Israel to launch tender for conducting 5G spectrum auction

Israel is likely to launch a tender within two weeks for conducting 5G spectrum auction, Reuters reported.
Verizon 5G network by EricssonIsrael lags countries like South Korea, Switzerland, Britain and Spain that have already started to roll out 5G services.

A spokesman for Israel’s Communications Ministry said on Tuesday that the tender would likely be in a week or two.

The cost of building 5G network will be around 2 billion shekels or $560 million in Israel. Winners of the 5G spectrum auction need not build 5G network across the nation. Their main focus would be to move away from 3G network and strengthen 4G.

Israel’s Communications Ministry said late last year that it hopes to allocate 5G frequencies by the end of 2019 with 5G networks to commercially launch between 2020 and 2023.
According to earlier media reports, only the six main mobile operators would be eligible to bid for 5G licences, leaving out the three virtual operators.

Israel’s two largest mobile operators, Cellcom and Partner Communications, declined to comment on their plans. Both are expected to join with rivals such as HOT and Golan.

Bezeq Israel Telecom unit Pelephone, Israel’s third-largest provider, said it planned to bid alone.

Israel’s three main telecom operators are struggling to stay profitable in a country with nine million people and nine mobile providers.

Revenues in the mobile sector fell 5.6 percent in 2018 but cash-strapped carriers will probably invest in 5G to bolster their networks to meet growing demand, analysts say.

“The continued decline in revenues raises a real concern for the upgrade required in cellular networks, which will enable Israel to keep pace with the global progress in this area,” the telecom regulator said in a report on Tuesday.

But it added that in the next few years a “new balancing point will be required between the level of technology competition and the level of price competition, so mobile companies will have sufficient incentive to make the large investments required by upgrading 4G networks and switching to 5G.”

The ministry has said that 5G is necessary to develop health, agriculture and education, as well as smart cities and self-driving cars.

In 2018, Cellcom reported a loss of $17 million as compared with $30 million profit in 2017. The profit of Pelephone dropped 75 percent to $7 million and Partner’s profits fell 51 percent to $15 million.