Speaking to "Globes" news editor Bar Lavi, Bezeq chairman Tomer Raved told the Globes Israel Business Conference about the company’s investment in infrastructure since the start of the war, competition in the telecom market, and Israel’s place as a geographical bridge between east and west.
Lavi said that while Raved was only 40, as an investment banker he had already advised giant companies like Google and Disney, and closed deals worth $500 billion. Since 2020 he has been executive chairman of Bezeq, Pelephone and Yes.
You have just returned from a trip around the world - what do you hear from foreign investors?
On the whole, Raved is optimistic. "We have seen over the past two decades more and more foreign investors coming to Israel because they see that, even now, we know how to deal with crises better than any other country," he said. "We also have great human capital, and there is macroeconomic stability here. Even in a pessimistic scenario, we will only have a 70% debt-to-GDP ratio. The geographical location plays a role here in both the macro and micro. Even during Covid, we saw the Israeli market developing."
According to Raved, the period when investors actually hesitated was not following the war: "We saw investors sitting on the fence precisely in the year before October 7, because of the political instability. If anything, over the last year they realized that the rebound was on the way. We are on the way to a regional arrangement, and we have a location that connects East and West. Unless you think that Lebanon and Syria are an option..."
"The Israeli economy surprises every time anew"
Lavi remarked on Raved's optimism. He responded: "My forecast is optimistic, because I listen to senior figures in the business world here and abroad. I say to both the US and Israeli governments: There is only one direction, a hostage deal followed by a regional arrangement. This will increase the market from 10 million to 100 million people.
"We completed a project to connect a cable from Saudi Arabia to Europe before October 7. There are opportunities here for all sectors of the economy, from transport to communications. We saw this in the 'Abraham Accords', and we will also see this in the 'Abraham Isaac and Jacob Accords'.
"The Israeli economy surprises all of us every time anew. Nobody imagined that the shekel would be stronger after the rating downgrades than on October 6th."
How has Bezeq coped with the past year?
"We have been in the investment stage of the fiber optic project. We invested NIS 10 billion over 5 years. Our network saw a surge on October 7th, it was a peak for many years, and the network survived.
"Since October 8th, we have invested over NIS 2 billion in infrastructure, at the same pace and more, because we understood that Israel's need in the near future is exponential growth. We have 10,000 employees, 1,000 of whom are reservists. We support them in the reconstruction of infrastructure under fire all year round. In all sectors, segments and areas of the population. The reconstruction of infrastructure continues. Bereavement and activities by reservists will continue with us in the short and medium term."
A bridge between east and west
Our situation in landline internet is excellent, 10th in the world, but in cellular we are in 66th place. How do you explain that?
"We were in 80th place and reached 10th place in landlines. Soon we will be in 8th place," promises Raved. "We invested in optical fiber, and 60% of the population has already switched to fiber, and I hope that the entire public is connecting. We are after a lost decade of cellular that only began to recover in recent years. The introduction of 5G will bring results, and in every element of communications, technology and AI, we need to be leaders. We will also rise in cellular, slowly."
The television market is on the verge of a revolution, there are possible mergers. Where will the market be in a few years?
"The television market is competitive. Telecommunications in general, in terms of cost to the consumer, are among the lowest in the world. There is a healthy rise in competition and infrastructure sharing, and fewer mergers. This is an evolution that corresponds with what is happening in the US, where we see complete consolidation. The market in Israel is competitive, and rational. The lack of competition in the past led to a lack of investment in infrastructure but that is no longer the case."
Raved stressed the importance of telecommunications infrastructure: "We are the infrastructure for everything - the startup nation, connectivity to the world, the screen to which we are glued throughout the day. This has made us invest in the network as much as possible, because the goal is good. This is what will allow Israel to be the bridge between east and west. Not many private business companies can say that they invested NIS 10 billion shekels in infrastructures without subsidies and refunds."
The Globes Israel Business Conference is held in collaboration with Bank Hapoalim and The Phoenix Holdings, and is sponsored by El Al, Bezeq, Nespresso, Wolt, Dell, the Israel Medical Association, Energean, the Jewish National Fund, BlackRock, Playtika, Meta, Strauss Group, BAZAN Group, and MSCI, with the participation of Mekorot, The Port of Ashdod, and the Israel Innovation Authority.
Published by Globes, Israel business news - en.globes.co.il - on December 8, 2024
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