Market Study Just Published: Israel Telecommunications Report 2010

Feb. 13, 2010 - PRLog -- Strong growth has continued in the Israeli mobile market, with the country's four operators bringing in 137,000 net additions during the first quarter of 2007. This follows a better-than-expected performance in 2006, when our original full-year forecasts were exceeded by the end of the third quarter. As it was, the market ended the year with 8.399mn subscribers, up by 6.7% on 2005. With penetration now well over 100%, this growth is coming almost entirely from multiple SIM ownership. While this phenomenon has pushed penetration rates as high as 150% in some European markets, figures such as this inevitably include large numbers of inactive subscribers. Furthermore, increasing rates of multiple SIM use contribute to falling revenues per registered SIM card. Indeed, figures from Partner Communications, the only operator to provide regular ARPU figures, reveal a decline of almost 7% in the six months to March 2007. In light of this, we believe that moving forward, mobile operators will concentrate on improving the value of their existing subscriptions, rather than chasing any large increases in total subscriber numbers. Indeed, despite the saturated nature of the market, operators have already proved reluctant to enter into a price war. We therefore believe that growth rates will tail off sharply in the latter part of 2007 and beyond, with penetration expected to rise by just three percentage points during 2007 to 120%. Increasing efforts by mobile operators, and in particular those of Partner, have also seen a change in attitude by Israelis over 3G services. The No.2 operator reported a 3G subscriber base of 333,000 at the end of March 2007, an increase of 156% in the space of one year. This growth has been aided by greater 3G handset availability and the increasing range of services available over 3G. The result of increasing 3G use is a rise in the contribution of data revenues. At Partner, non-voice services accounted for 12% of total service revenues in Q107, compared with 10% in Q106. Turning to our business environment rankings for the Middle East, Israel remains at the top of our regional table. Once again, the country's high level of telecoms market maturity, as witnessed by the aforementioned increase in 3G take-up and the ongoing growth in the broadband market, is complemented by a highly competitive environment. The Israeli market also benefits from a strong and independent regulator.

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