Bezeq (TASE: BZEQ) has announced the launching of Internet service at 5 Mbps. Bezeq also announced that it was focusing on providing content on Internet infrastructure, including multi-channel television. Internet protocol television (IPTV) is already available elsewhere in the world, and Bezeq wishes to supply content from YES, its satellite broadcasting subsidiary, on Internet infrastructure. As of now, however, the bandwidth that Bezeq provides is inadequate, and, more importantly, the regulator is not permitting Bezeq to carry out its plan.
Bezeq’s new services has apparently put the cable television companies, which provide a competing service, under pressure. They hastily announced today that they would provide the same service at the identical price, but only to the first 1,000 subscribers.
The new service is a major advance - 2.5 times as fast as the current maximum speed, and an average of five times the speeds actually available to most Israeli households, which vary from 750Kbps to 1.5 Mbps.
Initially, only a few thousand subscribers will use the new service, and a few tens of thousands for the first year or more. These numbers are small, compared with the 1.1 million households in Israel that have high-speed Internet hookups.
At the same time, it is quite possible that actual downloading speed will not reach 5 Mbps, owing to bottlenecks in the network (not between the call center and customer’s home). Bandwidth from the customer’s house (upstream) is 250 Kbps.
The main barrier to this service is its high cost NIS 149 per month (both Bezeq and the cable companies). This is a bargain price for one year, after which prices are due to jump to several hundred shekels (at least according to the plan). The cable companies announced that full price for the service is NIS 599. In addition, subscribers also must pay the ISP, as they do now. ISP fees for the new 5 Mbps service, however, will be much more expensive also NIS 149 per month.
A 1.5 Mbps high-speed Internet surfing package costs about NIS 100 per month for both the infrastructure provider and the ISP combined one third of the cost of the new service.
Published by Globes [online] - www.globes.co.il - on September 19, 2005