Comm. Ministry launches race to build 5G mobile networks

The Communication Ministry published a long-awaited tender on Sunday for the construction of fifth-generation mobile networks, offering government incentives worth NIS 500 million ($140m.) to winning bidders.

Fifth-generation cellular network technology, known as 5G, touts surfing speeds approximately 20 times faster than current 4G networks.

“This is a technological move that will leave its mark for decades to come,” said Communications Minister David Amsalem. “The entry of this new 5G technology will kick off the smart digital revolution that will affect all aspects of our lives: smart homes, smart cities, smart medicine, bringing the periphery closer to the center, education, autonomous vehicles, advanced industry and more.”

Frequencies offered by the tender, the ministry said, will expand network capacity and provide a response to growing demand for broadband communications.

The ministry will provide grants worth up to NIS 200m. ($56m.) for operators constructing at least 250 5G broadcasting antennas.

In addition, while 5G networks could be launched as early as next year, tender payments will be postponed until 2022 to provide ample time to operators to divert financial resources to upgrading their networks.

Existing Israeli mobile operators will be able to compete for the tender by submitting joint proposals to secure bandwidth commencing from 700 megahertz (MHz) and 2,600 MHz offered by the ministry.

Bandwidth ranging from 3,500 to 3,600 MHz will be open to all bidders, encouraging competition for 5G services and infrastructure.

“The financial strength of [Israeli cellular network] companies at this time is no secret, and the tender takes this situation into account,” said Amsalem.

According to a ministry report published earlier this month, cellular firm revenues dropped by 5.6% in 2018 after suffering a 4.5% decrease in 2017.

Falling revenues are largely attributed to increasing tariff competition between firms, and consumers switching providers at almost unprecedented levels.

South Korea on April 5 became the first country to commercially roll out 5G technology, as three mobile carriers launched services. A couple of days later, US telecommunications giant Verizon launched its own service in parts of Chicago and Minneapolis.