profile in the chessboard of power struggles that
categorise the Middle East, but one thing is now clear.
Israel, one of the most intricate pieces on the board,
has emerged as a regional IT giant. By capitalising
on technology accumulated from its vaunted military-intelligence
superiority, Israel is brimming with thousands of
IT startups, and a large number are now registered
on the NASDAQ.
Mobile
With a population of over 6 million people, according
to figureSeeq the Teleconomy multi-channel statistics
database, the country in Q3 2002 has 4.54 million
mobile phone subscribers and the penetration rate
is rapidly approaching 100 percent. Moreover, from
this September the 3G networks has been rolled-out
by Pelephone which costs around 150 million dollars.
This puts the country ahead of many European countries
in terms of 3G networks, but the high penetration
of mobile phones in the country is not surprising
given that for most Israelis mobile phones are regarded
as an essential security supplement.
|
mobile
phone
|
3Q
2001
|
4Q
2001
|
1Q
2002
|
2Q
2002
|
3Q
2002
|
4Q
2002
|
|
2G mobile phone subscribers (million
units)
|
4.37
|
4.40
|
4.49
|
4.50
|
4.49
|
4.48
|
|
2G mobile phone subscribers (per 10,000
inhabitants)
|
7,357
|
7,402
|
7,444
|
7,468
|
7,446
|
7,436
|
|
2.5G mobile phone subscribers (million
units)
|
0.00
|
0.00
|
0.01
|
0.02
|
0.04
|
0.06
|
|
2.5G mobile phone subscribers (per
10,000 inhabitants)
|
0
|
7
|
15
|
29
|
66
|
95
|
|
3G mobile phone subscribers (million
units)
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
|
3G mobile phone subscribers (per 10,000
inhabitants)
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total mobile phone subscribers (million
units)
|
4.37
|
4.40
|
4.50
|
4.52
|
4.53
|
4.54
|
|
Mobile phone subscribers (per 10,000
inhabitants)
|
7,357
|
7,409
|
7,458
|
7,497
|
7,512
|
7,531
|
|
FigureSeeqTM
|
|
|
|
|
|
|
Internet
|
Internet
access
|
3Q
2001
|
4Q
2001
|
1Q
2002
|
2Q
2002
|
3Q
2002
|
4Q
2002
|
|
Internet access (million units)
|
1.63
|
1.78
|
1.90
|
2.01
|
2.13
|
2.25
|
|
Internet access (per 10,000 inhabitants)
|
2,748
|
2,991
|
3,149
|
3,331
|
3,530
|
3,726
|
|
FigureSeeqTM
|
|
|
|
|
|
|
Since the mid-1980ˆs Israel has made itself part
of the worldwide development of the Internet. It was
academia that spurred the first Internet growth and
it has continued to grow with Israeli government supervision
and regulation. IBM supplied several universities
access to the academic BITNET network in 1984 and
in 1988 the Israeli Academic Network (ILAN) was formed.
The centre manages the network and maintains the connections
of local universities to the Internet, through hook-ups
to the U.S. and Europe.
The government later allowed the Centre to connect
corporations and other non-university organisations
involved in R&D to ILAN, while the Ministry of
Communications allowed Internet providers to connect
the public to the Internet, as long as they obtained
a state license to do so. The Communications
Ministry relaxed its restriction in mid å90s and consequently
the Internet began to grow rapidly.
In the Q3 2002, there are nearly 115,000 businesses
and 820,000 households with Internet access.
Israel has 3.48 million fixed phone lines and a
high teledensity rate that is the highest in the Middle
East. But what has been particularity lacking has
been the introduction of new services, such as high-speed
Internet access.
The price of Internet use in Israel is also among
the highest in the world, resulting from the monopolistic
structure of the industry. This tight state
control has affected both telephone and Internet rates.
As the result Israelis pay a high price for Internet
service and receive in return a slow and 'crowded'
infrastructure. The average cost for an hour's surfing
on the Internet is between US$1.1 and 2.4.
|
Online
households
|
3Q
2001
|
4Q
2001
|
1Q
2002
|
2Q 2002
|
3Q
2002
|
4Q
2002
|
|
Online households with narrowband access
(million households)
|
0.51
|
0.62
|
0.67
|
0.72
|
0.76
|
0.81
|
|
Online households with narrowband access
(% of total households)
|
2,860
|
3,487
|
3,730
|
3,972
|
4,212
|
4,451
|
|
Online households with broadband access
(million households)
|
0.02
|
0.04
|
0.04
|
0.06
|
0.06
|
0.08
|
|
Online households with broadband access
(% of total households)
|
106
|
227
|
223
|
333
|
332
|
442
|
|
Online households (million households)
|
0.53
|
0.66
|
0.71
|
0.78
|
0.82
|
0.89
|
|
Online households (% of total households)
|
2,966
|
3,714
|
3,953
|
4,305
|
4,544
|
4,893
|
|
FigureSeeqTM
|
|
|
|
|
|
|
Information Communication technology
In 2000, Israel had a surplus of nearly 7 billion
dollars in its ICT export, a clear leader in the region.
The volume of ICT exports represents nearly 30% of
the countryˆs total export. The Israeli government
is adopting the latest economic development theories
based on using human resources as the main source
of economic development.
In the short term, Israelˆs prosperity may be subject
of social and political turmoil caused by conflict
with its neighbours, but the long term prosperity
may depend on how those expenditures on ICT turn into
the peaceful process of economic development rather
than military action.
|
Value
of national IT & Telecoms revenue (US $bn),
2001-2006
|
|
IT & Telecoms market
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|
Total IT
|
2.10
|
2.23
|
2.25
|
2.24
|
2.24
|
2.27
|
|
Total Telecom
|
5.43
|
5.46
|
5.58
|
5.67
|
5.77
|
5.86
|
|
Total IT & Telecom
|
7.53
|
7.69
|
7.83
|
7.91
|
8.01
|
8.13
|
|
FigureSeeqTM
|
|
|
|
|
|
|
|
FEEDBACK