The Information Technology Landscape in Israel

“Israel, a country lacking in natural resources but with a wealth of human capital, has an opportunity to take a central place in the world economy and attain high growth and economic independence.  Countries whose economies will be most advanced are those which will develop their human capital and create the conditions necessary for this Age; in other words, for the transfer of information by means of technology, especially the Internet.” (2)

Development of the Internet:

"Since the mid-1980’s Israel has been part of the world-wide development of the Internet. It was academia that spurred the first Internet growth and has been enabled to continue its growth with Israeli government supervision and regulation (2)".  IBM supplied several universities access to BITNET network in 1984 and in 1988 the Israeli Academic Network (ILAN) was formed.  "The center manages the network and maintains the connections of local universities to the internet, through hook-ups to the U.S. and Europe." (2)

The government later allowed the Center to connect corporations and other non-university organizations involved in R&D to ILAN, while the Ministry of Communications allowed Internet providers to connect the public to the Internet, as long as they obtained a state license to do so.  The Communications Ministry then ordered the Center to stop providing access to businesses (2). The Internet then began to grow rapidly...

Internet penetration in Israel is still enjoying rapid growth. The number of people online grew by 26% from 1999 to 2000.  While 40% of the population are Internet users, 47% are male and 34% are female. A further breakdown can be found in Table 1. (4)

 Source: (4)

Internet Use:

Of all internet users in Israel, approximately 75% of them use the Internet to search for information, 73% use it to e-mail, 59% for downloading files, 39% for joining chat rooms, and 29% use it to read online newspapers (11). Of all Internet users in Israel, 89% access the Internet at home, 32% at work, 21% at school and 9% other (11).

Usage at the office vs. home

There are 178,000 businesses that operate in Israel, of these, 78% (140,000) use computers. Of those that use computers, 64% (almost 90,000) were connected to Internet at end of 2000.  This was an increase from a year earlier, when 53% (77,000) were online. (10)

Statistics

Approximately 48,433 Internet Hosts exist in Israel, while there are 29,834 web sites. (3) About 920,000 households have at least one PC, while 57% of those households have one PC and 13% have multiple PCs. (3) 

The cost of the Internet

"Israel has 2.85 million fixed phone lines and a teledensity rate of 46%, the highest in the Middle East, according to Pyramid Research. But what has been particularity lacking has been the introduction of new services, such as high-speed Internet access." (10)

The price of Internet use in Israel is also among the highest in the Western world, resulting from the monopolistic structure of the industry.  This tight state control has affected both telephone and Internet rates. "Israeli users pay a high price for Internet service and receive in return a slow and 'crowded' infrastructure." (2)

Although the cost of Internet access is high, subscriber growth is increasing about 10% a month and is expected to grow at an annual rate of 15% through 2005. (1)

The average cost for an hour's surfing on the internet is demonstrated in Table 2 (1999). (2)

Table 2: Cost of the Internet

Source: (2)

Table 3: Cost of Phone Lines

Source: (20)

The Ultra-Orthodox Community

In January 2000, the Ultra-Orthodox community banned Internet use outside of work fearing that it could "lead young Jews astray." (12)  This notion could present a barrier of use of the Internet for certain communities.

DSL and cable modems are not readily available and broadband links are rare. “It is expected that once all regulatory hurdles have been dismantled, by 2005, broadband will have penetrated 31% of Israeli homes”.  Analysts also expect there to be over 800,000 broadband access connections in Israel, 120,000 lease lines to businesses, and 70,000 business and 600,000 consumer lines operating via ADSL technology or cable modem. (1)

Internet Service Providers:

Israel currently has over 40 Internet Service Providers (ISPs). Table 3 provides a break down of Israel's six leading ones: (3)

Table 3: Israel's Main ISP's

Source: (3)
 

Sources and Links                 About the Authors                    Back to IT Nations Page