Israel's mobile market: catching up with price wars

Israelis are some of the chattiest mobile users. They are also a bit gadget crazy. But until a year ago, mobile service prices were about 2 to 3 times what they were in Europe. Nobody could explain this. There are three large mobile service providers: Pelephone, Cellcom, and Partner (Orange). So it wasn't the problem of competition. While prices for service and phones was high, Israelis still kept on blabbing and paying (average of 250 shekels a month, about $70). A year ago (May 2012) Golan Telecom started business by offering “all you can use” monthly packages for 99 shekels. This offer shook the mobile operator market and soon the main operators started offering even lower price monthly packages (down to 70 shekel, about $19). A year later, about half of the Israeli mobile phone users have switched to the low cost packages. This is to some concern to both operators and government regulators. Mostly because it means that half of the users have older packages and are probably paying much more (the old rates, before Golan came out.)  

On the phone handset front, Israelis are going smart phone crazy. From the earliest days of Apple's iPhone, Israelis were big users. Once the various Android phones came out, the lower prices attracted buyers, especially parents buying phones for kids. Today, Android phones outsell iPhones about two to one. There are many models that seem to attract budget conscious buyers like phones from Sony, LG and Nokia. But by far, the largest phone seen on Tel Aviv streets are Samsung Galaxy. The Galaxy line comes from low cost small models (mini VE, about 1,000 shekels, about $280) to the latest S4 at 4,400 shekels (Orange site, about $1,220). In general, you can get a phone at a better price from an independent seller (not the mobile operators with monthly payment plans).

With the popular use of tablet computers, mobile operators have been selling more data plans. Also, as Golan Telecom became successful against the three traditional mobile operators, many organizations like supermarkets and electric appliance chains started offering their own branded mobile plans. The market in Israel is small compared to European countries, yet there is activity to offer new products and services all the time. If you are coming from Europe or the United States, do some comparison shopping before jumping at the first plan someone recommends. Today, regulation forbids mobile operators to lock users into long multi-year plans. So you buy service essentially at a monthly rate and can switch plans any time. If you have a good smart phone, bring it along, you may be able to use it with a simple SIM replacement (you can usually add Hebrew support by adding a language and downloading options off the web).