A Talent For Telecommunications

Israeli telecommunications companies have penetrated high-tech niches in both the developed and the developing world. Local firms are also specializing in setting up basic infrastructures and enhancing existing infrastructure.

Israeli telecommunications companies have penetrated high-tech niche markets in both the developed and the developing world. At the same time local firms also specialize in setting up basic infrastructures and enhancing existing infrastructures.

Besides innovative technology and the ability to improvise according to circumstances, Israel's telecom success is due to its native brain power. The country has the most academic engineers and scientists per capita worldwide, excellent institutions of higher education and invests heavily in R&D. In addition to all this, a very high percentage of the nearly 700,000 new immigrants who have reached Israel from the former Soviet Union since 1990 are specialist scientists and engineers.

Many of Israel's telecommunications innovations are spin-offs from defense requirements, which have been applied to fill the need of the rapidly developing telecommunications infrastuctures.

For example, ECI Telecom has developed systems that can increase by eight times the capacity of digital satellite and fiber optic cable telecommunications links. The systems, which can expand the transmission infrastructure of both access and core networks, are sold to over 90 countries and customers including major telecommunications corporations of the west, like AT&T, Sprint, MCI and British Telecom, as well as many countries in Asia. A $60 million deal was recently signed with the Chinese government to upgrade the infrastructure there.

Through its subsidiary Bezeq Globe, Bezeq - Israel's telecommunications corporation - is installing infrastructures in Poland, Hungary and India and has constructed satellite stations in Kazakhstan and Uzbekistan. Israel's innovative technological spirit remains attractive to foreign investors as well as joint ventures and technological agreements. During a recent visit to Israel, representatives of the Singapore based British telecommunications giant Cable & Wireless, met with Israel's leading high-tech companies in the telecom sector - Tadiran, Telrad, Rafael, Geo Interactive Multimedia, Elisra, VocalTec, and ECI, and began negotiations for several joint agreements. Cable & Wireless already owns 10% of Bezeq.

Canadian-based telecom giant Northern Telecom has aquired a 20% interest in Telrad, a private Israeli firm that was instrumental in developing Israel's own telecom infrastructure. Telrad has developed leading edge ISDN, digital multiplexers, fixed wireless systems, and major services for the public and private digital exchange markets.

Israel's Nice Systems has signed a contract with the American Federal Aviation Administration to provide voice-data logging systems for 800 airports across the US. The systems are also used in stock exchanges and other institutions that need to record voice transactions. Nice initially produced eavesdropping equipment for intelligence agencies worldwide. "Israelis offer more tailored solutions to individual customers," explains Eli Ariel, a telecommunications consultant for the Ministry of Industry and Trade's Office of the Chief Scientist, "and they often go after niche markets that large corporations will not consider."

Teledata, for example, is successfully selling access network solutions in the Pacific Rim and Asia, while in Eastern Europe Connex Telecommunications is designing technology for the market's unique 3-wire line standard. Gad Line is selling its cable line technology in Brazil, Holland, Germany, China and an Argentinean recently acquired Tadiran's wireless local loops. In addition, local Israeli telecommunications firms, which range in size from start-ups to local telecom provider Bezeq, with annual sales of over $2 billion, some foreign giants have Israeli subsidiaries, most notably Motorola. Motorola Israel exports its advanced digital and analog systems to 25 countries in Europe, Asia and Africa and is currently setting up a cellular phone network in Ghana.

With telecommunications slated to continue as one of the world's fastest growing sectors, more and more Israeli start-ups are trying to get into the action. Some start-ups have developed "small office" telephone exchanges, for example, exchanges specializing in LAN infrastructures for transferring calls. In addition an Israeli company has devised a smart 3x12 exchange which can be used as a card in a PC file. Some Israeli firms have even surpassed their Silicon Valley counterparts, offering top-notch products for wireless communications and encryption, or compression schemes to move video data over cable lines.

One recent visitor to Israel was Jun Lee, president of Korea Telecom. "The potential in combining forces between Israeli and Korean telecommunications is limitless," he said, impressed by the array of innovative developments that he was shown.

Developed by the public sector as part of Israel's self-reliant strategy, Israel's telecommunications industry now profits the private sector, and the private investor.