The Palestinian Authority has outlawed the sale of Israeli mobile phone services, accusing Israeli cellphone companies of operating illegally in the Palestinian Territories and refusing to pay taxes.
Mashhour Abu Daka, the Palestinian Minister of Telecom and Information Technology, said Thursday that Israeli cell providers are violating Palestinian law and previous agreements between the two sides by selling their products in Palestinian towns and cities without a required license. He threatened to prosecute any Palestinian who violated the new embargo.
"These cell phone companies cover all the Palestinian territories by broadcasting their signal from settlements," the minister told The Media Line. "They don’t respect Palestinian law, they are not paying taxes, they are not licensed. It’s straightforward black marketing."
Israeli cell providers have been estimated to make up between 10 and 45 percent of the Palestinian mobile market, but Abu Daka said that the West Bank government had no way of collecting exact figures.
"We estimate that they make up 12% of the total market share," he said. "This costs the Palestinian tax payer around $10 million a year in lost tax revenues and an additional $100 million a year in unpaid licence fees."
The Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip, signed in 1995 and known as "Oslo 2", grants Israeli companies the temporary right to provide services to Jewish settlers in the West Bank until a final agreement regarding their status is signed.
This effectively gave Israeli mobile operators the right to expand their infrastructure into what is knows as "Area C", which includes the Israeli settlements and bypass roads and takes up around 60 percent of the West Bank. According to the World Bank, Israel’s four mobile providers have erected at least 637 cell towers and communication facilities throughout "Area C".
Israel does not permit Palestinian mobile providers to build cell towers in Area C.
Furthermore, the Israeli government allots the four Israeli cellphone carriers a frequency level between 35 MHz and 50 MHz, while the two Palestinian mobile operators are given between 3.8 MHz and 4.8 MHz, effectively meaning Israeli cell providers provide a signal that is 7 to 12 times stronger than Palestinian cell providers.
Cellcom, Israel’s largest cell carrier, has around 3.2 million subscribers and has been granted a total of 37 MHz. Jawwal, the largest Palestinian carrier, was given 4.8 MHz in 1996 when it was first launched with 120,000 subscribers. Over a decade later the company has 1.5 million subscribers but has not been granted any additional frequency spectrum.
The Palestinian Ministry of Telecom and Information Technology and a number of Palestinian trade and IT groups also claim Israel has blocked or actively delayed Palestinian imports of various technology needed to improve and expand the mobile network in the West Bank.
With a stronger signal than their Palestinian counterparts and the ability to build communications infrastructure on hilltops in 60 percent of the West Bank, Israeli mobile operators offer West Bank residents a stronger, more advanced and more extensive cellphone network, including both Palestinian towns and cities outside Israel’s control and the territories between them.
As a result, Israeli cellphone products such as SIM cards and cards to recharge prepaid credit on Israeli cellphones are widely available throughout the West Bank.
Minister Abu Daka argued that the refusal of Israeli companies to pay taxes to the Palestinian Authority fell against a backdrop of similar overall Israeli policies towards the development of Palestinian telecommunications.
"The Israeli military is regularly putting obstacles in front of the development of the Palestinian IT and telecommunications sector," he said. "They don’t allow Palestinian cell companies to install antenna towers in Area C, which makes up most of the West Bank. They don’t allow us to import the technology needed to employ new technologies like 3G, and they don’t give us additional frequency we need."
The Palestinian Authority and business groups accuse Israeli mobile providers of deliberately targeting Palestinian customers in the West Bank under the pretext of providing services to Israeli settlers in the West Bank. They site, for example, Arabic text message advertisements sent to Palestinian users in the West Bank and also instances in which extensive, highly-powered cell network infrastructure was installed in settlements with a few hundred settlers but located close to large Palestinian cities.
"What they are doing in the West Bank is illegal," Ahmed El-Farra, the CEO of PalInvest told The Media Line. "They are not licensed to work in the West Bank but they are selling new lines there and selling topup cards all over, competing with the Palestinian operators."
The leading Israeli cell operators declined requests to comment for this article.
David Wilder, a spokesman for the Jewish community in the largely Palestinian city of Hebron, argued the Palestinian Authority was trying to deny Jewish communities in the West Bank of fundamental rights.
"A number of years ago, when the State of Israel requested the Palestinian Authority to allow us to install pipes for water they refused, so we had to circumvent the Palestinian Authority," he told The Media Line. "I think there are very basic human needs, like water and food and today communications, for people to lead normal lives. The Palestinian Authority refuses to accept our existence here and in fact they try to kill us every once in a while, so I’m very happy and I think it’s essential that the Israeli government sees it necessary to circumvent the Palestinian Authority to create the necessary infrastructure for us to live and to ensure that the basic needs of its citizens are met."
Dr Yechiel Shavi, a spokesperson for Israel’s Ministry of Communications, argued that given the political situation, good cell coverage is imperative for the security of Israeli settlers living in the West Bank and perfectly in line with the protocols outlined by the Oslo accords signed by both Israel and the Palestinians.
"The activity of Israeli telecom companies in the West Bank is in accordance with the Israeli-Palestinian Interim Agreement dated September 28, 1995," he told The Media Line. "The companies operate under a license given to each of them by the Civil Administration. Their mission is to provide telecom services to the Israeli settlements and to IDF bases, including the roads leading to them, in C Areas, which are under full Israeli control under the Interim Agreement. The service they provide includes the establishment of facilities."
"It is important to note that the Civil Administration does not allow the establishment of Israeli facilities in A and B Areas, which are under civil control of the Palestinian Authority," Dr Shavi continued. "It is known to us that there are Palestinians who are voluntarily interested in buying Israeli companies’ handsets, for varying reasons of commerce etc.Similarly, there are Israelis living in East Jerusalem and in the Triangle area of Israel, voluntarily acquiring Palestinian networks’ handsets for similar reasons. We do not find a necessity to intervene in this situation."
Another Ministry of Communications official, speaking on the condition of anonymity, argued it was not appropriate for the Israeli government to get involved in the dispute and that any profit made from Palestinian customers is an unintended byproduct of such services.
"These are private companies and we do not have control over them," the official told The Media Line. "We have enough problems of our own and no one is forcing the Palestinians to use these services so we see no reason to interfere."
But Mashhour Abu Daka, the Palestinian Minister of Telecom and Information Technology, denies the Israeli government’s claim that the cell operators have no legal obligations to the Palestinian Authority.
"Nobody gives a licence for free," he said. "According to the relevant section of the Oslo agreement, which I have in front of me, the economic protocol says very clearly that any Israeli operator that wants to operate in the Palestinian territory has to buy a license."
Article 36 of the Oslo Interim agreement, signed in September, 1995, provides for Israel to supply "telecommunications services in Area C to the Settlements and military locations." However, the article also states that "The Palestinian side has the right to collect taxes on all telecommunications services billed in the West Bank and the Gaza Strip", that "The Palestinian side has the right to collect revenue for all internal and international telecommunication services originating and terminating in the West Bank and the Gaza Strip" and finally that "Operators and providers of services, presently and in the future, in the West Bank and the Gaza Strip shall be required to obtain the necessary approvals from the Palestinian side."
Meirav Amir, the research coordinator for Who Profits from the Occupation?, an Israeli group that researches the economic activities of Israeli and international companies in the Palestinian territories, argued that Israeli cell operators are knowingly and illegally exploiting privileges granted them by the Oslo Accords.
"It’s a violation of the Paris agreements," she told The Media Line, in reference to the the second stage of the Oslo Accords. "Israeli companies are not allowed to operate in the Palestinian market unless they have a specific agreement with the Palestinian Authority."
"These companies didn’t create the situation on the ground, but it’s obvious that they are making a profit from the systemic advantages it provides them," she told The Media Line. "None of the cellular communications companies will admit that they seek Palestinian business, but we know that Israeli cell companies advertise in Palestinian areas and they are infiltrating a different market without paying the due taxes."
Ala Alaeddin, Chairman of the Palestinian IT association, an umbrella organization for about 75 Palestinian hi-tech companies, argued that Israeli government was acting in bad faith.
"On the one hand they are not freeing the frequencies that they promised to give to the Palestinians and limiting the services the Palestinian companies can provide," he told The Media Line. "And on the other hand, they are giving the green light to Israeli companies to operate in the Palestinian territories."
Dr Roby Nathanson, Director General of the Israel-based Macro Center for Political Economics, said heavy Israeli investment in those portions of the West Bank delineated as "Area C" is nothing new.
"Our studies have shown that the infrastructure in Area C – electricity, roads, water – is all quite developed because of the settlements, while Areas A and B are underdeveloped," he told The Media Line. "This is part of that pattern."