New wholesale pricing model aims to break Bezeq’s grip, lower consumer bills, and speed up service
In a landmark move that could significantly change how Israelis access the internet, the Communications Ministry has announced a sweeping price reduction of up to 40% for wholesale services on modern fiber networks. It’s the first time the government is setting rates using a cost-based model—shaking up a market long dominated by a few big players.
The immediate impact? Households across Israel could soon see dramatically lower internet bills and better service, particularly in areas currently underserved by high-speed fiber infrastructure.
Finally, a Price Cut That Hits Home
The numbers tell the story.
Under the new structure, the regulated rate that telecom providers pay to Bezeq for access to its fiber infrastructure will drop from 72 NIS to 49 NIS per household for 1 gigabit speeds. That’s a cut of over 30%, and it could go even deeper depending on final rollout costs.
And it’s not just a discount—it’s a fundamental change in how pricing is calculated.
For years, rates were set without clearly reflecting real costs, leading to inflated pricing and weak incentives for competition. Now, for the first time, the ministry is applying a cost model. Think of it as paying what it actually costs to use the network, rather than what a monopolistic provider decides it’s worth.
Bezeq’s Monopoly Might Be in Trouble
Bezeq has long been the behemoth of Israeli telecommunications.
As the primary infrastructure provider, it charges other companies (like Cellcom, Partner, and Hot) fees to use its network. That practice—called Bitstream Access (BSA)—was supposed to encourage competition by allowing smaller players to offer services over Bezeq’s pipes.
But in practice? Those wholesale prices were so high that competing providers struggled to undercut Bezeq’s retail rates.
Now, with wholesale costs slashed, other ISPs finally have room to breathe—and to compete. If done right, it could usher in a new era of better internet at lower prices.
Here’s how the old vs. new model compares:
| Wholesale Service | Old Price (NIS) | New Price (NIS) | % Drop |
|---|---|---|---|
| BSA (1 Gbps) | 72 | 49 | 32% |
| Other services | Varies | 30–40% lower | Up to 40% |
Consumers Could Finally Get What They’ve Been Promised
Israel has been rolling out fiber-optic internet for years. But while the technology exists, high prices and low competition have kept speeds stagnant and service spotty.
With this change, industry officials say more providers will enter the game, leading to:
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Lower retail internet prices
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Faster speeds even in peripheral regions
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Incentives for providers to improve customer service
One telecom analyst called it “the most consumer-friendly move the ministry has made in over a decade.”
Still, some skeptics warn that companies may find new ways to bundle fees or tweak contracts to recoup losses. Regulators will need to stay on top of enforcement if they want the benefits to reach ordinary households.
Political Timing Matters Too
Communications Minister Shlomo Karhi has framed the move as part of his broader campaign to modernize Israel’s digital infrastructure.
Critics say it’s also a much-needed win for a government under pressure to show tangible economic relief amid rising living costs and inflation. Either way, the timing works. Consumers are more budget-conscious than ever, and access to affordable high-speed internet is no longer a luxury—it’s a necessity.
This might explain why Karhi is moving aggressively now. His office said the changes are part of a long-overdue correction in the market, “designed to reflect real infrastructure costs and improve access for every citizen.”
What Happens Next?
That’s the big question.
The new prices are only one part of the puzzle. Telecom companies will need to adjust their packages, marketing strategies, and backend billing systems to reflect the new economics. Some may delay passing on savings. Others may move fast to grab market share.
And Bezeq? It’s not thrilled.
Insiders say the company is evaluating whether to challenge the new pricing model, arguing it could undercut future investments in fiber infrastructure. But with public sentiment firmly on the side of lower bills, pushing back too hard could be a branding disaster.
