Bezeq International Enters the Internet Arena

Bezeq International, a subsidiary of Israeli communication company and
phone service monopoly-holder Bezeq, has formally
announced plans to enter the Internet access market.

Six months ago, the company purchased the Internet activities of two small
Israeli ISPs, ISDN Net and Trendline. Now, Bezeq International will start a
campaign to attract new customers of its own.

Initially, Bezeq International invested NIS 20 million (US$4.9 million) in
replacing and upgrading the hardware systems bought from ISDN Net.
According to its own estimation, the company is now capable of serving half
a million customers.

The company targets new surfers, many who have heard about the Internet but
have never tried it, or who are afraid of the complexity of the new
technology. In order to attract this audience, the company has instituted a
1.5 million dollar ad campaign that will include television, radio,
newspaper and billboard coverage.

Bezeq International offers two connection deals: one deal allows five hours
of surfing a month for NIS 10 (about US$2.50), with NIS 5 (about US$1.25)
for every additional hour. The second
package allows unlimited surfing for NIS 140 (US$34) per month.

Another featured service offered through Bezeq International enables
international phone calls via the Internet using Vocaltec software, for 25
percent less than conventional international calls. The user talks into a
computer microphone and listens through the PC’s speakers. In order to
maintain voice quality, the call is transferred from Internet to regular
phone lines at the central Bezeq international exchange.

The three main ISPs in Israel, according to Bezeq, are Internet Zahav,
NetVision and Barak. The first two are Israeli Internet providers, whereas
Barak, like Bezeq International, is an
international telecommunications company which recently launched its foray
into the Internet access market.

The company estimates that approximately 200,000 Israeli households are now
connected to the Internet, of which about 50,000 are interested in
unlimited access time. In the coming year, these numbers will grow to an
additional 100,000 households, with a rise of tens of percentage points in
usage, according Uri Yogev, CEO of Bezeq International, who expects Bezeq
to target these ‘heavy’ clients.

Yogev also predicts that, in another four years, half a million Israeli
users will be connected to the Internet.