Area C and the Future of the Palestinian Economy by Orhan Niksic; Nur Nasser Eddin; Massimiliano Cali

Author:Orhan Niksic; Nur Nasser Eddin; Massimiliano Cali
Language: eng
Format: epub
Publisher: The World Bank

Frequencies

The Israeli Authorities have so far only released limited 2G frequencies to the two Palestinian mobile operators (18 percent of the 900 megahertz band and 4 percent of the 1,800 megahertz band). The two Palestinian operators serve more than 3 million subscribers with these limited frequencies, resulting in loads higher than specified by international standards and obliging them to build multiple towers close to one another to reduce congestion and maintain adequate service.

Israel’s failure to provide Palestinian carriers frequencies for 3G service represents a major competitive disadvantage and a threat to the future viability of the industry. Palestinian mobile operators do not have any access to the 2,100 megahertz band through which they would provide 3G services, and are unable to offer mobile broadband or high-speed data services to their customers. Notably, the demand for such services among Palestinian customers has been on the rise as the number of smart phone users in the Palestinian territories grew from 3 percent in 2010 to 17 percent over the last two years, even though they currently cannot access full features of the phone nor use mobile broadband. One of the Palestinian operators reports that some customers in this fast-growing category of users have already shifted towards Israeli firms to get 3G services. The operator also reports that Israeli companies are aware of this potential market and have recently been marketing 3G to West Bankers. If Israel does allow Palestinian access to the 2,100 megahertz band, Palestinian carriers will have to make sizable new investments in infrastructure—which again raises the issue of access to Area C. Area C offers ideal sites for 3G infrastructure that can simultaneously serve customers in Areas A, B, and C. Without such access, it would be extremely difficult for Palestinian carriers to compete with Israeli firms. The Palestinian mobile companies believe that as the number of smart phone users increases and the world moves on to 4G services, their very survival may depend upon being able to access 3G frequencies.

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