Chairman of the Board, Bezeq - The Israel Telecommunication Corp
Gil Sharon, CEO PELEPHONE- tips for entrepreneurs
About Gil Sharon
In a 2012 appearance, Gil Sharon, then CEO of Pelephone, addressed entrepreneurs about challenges facing cellular operators. He stated that mobile data consumption had grown exponentially while network capacity remained limited by government-allocated spectrum and physical constraints. Sharon noted that building additional cell sites had become difficult due to permitting and environmental issues, and he identified network congestion and improving customer experience on data networks as key challenges. Sharon said that operators would pay significant sums to address capacity issues. He described Pelephone as open to working with Israeli startups, citing examples such as Intucell and Pcube, and stated that the company gave priority to local startups over mature companies, describing the arrangement as a win-win situation.
Transcript (11 segments)
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Moderator0:01
Mobile data consumption became huge, but the cellular pipe was not changed. That was a point for Eden Gaton, the CEO of Pelephone Communication, our first cellular operator, which if we take into account the hosting of MVNO and Hot Mobile, is probably the number one Israeli cellular network in terms of traffic. And you probably have much, much to say about it, and you can probably tell us what he can take from his previous speakers. So please welcome Gil Sharon.
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Gil Sharon0:44
Hi, good afternoon. I understand that I'm standing between you and a cup of coffee, so I'll be as brief as possible. Most of you, probably all of you, are in the telecom business or very close to the telecom business. So I'm representing your existing or future customers, the networks. What I'll try to say very briefly in the next few minutes is to tell you what our challenges are, and if you guys could help us, the carriers, deal with our challenges, then this is where the opportunity lies for you and for us, the carriers.
Today, I think the biggest challenge for operators is the data congestion on our networks. The issue is that the exponential growth for data usage means that all the capacity the networks have today is never enough. We all understand that the smartphone phenomenon that we have seen and talked about today is creating a demand for data which is tripling every year, and the networks cannot handle this amount of data traffic while delivering a good experience and speed to the customer.
So what we're dealing with is a simple case of much higher demand than capacity. We have to understand that capacity on networks is limited by its nature. I'm talking about the mobile networks. We have a limited amount of spectrum which is allocated to us by the government, and this is all we have. Now, if you have, let's say, an allocation of 2 x 10 MHz, that's what you have, and the physics limits you to using that capacity.
In the past, what we all used to do while we reached the limits of our capacity was to build more sites and have the sites closer to one another. By adding more sites, we added more capacity. Not only in Israel but all over the world, this is something that is becoming almost impossible to deploy more and more sites because of the nature of building permits and the issues of environment and public negative opinion about sites.
So we have to understand that we have limited capacity while, on the other hand, expanding demand. The first issue that I'm raising to you and to everybody else which has a brilliant idea is: help us. Help us open bottlenecks, help us use our networks better. The second challenge is how to improve customer experience on the network, and there are many startup companies that focus on this issue of delivering better customer experience, especially again on the data networks.
And the third issue that is growing and becoming the most, I would say, challenging one is how to deal with online video, online TV. The video capacity or the video usage on the network is expected to grow and grow every year. People say and expect that 60% of the capacity of the networks will go to online real-time video usage, and of course, this is a big challenge for our networks.
So to sum up what I'm saying is that first of all, there's a huge technological challenge here. I think that all operators, and we're talking business here, all operators will pay a lot of money to solve or relieve these issues of capacity. And we at Pelephone open our door and our lab to any startups that have new, breaking, and brilliant ideas.
We have great experience with working with Israeli startups. Just to mention a few names: Intucell, one of the recent very nice exits, I think we were their first beta site and first real commercial customer. Pube, again sold later on to Cisco. Flash Networks, AOT, MobiCell, etc., etc. We're very, very open to try out new ideas from Israeli startups.
Donon, sitting here, our CTO, is most welcoming, and we even give many times priority to Israeli startups over mature companies with mature products. I think there's a win-win situation here where we get to explore new grounds and new ideas, we can become more innovative as an operator, and on the other hand, even save money. And the startups enjoy working with and trying out their ideas or products on a very strong network and one of the most advanced networks in the world.
So I call upon you to work with us. There are big challenges and there are big business opportunities here. Thank you very much.