The Engineering and Licensing Division is responsible for and specializes in the various areas of telecommunications. Among other functions, it works on telecommunications policy; management of electromagnetic spectrum resources; licensing of services and equipment in all areas of telecommunications; supervision, monitoring, and technical coordination of broadcasting systems for the public; and satellite communications. The division has line and staff functions, and serves as a knowledge base and advisory body for the senior echelons of the Ministry in all areas of its responsibility. It has extensive international and national contacts and broad and intensive contacts with purveyors and recipients of services, entrepreneurs, and industrialists. The Division deals with a rapidly changing technological environment and advanced technologies and maintains constant contact with the leading professionals in the various communications fields.

The Division's tasks include: devising and formulating telecommunications policy; implementing policy; initiating legislation and helping the Ministry's legal advisor draft legislation in accordance with policy changes, international trends, and other technological developments; investigation and follow-up of advanced communication issues that are or will be changing (such as Europe '92, the GATT accords, direct broadcast by satellite [DBS], high-definition television [HDTV], telecommunications integration - communications, digital, and stereophonic broadcasts); preparation of standards and specifications for telecommunications services and equipment; setting standards for availability and quality of service; preparation for and activity in exceptional circumstances, including emergencies (management of the spectrum and emergency public broadcasts); publication of regular information about policy, trends, services, licensing, and equipment.

Radio frequency spectrum management: There is intensive and dense use of the electromagnetic spectrum in Israel - the result of the growing needs of a modern, developing economy, as well as the needs of the defense establishment. Other factors complicating frequency management include problems of coordinating with neighboring countries and various anomalies in wave propagation in the area. The Frequency Allocation Department of the Engineering and Licensing Division administers the spectrum, including planning, coordination, frequency allocation, licensing of activities (app. 20,000 license-holders), services, equipment, engineering, monitoring, and enforcement.

The Broadcasting Department is responsible for engineering policy regarding broadcasts to the Israeli public, broadcasting and reception standards, national and international coordination, frequency allocation, monitoring, and supervision. The Department is also responsible for development and renovation of broadcasting equipment belonging to the Israel Broadcasting Authority and for assistance to and coordination with Army Radio, the Second Channel, and the Voice of America project.

See: Israel Broadcasting Regulatory Administration (IBRA) Peled Committee Report

The Cable Television Department sets technical standards for cable television systems, and oversees implementation of the policies of the Cable Broadcasting Council regarding broadcasts, provision of services, and meeting the terms of the concessions.

The Computer Communications (Telematics) Department is responsible for the advancement of computer communications in Israel. It sets standards, helps in the development of computer systems in the govenrment and public sectors, and maintains ties with international bodies in the computer field.

 The total annual telecom equipment and services market in Israel is estimated at $3.7 billion, broken down as follows:

Bezeq, the Israeli National Telecom, holds an authorized monopoly of the national telephone infrastructure. Bezeq has annual sales of approximately NIS (New Israeli Sheqel) 9.3 billion and has eleven thousand five hundred employees.

Bezeq has completed 100% digitalization, which allows it to provide quality advanced value-added services to all of its customers.

Israel has 2.8 million main telephone lines which is equivalent to 47% penetration.

Two new facility-based international telecommunications services operators began activities in July, 1997, thus ending Bezeq's monopoly in this field. These new service providers, along with Bezeq International, are offering the Israeli public tariffs which are among the lowest in the world.

There are 2.8 million cellular telephone customers (47% penetration) serviced by three providers, Telephone and Cellular. A third license was awarded to Partner/Orange in February 1998, and the new licensee began operations in October 1998, according to the GSM standard.

A special Inter-ministerial Committee, The Rosenne Committee, appointed by the Minister of Communications, published its recommendations for implementing the government's liberalization policy of the local telecommunications sector. As of June 1, 1999, Bezeq lost it's exclusive rights in the domestic fixed services market in terms of infrastructure, transmission and telephony.

The Israel Broadcasting Authority operates two national television networks, seven national AM/FM radio networks, and 14 local FM radio stations, of which licenses were obtained by public tender.

There are three cable television operators, providing 550/750 MHz systems to their customers. Ninety percent of the population enjoys cable TV coverage, and seventy percent of Israeli households (1.1 million) subscribe to cable television.

A special commission, appointed by the Minister of Communications, on expanding and reforming the broadcasting sector, published its recommendations in 1997, which were based on the principle of "Open Skies". According to this principle, broadcasting both in the TV and radio sectors will be further liberalized. An Administration for Broadcast Services has been established in order to begin implementation of these recommendations.

The growing number of Israeli Internet service companies provide efficient and reasonably priced service to Israeli consumers.

In May, 1996, the Israeli commercial telecommunications satellite, AMOS, was successfully launched, to provide domestic services for television, radio and transmission. AMOS services are being successfully marketed internationally as well. 

The Government of Israel currently owns 54% of Bezeq’s shares. The remaining shares are divided between individual investors, and those traded on the Tel Aviv Stock Exchange, held by the public. The government is committed to the privatization of Bezeq, and further reduction will take place in the future, with the intent to pull out completely and have no involvement in Bezeq ownership.

There has been a separation between regulation and operation since the establishment of Bezeq in 1984. The responsibility for the country's communications was divided between the Ministry of Communications and Bezeq. As a result, regulation responsibility now belongs to the Ministry of Communications, while operations are performed by Bezeq.

Bezeq, the three cellular operators, and the three facility-based international telecommunications service providers are issued general operating licenses. In addition, the Ministry of Communications issues special licenses, which cover other activities.

The Ministry of Communications intends to establish an independent Regulatory Authority which will redefine the scope of direct government involvement in regulatory matters.

The Israeli telecommunications sector is on the threshold of a major restructuring. In the near future, licenses will be granted to additional domestic telecommunications operators, as Bezeq lost it’s exclusive rights in the domestic fixed services market as of June 1, 1999. The Ministry is currently in the process of preparing tenders to be published for WLL and LMDS.

A special Inter-ministerial Committee (The Rosenne Committee), appointed by the Minister of Communications, submitted its recommendations to implement changes in Israel's telecom sector, as follows:

1. Domestic telecommunications operators will operate in competition with Bezeq and will provide infrastructure, transmission and telephony services.

2. Personal Communications Services will provide quality portable handheld communication with numerous features including not only telephony but also a large variety of portable multimedia services. PCS will be offered by new operators in competition with the existing cellular providers, namely Cellular and Telephone.

3. An additional area of development, recommended for implementation by the Inter-ministerial Committee, concerns the international telecommunications services. The exclusive status of current operators - Barak, Golden Lines and Bezeq International - will expire in 2002, allowing for the granting of licenses to additional operators.

4. Opening the multi-channel subscriber television market to competition.

Within the framework of these recommendations, competition will be facility based, and there will be universal service obligations as well as cross ownership restrictions, thereby assuring fair competition.

In December 1996, the Ministry announced national policy goals in the area of telecommunications. These goals included providing modern telecommunications services, reasonable tariffs, and assuring universal service. By implementing these goals, the government aimed to create a competitive environment which promotes economic efficiency, ample investment and advanced services, while safeguarding national security interests.

In early 1997 Israel signed the WTO multilateral agreement on basic telecommunications services, and took on an international commitment that the local Israeli basic telecommunications services market will open to competition. Israel is standing by these commitments; The government plans to introduce competition in local services, including infrastructure, data transmission and basic telephony, in 1999.