AT&T Takes IBM Israel Clients

This week another step was taken in the transition process of moving
Internet activities from IBM to AT&T, a decision made after AT&T
established new subsidiary AT&T Global Network Services Israel. Now the new
company will provide Internet connections for clients of IBM Israel’s
Internet section.

AT&T acquired IBM’s International Internet activities last December for
US$5 billion. Today, IBM Israel has 6,000 subscribers, many of them
business accounts. Very few new subscribers have joined IBM Israel’s
network during the last two years, this was attributed to the fact that IBM
Israel was not prepared to incorporate new technologies (almost all links
were analog or frame-relay).

The main source of IBM Israel income has come from providing Internet
services to ISOC, the organization that provides Internet connections to
academic institutions in Israel.

Analyst Avi Weiss noted that Bezeq Zahav, the wholly owned subsidiary of
Bezeq, the Israeli communications company, also represents AT&T in Israel.
Today Bezeq Zahav has approximately 8,000 subscribers, especially from the
business sector, and continues to grow.

Agreements such as this demonstrate how Bezeq, the company that maintains a
monopoly on telephone communications within Israel, has gained a foothold
in the Internet market. Last week the company also acquired 50 percent of
Walla, the largest Israeli portal.

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