Chinese bids for the deployment of fifth-generation (5G) wireless networks in Israel ended up being rejected.
According to reports, this is because the US has urged Israel to limit Chinese involvement in its strategic projects. Another reason is that Israeli security officials are concerned that China could abuse its involvement in the project to spy on Israel.
The report came on the same day that Israel named a local company as the winning bidder for a $1.5 billion desalination plant contract, beating out Chinese competition amid reports of pressure from Washington.
Last July, Israel launched a tender for the construction of 5G networks, open to local and overseas players. At the same time, Israel’s Communications Ministry said that it aimed to select the winning bids by December.
Prime Minister Benjamin Netanyahu has recently been warned by security officials not to select Chinese firms for the project. The officials have reportedly told Netanyahu in a closed-door discussion that even if the lowest-priced offers come from China, it “should not be allowed to win the contract and set up these vital, sensitive networks.”
Two weeks ago, US Secretary of State Mike Pompeo made a lightning visit to Israel during which he discussed Chinese investments.
Pompeo in a May 13 interview with public television voiced concern over Beijing gaining “access to Israeli infrastructure” that could “put Israeli citizens at risk,” as well as endangering the “capacity for America to work alongside Israel on important projects.”
Due to national security concerns, regulators in the US last year were reported to be leading an effort to remove components developed by China’s Huawei and other firms from the telecommunications networks of US firms.
In the tender, Israel, which suffers slow internet speed, is auctioning frequencies ranging from 700-2100 MHz, which are also used for 4G services, to 2600-3800 MHz, which is only for 5G services.
Companies that win the bid will be able to delay payment for the frequencies until 2022, so they can more easily invest the significant amounts of money needed to deploy the networks.
A nationwide 5G network, which would be an added layer on existing 4G networks, has been estimated to cost around NIS 2 billion ($562 million).
In addition, existing players will be able to join forces with other firms and submit joint bids to share costs.
They will also be able to get a rebate on annual frequency charges for four years upon meeting certain milestones and can win grants from the ministry of up to NIS 200 million, depending on the speed in which the networks are deployed. The total amount of incentives is some NIS 500 million, the ministry said.
“The digital future of Israel is dependent” on upgrading to 5G as soon as possible, said Netanel Cohen, the director-general of the Communications Ministry, at a briefing last July.
Countries around the world have been moving to introduce 5G, the next generation of wireless networks, which bring the promise of greatly increased internet speeds and better coverage and responsiveness.
Edited from an article written by Toi Staff and Shoshanna Solomon