Telecommunications in Israel

Israel's telecommunications system encompasses a fully digitalized conventional telephone network, mobile and internet services, broadcasting, undersea fiber-optic connections, and satellite links.[1][2] Regulation is centered in the Ministry of Communications, while the market has evolved from a ministry-operated telephone monopoly into a system shaped by privatization, licensed competition, wholesale access to infrastructure, and government programs supporting mobile and fiber deployment.[3][4]

Telephones were introduced to the territory by the British Mandatory authorities in the 1920s.[1] After independence in 1948, the Ministry of Posts — later reorganized as the Ministry of Communications — assumed responsibility for the inherited infrastructure.[1] The following decades brought steady, if incremental, expansion: international calls became available in 1950, inter-urban direct dialing followed in 1955, and by 1963 all telephone exchanges had been automated.[1]

Despite this progress, demand quickly outpaced supply. By fiscal year 1986, Israel had approximately 1.9 million telephones, yet more than 250,000 people remained on waiting lists — some of them for seven or more years.[5] A Library of Congress country study attributed the backlog to the difficulty of building exchanges and laying cables to keep pace with demand from residents, businesses, and the growing requirements of computer communications.[5] The same study nonetheless described the system as modern and connected to the rest of the world through cable connections and three ground satellite stations.[5]

A turning point came with the creation of Bezeq. One account places Bezeq's formation as a government-owned enterprise operating on a profit-and-loss basis in 1984; a separate account says it assumed responsibility for the national telephone network in 1985.[1][3] Both accounts describe a substantial backlog of unmet subscriber requests. The first says Bezeq cleared its waiting list by 1990 and then began promoting second telephone lines.[1] A later historical description characterized the conventional telephone network as fully digitalized, enabling services including call waiting, call forwarding, voicemail, caller identification, and the ability to dial back missed calls.[1] It also reported that most inter-urban links and much of the urban infrastructure used underground fiber-optic lines connected to the country's cable television network.[1]

By 1988, around 99 percent of Israeli telephones were connected to international direct dialing, and overseas connections were also available via undersea cable.[5] In April of that year, Israel announced a five-year telecommunications development plan costing approximately US$2 billion, which included an undersea cable link to Europe, satellite and cable-television facilities, and a multicapacity transatlantic cable intended to provide 600 channels of communication with North America.[5]

The foundational statute governing the sector is the 1982 Communication Law, which covers the telecommunications industry broadly — telephone, mobile services, satellite, and broadcasting.[6] The law restricts ownership of broadcasting licenses by foreign governments and grants the designated minister broad discretion in assessing national-security risks in the sector; it does not, however, define what constitutes such a risk.[6]

The government pursued a gradual and deliberate liberalization over subsequent decades, characterized by what one account describes as "managed competition" — licensing and limits on the number of competitors, restrictions on cross-market activity, and tariff regulation in certain segments.[3] A 13.8 percent stake in Bezeq was sold to the public in 1991, initiating the reduction of state control.[3] Competition entered the cellular market in 1994, when Cellcom was permitted to operate alongside Pelephone; international calling was opened to competitors Barak and Golden Lines in 1997; and Partner Communication entered the cellular market in 1999.[3] In a 2000 speech, U.S. Treasury Deputy Secretary Stuart E. Eizenstat said that after international telecommunications competition began in 1997, prices "dropped by roughly 80 percent across the board, overnight."[7]

The privatization of Bezeq was completed in October 2005, when the government transferred control to the Apax-Saban-Arkin consortium in what was described at the time as the country's largest privatization to that point.[8] The sale concluded a process of reducing state ownership that had begun in 1989 and was presented as part of a broader program to open telecommunications to competition.[8] At the time, Bezeq's subsidiaries provided cellular, international calling, internet, and multi-channel satellite television services.[8]

Wholesale-market regulation has played an increasingly important role in shaping competitive conditions. A Ministry of Communications policy document sets out a wholesale model intended to increase competition in fixed communications by requiring infrastructure owners to offer services — including bitstream access, unbundling, access to dark fiber and ducts, and transmission services — on non-discriminatory terms, with reference offers published for licensed service providers.[4] The Minister is given authority to set wholesale tariffs or terms in specified circumstances.[4]

The U.S. Department of State's 2025 Investment Climate Statement identified monopolies and oligopolies as stifling competition in several Israeli sectors, including communications infrastructure, noting that entities supplying more than 50 percent of a market are designated monopolies subject to government price controls.[9] That statement also reported that the Ministry of Communications had drafted a Communications Bill in 2023 and again in 2025 that included a local-content requirement for digital streaming companies; the bill had not passed as of August 2025.[9]

Israel's internet connections grew first within academia. In the summer of 1982, Shmuel Peleg and Azriel Rosenfeld arranged regular email exchanges between Israel and the United States; within months, Peleg persuaded the Hebrew University of Jerusalem to cover the cost of sending and receiving email.[10] In 1984, Israel became the first country outside the United States to connect to the academic CSNET network, with the Inter-University Computation Center coordinating connections among Israeli universities using funding from the Ministry of Science, the universities themselves, and the European Union.[10]

The transition to public internet access in the 1990s raised immediate concerns that Bezeq, as the national infrastructure provider, could dominate internet services, since internet providers initially had to lease international lines from it.[10] The Inter-University Computation Center and the Israel Internet Association proposed a domestic traffic exchange using local infrastructure, and a Ministry of Communications requirement to use it helped shape the market's early structure.[10] According to participants interviewed for a retrospective account, Bezeq's lack of cooperation delayed internet development by two years, while a later arrangement using satellite return links helped bring prices down by approximately 90 percent within a few months.[10]

Netvision began selling internet access in 1994, becoming Israel's first commercial ISP.[3] By the end of 1999, more than 30 ISPs were operating, with Internet Gold leading at 175,000 subscribers, followed by Netvision at 140,000, Bezeq International at 60,000, and Barak at 40,000.[3] Internet penetration stood at 164 users per 1,000 people at end-1999, with comparatively limited uptake attributed to English-language content, high tariffs, and the absence of high-speed home access.[3]

The structural separation between internet infrastructure providers and internet service providers — introduced in the 1990s specifically to limit Bezeq's dominance — remained in place for decades.[11] By 2020, however, a wholesale market giving competing providers access to Bezeq's infrastructure had reduced barriers to entry, and the Ministry of Communications and Ministry of Finance were planning to abolish the separation, subject to transitional rules, to simplify service provision while balancing competition and consumer convenience.[11]

The early cellular market grew quickly after Cellcom entered in 1994 and Partner in 1999.[3] By mid-2000, cellular lines had exceeded fixed lines, reaching 3.4 million, and approximately four million people — about 66 percent of the population — owned a mobile phone.[3] In a 2000 speech, U.S. Treasury Deputy Secretary Stuart E. Eizenstat described Israel as a recognized leader in telecommunications and data networking, noting that roughly a quarter of the population used the internet and that Israel had more mobile phones per person than the United States and more than twice as many per person as the European Union.[7]

At that time, four cellular operators covered the country: Pele-Phone, Cellcom, Partner, and MIRS, the last of which combined radio dispatch with cellular, pager, and mobile-PC services.[3] By January 2016, infrastructure data showed a market shaped by three dominant carriers: Partner held 29 percent of active cellular antennas nationally, Pelephone 28 percent, and Cellcom 27 percent, with Hot Mobile at 15 percent and Golan Telecom at 1 percent.[12] City-level figures showed variation: in Jerusalem, Cellcom led with 29 percent of antennas, compared with Partner's 32 percent in Tel Aviv and 31 percent in Haifa.[12]

A major reform unfolded in 2011–2012. Regulatory changes reduced barriers to switching providers and included changes to mobile termination rates and spectrum allocation, while Golan Telecom, HOT Mobile, and mobile virtual network operators entered the market.[13][14] Contemporary reports said that the resulting competition cut mobile-call prices by as much as 90 percent.[15] Average revenue per subscriber among established operators fell by NIS 73 per month, a decline of 60 percent, between January 2011 and May 2015, while total cellular-market revenue dropped 38 percent — from NIS 17 billion in 2010 to NIS 10.5 billion in 2014.[14] A 2019 Ministry report raised concern that continued price pressure might weaken operator incentives to invest in network upgrades.[15]

The Israel Antitrust Authority in 2016 opposed a proposed Cellcom–Golan Telecom merger, arguing that it could remove a source of competitive pressure.[14] By 2024, three cellular networks were in operation — Pelephone's, Cellcom and Wecom's, and Partner and Hot Mobile's — and the Ministry of Communications approved a measure allowing additional entities to operate 5G radio equipment using frequencies allocated to existing carriers, with the possibility of supplying up to 40 percent of each network's capacity.[16]

Planning for fifth-generation mobile infrastructure included a Ministry of Communications tender document that described 5G's intended capabilities: high data rates, greater network capacity and reliability, lower latency, and support for massive Internet of Things deployments and mission-critical applications.[17] The tender covered spectrum in the 700 MHz, 2,600 MHz, and 3,500–3,800 MHz bands and offered incentives including deployment grants and reductions in frequency fees tied to technical milestones.[17] Policy aims included meeting growing demand for cellular data, expanding network capacity, narrowing Israel's technological gap with more advanced countries, and encouraging investment.[17]

Six cellular providers applied in the 2020 frequency tender, in three groupings: Partner with Hot Mobile; Cellcom with Golan Telecom and Xphone; and Pelephone.[18] On September 29, 2020, the Ministry of Communications distributed frequency licenses, and the Communications Minister authorized Pelephone, Partner, and Hot Mobile to commence 5G operations.[19][20] Each of the authorized companies had deployed more than 200 antennas by that date, with substantial national rollout still required.[20] The deployed networks used Nokia equipment for the Cellcom-Golan and We4G grouping and Ericsson equipment for the Partner–Hot Mobile and Pelephone networks.[19]

INSS described the decision to deploy 5G without Chinese suppliers as a strategic choice made in the context of U.S.-China technological competition and reported that the Israeli security establishment had decided against Chinese companies' involvement in national communications infrastructure.[19] In 2020, INSS counted some thirty Israeli companies developing 5G applications and identified additional Israeli activity in the Internet of Things, apps, artificial intelligence, big data, and network security.[19]

A 2021 Ministry of Communications plan called for 2G and 3G networks to be phased out by December 31, 2025, freeing radio frequencies for 4G and 5G.[21] The announced transition included a ban from January 2022 on commercial imports of devices supporting only older technologies and, from January 2023, a prohibition on connecting new such devices to networks.[21] The source establishes the announced timetable rather than whether every stage was ultimately completed.

High-speed fixed internet expanded substantially from the mid-2010s onward. A wholesale-market reform for fixed communications, which began in May 2015, enabled competitors to deploy fiber-optic cables using Bezeq's infrastructure ducts.[15] From the start of 2018 to mid-2019, an additional 2 percent of households gained access to high-speed fiber, bringing the share with access to 20 percent.[15] The Ministry facilitated deployment by allowing companies such as Cellcom and Partner to use subcontractors.[15]

In September 2020, the government approved a fiber-optic network deployment plan that included exemptions for Bezeq and HOT from universal-service obligations, alongside an investment fund financed by telecommunications carriers to support rollout in peripheral areas.[22] The proposed network would replace existing copper cables and be open for competitors' use, with Communications Minister Yoaz Hendel describing the goal as extending advanced infrastructure across central, peripheral, and border areas, including for remote work and remote study.[22]

The pace of deployment accelerated sharply. Israel's Central Bureau of Statistics reported that at the end of 2021, more than half of households had access to fiber-optic internet infrastructure, while 17.9 percent subscribed to a fiber service — both figures nearly doubling during that year alone.[23] The report's infrastructure table listed household fiber access at 22 percent in 2018, making the end-2021 access rate more than twice the listed 2018 level.[23]

By early 2023, the Israel Internet Association's Internet Index reported that 35 percent of Israeli households were connected to fiber, roughly on par with the OECD average of 36 percent.[24] The reported average home-internet download speed reached 100.65 MB per second in December 2022, 10.1 percent above the figure from March of that year.[24] The four large internet providers together carried 83 percent of traffic: the Bezeq group at 27.39 percent, Partner at 23.07 percent, Cellcom at 18.66 percent, and Hotnet at 13.45 percent.[24]

By early 2024, fiber's share of fixed home internet connections had risen to 45 percent of Israeli households, up from 35 percent a year earlier; approximately 18 percent still used ADSL over telephone infrastructure and around 22 percent used HOT's cable network.[25] Average fixed-internet speed rose to approximately 150 megabits per second, up from around 100 the previous year.[25] At the end of 2024, a Calcalist report based on Ministry of Communications data found that 2.81 million Israeli households — 93 percent of all households — had access to optical fiber from at least one network, with Bezeq's network reaching 2.44 million households, IBC's 1.86 million, and Partner's 1.06 million.[26]

Broad-based internet adoption advanced rapidly in the 2010s and early 2020s. The Central Bureau of Statistics reported that approximately 90 percent of Israel's population aged 20 and above used the internet in 2020.[23] The gap between Arab Israelis and the broader population narrowed considerably between 2014 and 2020, and internet use among Ultra-Orthodox Jews aged 20 and above rose from approximately 56 percent in 2019 to 64 percent in 2020.[23]

In January 2016, Israel had 8,696 active broadcasting cellular antennas, with Tel Aviv accounting for the largest share at 939, followed by Jerusalem at 673, Haifa at 391, and Rishon LeZion at 228.[12] By early 2023, the Israel Internet Association reported 139.9 cellular subscribers per 100 inhabitants, placing Israel seventh among countries by that population-normalized measure.[24] Each of the four major providers — Pelephone, Cellcom, Partner, and HOT — maintained at least 97 percent national coverage for fourth-generation networks, with reported download speeds of 21–22 MB per second for most operators and 27.2 MB per second for Pelephone.[24]

A 2014 snapshot captured by the Jerusalem Institute for Policy Research found that 91 percent of Israeli households had at least one mobile phone, with rates reaching 93 percent in Jerusalem, 96 percent in Haifa, and 98 percent in Tel Aviv; smartphone ownership at the time was estimated at between 64 and 72 percent.[12]

Israel is connected to major commercial, financial, and academic data networks and integrated into international communications through undersea fiber-optic lines and satellite links.[2] Israeli-developed systems have also been reported to increase the capacity of digital satellite and fiber-optic telecommunications links by a factor of five.[1] An Israeli government trade-office article valued the telecommunications market at $4.4 billion in 2023 and projected annual growth of approximately 2 percent, identifying 5G, fiber optics, and mobile network operators as primary areas of continuing activity.[27]

A distinctive feature of Israel's telecommunications landscape is the development of "kosher" mobile and internet services tailored to the ultra-Orthodox community. The Rabbinical Committee for Communications worked with cellular providers to create devices and phone-number prefixes that identified lines as compliant with religious standards.[28] The kosher devices described by INSS block SMS, video, radio, camera, and internet access; devices intended for work allow more limited access, including email, WhatsApp, and websites approved by rabbis.[28] In 2014, Rabbis Kanievsky and Karelitz permitted kosher cellular internet specifically for livelihood purposes. INSS reports that cellular internet use among ultra-Orthodox users stood at approximately 15 percent before the permission and 30 percent afterward.[28]

A 2020 CBS social survey found that 61 percent of ultra-Orthodox respondents used the internet in some form, while 70 percent did not have a mobile phone with internet access, and 85 percent abstained from social networks such as Facebook, Instagram, and LinkedIn.[28] These figures, which describe different forms and degrees of access, illustrate the persistence of community-level distinctions within the broader trend of rising connectivity.

In August 2020, Communications Minister Yoaz Handel initiated a proposed reform that would have required the Rabbinical Committee to publish blocked telephone lines and the reasons for blocking them, and would have required kosher SIM cards to work in non-kosher devices and vice versa.[28] Ultra-Orthodox leadership strongly opposed the reform, arguing that removing identifying number prefixes would undermine the community's ability to distinguish kosher lines; critics also alleged that the Rabbinical Committee had at times acted arbitrarily in its blocking decisions.[28]

Telecommunications patterns during periods of conflict have been studied as indicators of public behavior. A 2013 academic study analyzed real-time mobile-phone usage data supplied by Cellcom during the 2006 war with Hezbollah in Lebanon and the 2008–09 war with Hamas in Gaza.[29] During the Lebanon war, calls originating within 10 kilometers of the Israel–Lebanon border decreased substantially — the decline was more than twice the comparable decrease recorded in the Gaza-border region during the later conflict.[29] Calls during both wars were significantly longer in duration.[29] The researchers found no significant change in calling patterns among Israelis outside the directly affected areas, raising questions about assumptions regarding collective solidarity and crisis communication behavior.[29]

During the Covid-19 pandemic, Israel's security and public health apparatus turned to telecommunications infrastructure for contact tracing. A critical account in SAPIR Journal argues that Israel activated a Shin Bet surveillance system known as the "Tool" for this purpose; it describes the system as containing telecom users' device locations, connected cell and antenna zones, metadata for calls and text messages, and internet browsing history, with health authorities supplying the Shin Bet with the names and phone numbers of people who tested positive so that nearby contacts could be identified.[30]

Several aspects of Israeli telecommunications policy have generated significant debate. INSS framed the exclusion of Chinese suppliers from the 5G rollout as a strategic choice by the Israeli security establishment in the context of U.S.-China technological competition.[19] The article also described differing approaches among governments toward Chinese telecommunications equipment, placing Israel's decision within a wider international security and technology dispute.[19]

Cellular liberalization sharply reduced consumer prices, but operator revenues also fell: total market revenue declined by 38 percent between 2010 and 2014, while a 2019 Ministry report warned that sustained price pressure could weaken investment incentives as network upgrades required substantial capital.[15][14] The Israel Antitrust Authority's 2016 opposition to the proposed Cellcom–Golan Telecom merger reflected a related concern that consolidation could remove a source of competitive pressure.[14]

Market concentration in fixed communications has also drawn attention. The State Department's 2025 Investment Climate Statement described communications infrastructure among the Israeli sectors where monopolies or oligopolies stifle competition, while the Ministry of Communications has considered whether regulated wholesale prices for competitors leasing Bezeq's fiber should be reduced or varied geographically as infrastructure competition develops.[9][26]

The kosher-phone reform proposed in 2020 became a dispute between the Communications Ministry and ultra-Orthodox political and religious leadership. The proposal emphasized transparency and interoperability, while opponents argued that changing identifying prefixes and SIM restrictions would undermine the community's ability to maintain its religious communications arrangements.[28]