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World Bank: Palestinian mobile sector loses $1 billion over 3 years

March 31, 2016 4:25 P.M. (Updated: April 2, 2016 9:32 A.M.)
A Palestinian woman checks the display window of a mobile phone shop on Wednesday in the West Bank city of Ramallah. AFP/File
BETHLEHEM (Ma’an) -- The Palestinian mobile sector has lost more than $1 billion in revenue between 2013 and 2015, according to a new report by the World Bank.

The World Bank listed several constraints that contributed to heavy losses sustained by mobile telecoms companies in the Palestinian territory, including the presence of unauthorized Israeli operators in the Palestinian market and Israeli restrictions placed on the import of equipment for telecom and ICT companies into the territory.

Years of delay in mobile broadband and a lack of an independent regulator have also taken a heavy toll on the sector.

The direct impact of the struggling telecoms sector on the economy was estimated to represent up to three percent of the Palestinian Authority’s total GDP. The Palestinian Authority's fiscal losses for the same three-year period were as high as $184 million, the report said.

"With unemployment rate at 26 percent, the Palestinian telecom sector has the potential to boost the economy and create job opportunities," the report quoted Steen Lau Jorgensen, World Bank Country Director for West Bank and Gaza as saying. "In order for that to happen, Palestinian operators should be able to access similar resources as their neighbors."

In November, Israel and the Palestinian Authority signed an agreement to enable long-awaited 3G mobile access in the occupied Palestinian territory.

Israel had so far refused to provide mobile phone operators with additional 2G frequencies, let alone 3G or 4G technology, which was offered to six Israeli companies in January 2015.

Despite last year’s agreement, “Palestinian operators remain at a competitive disadvantage because Israeli operators have 3G and 4G capabilities and are able to attract higher value customers,” the World Bank said.

Over 20 percent of the market volume in the occupied West Bank is captured by unauthorized Israeli operators, according to the report, largely due to the fact that Palestinian companies do not have access to the more than 60 percent under Israeli military control known as Area C.

Palestinian mobile operators are also required to go through an Israeli-registered company to access international links.

“While international practices commend competition in the sector, the second Palestinian mobile operator Wataniya has not been able to start its operations in Gaza due to Israeli restrictions on accessing spectrum and importing material. As a result, Gaza remains a mobile-monopoly market structure,” informed the World Bank.

The lack of access to 3G mobile technology in the occupied Palestinian territory has long provided an added obstacle to economic and technological growth. A report released last year by the Palestinian think tank Al-Shabaka said that operators in Palestine lost an estimated $80 to $100 million annually as a result of the lack of 3G.

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