Minister of Communications, Dr. Shlomo Karhi: “We are implementing another reform to reduce the cost of living in Israel without compromising on quality. We have reduced the wholesale price of fiber optics by 20%, equivalent to an exemption from VAT on internet infrastructure, and this is money that will go directly into the pockets of Israeli citizens, God willing, in the coming months.
We are creating new rules of the game here: more competition, more investments, and advanced infrastructure to every home across the country, from the Negev to the Galilee, at a competitive price.
This reform promises faster, more stable, and cheaper internet – and establishes Israel as a global fiber optic powerhouse. This is a true free economy, with public responsibility. This is how prices are lowered. This is how competition is strengthened. Power is transferred to the consumer.”
Director General of the Ministry of Communications, Elad Madsi:
“The internet pricing reform reflects an optimal balance between reducing the cost of living here and now, and expanding the deployment of advanced infrastructure that will serve us all in the long run. The dramatic reduction in wholesale tariffs, alongside the creation of regulatory certainty for smaller companies, will translate into attractive prices for the Israeli consumer.
At the same time, the professional framework we have developed is designed to push the large companies out of their comfort zone and incentivize them to invest now in deploying independent fiber optic networks. The current investment in deploying multiple fiber optic infrastructures is a critical growth engine for the Israeli economy, will serve the public, and ensure competition and high quality for decades to come.״
Highlights of the reform and its impact on consumers:
1. A significant reduction of 20% in wholesale fiber optic tariffs paid by internet providers to Bezeq. The price will be immediately reduced from 72 NIS to 58 NIS per customer connection to fiber on Bezeq’s infrastructure. The new tariffs will remain fixed for the next five years and will not be linked to the index, allowing for long-term planning and low prices in the long run. Given the competitive structure of the market and the multiplicity of players, it is estimated that this saving will be passed directly to the end consumer and will be reflected in a reduction of the monthly price in the near future.
In addition, it was determined that the large telecommunications companies (Hot, Partner, and Cellcom) will be able to benefit from the regulated wholesale tariff for only two and a half years, in a way that will incentivize them to invest in independent infrastructure to ensure their ability to compete in the future.
At the same time, smaller companies, which already offer fiber optics at significantly lower average prices than those offered by the large companies, will benefit from the reduced and fixed regulated wholesale tariff indefinitely (five years at 58 NIS and a subsequent update of the regulated price), thereby strengthening their ability to compete with the large companies, similar to the competition that opened up in cellular services through small companies that leveraged existing infrastructure.
2. Incentivizing Investment and Encouraging Competition: The new regulations further reduce the cost of deploying independent infrastructure on Bezeq’s infrastructure by 30% – an accumulated reduction of 60% in the last two years. The new price will be 180 NIS per kilometer of deployment. In addition to reducing the existing access tariff, the Ministry is launching tariffs for additional technological services that will reduce costs for providers investing in infrastructure and increase their flexibility.
3. Expanding Access to Bezeq’s Infrastructure for Customers of All Companies: The new regulations require Bezeq to provide fiber optics to all companies, including Hot, which is currently prevented from using Bezeq’s fiber optics. Today, over half a million households have Bezeq’s fiber optic infrastructure as their only option. The reform will also allow these customers to receive competitive offers from all telecommunications companies.
Reform Timelines and Goals: The implementation of the new wholesale price list will begin in mid-March. In parallel, in August 2028, price regulation will be removed for wholesale fiber optics for the large companies in the market.
These moves will strengthen Israel’s fixed-line telecommunications market as a multi-infrastructure market with advanced capabilities, and will ensure the accessibility of fiber optic infrastructure at a regulated price as needed, which will guarantee a high level of service and competitive prices over time.
The reform will ensure that every citizen, in the Negev, in the Galilee, in Judea and Samaria, and everywhere in the country, will have fast and stable internet at a competitive price, and will establish Israel’s position as a global leader in fiber optic deployment, while making the most advanced technology accessible as a nationwide standard.
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