Israel incentivises infrastructure deployment with subsidised tender

Israel incentivises infrastructure deployment with subsidised tender

Israel’s Ministry of Communications (MoC) has launched its first tender for the so-called ‘Incentive Areas’ that will likely not be covered by commercial fibre-optic deployments.

Fixed-line incumbent Bezeq is not obliged to install fibre infrastructure in areas of Israel where it will not see a return on its investment, so to incentivise providers to extend services to these regions, an inter-ministerial team proposed a plan that would allow operators to participate in tenders to receive subsidies if they opted to deliver coverage to these 244 Incentive Areas.

The Incentive Fund will be generated via a 0.5% revenue tax applied to all firms holding an Israeli communications licence with a turnover in excess of ILS10 million (USD3 million). Bidders in the tender must specify both where they intend to deploy services how much they require from the fund to do so.

The regulator has stated that it aims to award the funds to the lowest bidder for each Incentive Area, with grants of ILS80 million and ILS90 million up for grabs. Tender winners must also offer wholesale services to their rival providers via any infrastructure that they deploy using subsidised funds.

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