Ovum: FTTx expansion in cards for Israel

In an article on her company’s website, Ovum Principal Analyst Julie Kunstler asserts that FTTx penetration in Israel is poised to grow significantly from its current 1% level, thanks to recent government initiatives.

In an article on her company’s website, Ovum Principal Analyst Julie Kunstler asserts that FTTx penetration in Israel is poised to grow significantly from its current 1% level, thanks to recent government initiatives.

Several PON systems and technology developers -- including systems vendor ECI Telecom and chip makers Broadlight and Passave (acquired by PMC-Sierra) -- call Israel home. According to Kunstler, this fact led Israel’s Minister of Communications Moshe Kahlon to wonder why the country’s homegrown expertise had not yet translated into significant FTTx deployment. Kahlon thus approved a pilot FTTx rollout by Israel Electric Corp. (IEC), which included a country-wide license to expand the network (as long as IEC owned no more than 49% of the FTTx venture).

To help fund the effort and complete the ownership structure of the nationwide FTTx network, the Israeli government plans to issue a tender in early August. The Ministry of Communications expects more than 15 banks will respond, Kunstler reports.

Kunstler asserts incumbent telco Bezeq will have to respond to this new competition. While it could do so independently, Kunstler believes a partnership with IEC and the participating financial institutions would be a more efficient and sustainable approach.

Regardless of who is involved, Kunstler says a PON-based approach would make the most sense for FTTx expansion, for several reasons:

  • More than 90% of Israel’s 7.7 million people live in urban areas, which dovetails well with PON’s point-to-multipoint architecture.
  • Israel’s GDP is more than $25,000 per capita, which suggests an adequate number of people could afford to subscribe to PON-enabled services.
  • Israelis already have adopted fixed broadband services; 80% of households already subscribe to DSL or cable services.
  • The majority of existing electricity and communications cabling infrastructure in the country is aerial, which would make deployment cheaper than having to trench.



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