Israel: Investments in Smart City Projects, IoT/M2M and Advanced Technologies Such as G.fast to Support Market Growth
In 2016, Israel generated telecom service revenue of US$4.5bn, down by 0.6% over 2015, mainly due to a decline in mobile and circuit-switched voice revenue. Mobile data was the largest revenue-contributing segment and accounted for 27.9% of total service revenue in 2016, owing to rising adoption of smartphones and increasing availability of competitive bundled data plans.
It is expects overall service revenue to grow at a CAGR of 1.1% during 2016-2021 to reach $4.8bn by 2021. Growth will be driven by increased data usage, as a result of rising adoption of 4G and fiber-based fixed broadband services. The fixed segment will continue to dominate the market throughout the forecast period supported by growth in fixed broadband and VoIP segments.
3G was the most used technology in 2016, accounting for 82.0% of mobile subscriptions in 2016. Its share will decrease to 51.7% by 2021, due to customer migration to a more advanced 4G network. 4G subscription shares will rise to 47.0% of total mobile subscriptions by 2021, owing to increasing availability of 4G services and devices as well as growing demand for data-intensive mobile content. Fixed broadband lines will continue to grow in Israel, with penetration to increase from 28.5% of population in 2016 to 35.9% by 2021. Growth will be driven by increasing investments in deployment of fiber across the country by operators and government.
Bezeq and HOT Telecom, the top two operators including their subsidiaries, which provide fixed, mobile and pay-TV services, accounted for 62.7% of total service revenue in 2016. Bezeq will continue to maintain its leadership position in the telecom market through 2021. Going forward, competition is expected to intensify with the expected entry of Marathon 018 Xfone (Xfone) as an MVNO and the seventh mobile operator in 2017.
Over the next five years, operators should capture opportunities in the data segment (mobile and fixed), which is expected to grow at a CAGR of 5.9% during the forecast period. Operators’ efforts in bringing innovative services - such as M2M/IoT, cloud and smart city solutions into the market along with network-sharing agreements aimed at enhancing coverage of their networks - will drive revenue growth and provide opportunities for investors and vendors.
The report Israel: Investments in Smart City Projects, IoT/M2M and Advanced Technologies Such as G.fast to Support Market Growth is a new Country Intelligence report, provides an executive-level overview of the telecommunications market in Israel today, with detailed forecasts of key indicators up to 2021. The report provides detailed analysis of the near-term opportunities, competitive dynamics and evolution of demand by service type and technology/platform across the fixed telephony, broadband, and mobile, as well as a review of key regulatory trends.
In depth, this report provides the following analysis -
Regional context: Telecom market size and trends in Israel compared with other countries in the region.
The regulatory environment and trends: A review of the regulatory setting and agenda for the next 18-24 months as well as relevant developments pertaining to spectrum licensing, national broadband plans, number portability and more.
A demand profile: Analysis as well as historical figures and forecasts of service revenue from the fixed telephony, broadband, mobile voice, and mobile data markets.
The competitive landscape: An examination of key trends in competition and in the performance, revenue market shares and expected moves of service providers over the next 18-24 months.
In-depth sector analysis of fixed telephony, broadband, mobile voice, and mobile data services: A quantitative analysis of service adoption trends by network technology and by operator, as well as of average revenue per line/subscription and service revenue through the end of the forecast period.
Companies mentioned in this report: Bezeq, Cellcom, Partner, HOT Mobile, HOT Telecom, Pelephone, Golan
Overall telecom service revenue in Israel will grow at a CAGR of 1.1% during 2016-2021, mainly driven by growth in the mobile data, VoIP and fixed Internet segments.
Mobile revenue will account for 41.1% of total telecom revenue in 2021, with mobile data accounting for 72.0% of mobile revenue in 2021.
3G will be the most adopted mobile technology through 2021. However, its share will decline during the forecast period as customers migrate to higher-speed LTE/LTE-A services.
The top two operators, Bezeq and HOT Telecom, accounted for 62.7% of overall service revenue in 2016. We expect competition to intensify as operators focus on fixed and mobile broadband expansions across Israel and services such as M2M/IoT and smart cities to drive additional revenue.
Operators will continue to focus on investments in 4G network expansion and fiber deployments to improve connectivity and cater to the rising data demand.
Reasons to buy
This Country Intelligence Report offers a thorough, forward-looking analysis of Israel’s telecommunications markets, service providers and key opportunities in a concise format to help executives build proactive and profitable growth strategies.
Accompanying GlobalData’s Forecast products, the report examines the assumptions and drivers behind ongoing and upcoming trends in Israel’s mobile communications, fixed telephony, broadband markets, including the evolution of service provider market shares.
With more than 20 charts and tables, the report is designed for an executive-level audience, boasting presentation quality.
The report provides an easily digestible market assessment for decision-makers built around in-depth information gathered from local market players, which enables executives to quickly get up to speed with the current and emerging trends in Israel’s telecommunications markets.
The broad perspective of the report coupled with comprehensive, actionable detail will help operators, equipment vendors and other telecom industry players succeed in the challenging telecommunications market in Israel.