Israeli restrictions inhibit Palestinian telecoms sector

OCCUPIED JERUSALEM — The Palestinian mobile phone industry lost more than $1 billion (885 million euros) in revenues in the past three years, the World Bank estimated on Thursday, citing Israeli restrictions as a leading cause.

Israel limits imports of equipment by Palestinian telecoms companies, while they are unable to operate in the parts of the occupied West Bank under direct Israeli control, a World Bank report said.

As such, more than 20 per cent of customers in the West Bank use Israeli providers instead.

"The sector was hindered by years of delay in mobile broadband, presence of unauthorised Israeli operators in the Palestinian market, restrictions on importing equipment, and absence of an independent regulator," indicated the report, titled "Missed Opportunity for Economic Development". 

Israel and the Palestinian leadership signed a deal late last year to allow 3G Internet.

"However, the Palestinian operators remain at a competitive disadvantage because Israeli operators have 3G and 4G capabilities and are able to attract higher value customers," the bank added. 

It called for Israel to ease restrictions to allow the telecom sector to grow.

"The Palestinian telecom sector has the potential to boost the economy and create job opportunities," Steen Lau Jorgensen, World Bank country director for West Bank and Gaza, wrote in the report.

"In order for that to happen, Palestinian operators should be able to access similar resources as their neighbours," he emphasised.

Separately, Israel's state-run electricity company on Thursday reduced the power supply to Jericho over a debt of $450 million, causing blackouts in the Palestinian city in the occupied West Bank, officials said.

Jericho Governor Majed Al Fityani said up to 30,000 people were without power out of a total population of around 50,000 in the city and surrounding area.

Fityani said his office was operating with a generator and that the cut came without prior notice.

Power to the city was reduced to a third of its capacity, according to Hisham Omari, director of the private Palestinian Jerusalem District Electricity Company (JDECO).

An Israeli energy industry official said the measure came after the Palestinian Authority (PA) and Omari's JDECO failed to pay long-standing dues, currently amounting to more than 1.7 billion shekels ($450 million/397 million euros).

"We've informed all the relevant parties, and after endless attempts to reach arrangements, we've decided to act to reduce the debt," said the official, speaking on condition of anonymity and adding that the Jericho move was "open-ended".

Omari called it "collective punishment against the Palestinian people" which would disrupt daily lives and stop factories from operating in the area.

He said that ongoing talks with the Israel Electric Corporation (IEC) and PA have so far not resolved the debt problem.

Omari said he sent a letter to the Palestinian prime minister's office to "immediately intervene to stop this measure".

The PA has struggled financially and is largely dependent on foreign aid. It also relies heavily on IEC for electricity supplies.

The Palestinian economy has faltered in part due to Israeli restrictions in much of the West Bank.

In January 2015, the IEC cut power to Palestinian cities for a number of hours every day over a similar debt.

It ceased doing so the following month however, despite the standing debt.

The Israeli finance ministry and prime minister's office, which would normally be involved in any decision to reduce the electricity to the Palestinians, did not immediately respond to requests for comment.