By building a 25,000 km fiber network, the Israeli government believes it will be able to achieve two goals: bring higher speed bandwidth services to more people while increasing competition. But to do that, it needs a financial partner.
The participating investor in this project would own a 51 percent piece of what would be a new private company set to be formed in April next year, with state-run Israel Electric Corp (IEC) owning the remaining stake.
Lack of competition is what's driving the government to build a new player. Right now, the Israeli wireline network market is dominated by two main service providers--traditional telco Bezeq and cable MSO HOT.
This is not the first time Israel has moved to drive new competition in the country's telecom market.
Moshe Kahlon, Israel's Communication Minister, who said the telecom industry "is in need of a new player" previously awarded two wireless licenses to two new operators and has allowed other service providers to become Mobile Virtual Network Operators (MVNO).
There are a lot of high hopes the government has for this proposed network.
The government thinks its network will be able to deliver 100 Mbps speeds to 65 percent of the population by 2018 and the remaining popluation by 2020.
- Reuters has this article
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