Israel launches tender for 5G mobile services

The results of the tender will be declared by the end of this year with a launch in 2020 continuing through 2023.

Israel has launched a tender for 5G cellular services in the country.

Israel is expecting three groups to bid for 5G cellular frequencies, in a bidding that is expected to be fierce, the country’s telecoms regulator expects three groups to bid, including a combination of operators to cut down on costs.

Israel expects to announce the winners by the end of 2019 with a commercial launch date of early 2020 and continuing through 2023.

“We are aware of the companies’ current financial situation and the tender takes this into account,” said Communications Minister David Amsalem in reference to cash-strapped telecom operators.

Israel’s Communications Ministry stated, 5G is required to boost the country’s agriculture, health, and educational services; it will also help in developing smart cities and self-driving cars.

The country’s three main operators, Partner Communications, Cellcom, and Pelephone are struggling to turn a profit in a country with 9 million people and 9 mobile service providers following a sector shake-up in 2012.

As a result of this mix, cellular services have seen a sharp drop in prices. All-inclusive calling, surfing and text packages are on offer at a price of 29 shekels, just $8 a month.

According to analysts, although revenues from the mobile sector had fallen by 5.6% in 2018, telecom operators are likely to invest in 5G in order to boost their network capability and meet growing demand from subscribers.

As part of this tender, Israel is auctioning frequencies ranging from 700 MHz and 2100 MHz, which are also used for 4G, as well as 2600 to 3800 Mhz, which will be used exclusively for 5G services, including self-driving cars.

To help cash-strapped telecom operators, Israel is offering incentives of up to $141 million (500 million shekels), including delaying the need to pay for the license until 2022. The discounts will be provided to only those service providers who deploy at least 250 5G antennas.

“We built the tender so it might not cost anything to the companies,” said Ofer Raz-Dror, deputy director general of the ministry, adding Israel will not follow the high-priced tenders in Italy and Germany.

While Partner and Cellcom declined to comment on their plans, their smaller rival Golan Telecom stated it would bid together with Cellcom. HOT Telecom is likely to bid with Partner. Pelephone said it would participate.

“Golan will participate in the frequency tender because … it is important for us to be at the forefront of progress and to give our customers a quality network,” said the company.

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