Looking for Pre-paid in Israel

A few weeks ago, I was unexpectedly washed away by a wave of nostalgia – I recalled a first mobile phone in my family – the Big Black Monster from Motorola – back in the mid 90’s. I tried to remember some details and was very surprised to realize that this was a pre-paid plan device!

For those who don’t know, today there’s is almost no such thing in Israel as pre-paid mobile plan. One can hardly see any ads or promotions of such plans and they are never being offered by sales-persons of the MNO’s.

So I decided to make a little investigation and check what happens in the filed. I called three major operators and those were the results:

Partner / Orange

Orange BigTalk

At first the salesperson declared that he can’t provide me any information about pre-paid plans as “he isn’t dealing with the issue”. After I had insisted. he unwillingly read to me some conditions of an unnamed plan and couldn’t provide any additional details. So, I left him alone.

Cellcom

A funny story happened to me when I called Cellcom. The salesperson told me that she would transfer my call to ” a special center which is dealing with the pre-paid”. OK said I. The “Special center” answered me

Cellcom Talkman

very nicely but in Arabic. Finally I’ve got some answers in Hebrew but the girl said she can’t provide me any specific details unless I’m an existing pre-paid subscriber. I exclaimed that I’ve a great desire to become one, but she couldn’t help and transferred me back to the sales. There I finally got some info about the pre-paid option.

Pelephone

Pelephone seems to have the most developed pre-paid option. The salesperson wasn’t even surprised that I was asking about pre-paid, though he tried to convince me to change my mind and sign a contract.

Pelephone IZI

He provided me a detailed information (which wasn’t matching the info on the website – but he assured me that I can trust him. Pelephone offers 5 different handsets (compared to 1 only in Cellcom) and it’s also the only carrier to offer 3G service on with pre-paid plan.

Comparative table of the operators:

	Orange / Partner Bigtalk	Cellcom Talkman	Pelephone IZI
Handset	Nokia 2600	Motorola Z3	Motorola L7 Samsung R500 Samsung R510
Airtime	ILS 0.71 within the network ILS 0.91 to other networks	ILS 0.47 to all networks	ILS 0.69 to all networks
SMS	N/A	ILS 0.40 (package of 80 for ILS 20)	ILS 0.48
3G	NO	NO	YES

* Interesting how it’s possible – such a high termination rate is prohibited by the regulator

The next step was to what is the market segmentation according to the official figures. It turned out that our operators don’t publish this kind of statistics. the only official figures available are that of Partner. It says that it has about 28% prepaid customers.

At fist sight 28% seems to be too much as in the Jewish sector practically nobody uses pre-paid nowadays. However, considering the fact that I was answered in Arabic in Cellcom’s pre-paid call center and remembering ads of pre-paid plans aimed at foreign workers I came to a different conclusion.

The pre-paid segment in Israel is significantly smaller than in other developing / developed countries (more than 40% in OECD) and it’s highly concentrated amongst Arab population and foreign workers. The first probably use it as a cheaper option to call. While the foreign workers which are in many cases illegal, use it in order not to reveal their identity to the authorities.

After all, there is still a question why the pre-paid doesn’t used by the entire population and most and foremost by its natural consumers – youth and low socio-economic groups.

In my opinion, the answer is dual. First, the mobile operators in Israel succeeded in educating the audience to sign long contracts heavily subsidizing the devices (until recently 36-months long contracts were the only available). So, people just don’t familiar enough with the pre-paid option.

Secondly, the average mobile customer in Israel talks a lot (about 350 MOU) – much more then his/her global counterpart. Moreover, he is ready to pay for this. I’m sure that many customers simply don’t look for the most beneficial options.

Summarizing this long but (hopefully) interesting post, I wan;t only to say that despite the fact I use a contract phone I would prefer to see a more diversified market which offers pre-paid options too.