The Israeli Export & International Cooperation Institute The Israeli Export & International Cooperation Institute Israel Telecommunications Industry January 2008

Israel Population: 7.2M Households: 1.97M Urban Population: 91.5% Area - grand total 22,145 sq. km Fixed line Telephone Subs – 3.2M Mobile – 7.18M (104% penetration) Internet Users: 2.5M (ADSL: 1.5M)

The Israeli Export & International Cooperation Institute Israel Economic Indicators 2008*2007* Criteria GDP (B$) 4.2%4.8%5.1%5.6%GDP Real Growth rate (%) 30,57029,13027,64026,030GDP per Capita (PPP, $) Exports of Goods & Services (B$) Imports of Goods & Services (B$) 7.2%7.6%8.3%9%Unemployment Rate (%) %-0.1%2.4%Inflation Rate 3.9%4%4.9%3.3%Current Account balance (% of GDP) * Source : Economist Intelligence Unit

The Israeli Export & International Cooperation Institute Industrial Export (Billions $) 2006 Export - Main Players Hi-Tech. 20% growth Mid-Tech. 11% growth Low-Tech. 7% growth $26B. 8% Growth! $24B. 22% Growth! Export-Driven economy Israel Export as % of GDP $29B. 15% Growth! 31% 35% 38% 45%

The Israeli Export & International Cooperation Institute Export Overview 2006 North America 33% Africa 3% South America 4% Asia & Far East 15% East Europe 7% West Europe (EU) 33%

The Israeli Export & International Cooperation Institute Industrial Export Development (Excluding diamonds, B $)

The Israeli Export & International Cooperation Institute Goods & Services Export Development (including diamonds, B $)

The Israeli Export & International Cooperation Institute In every computer Hi-Tec Intel, Motorola, SAP, HP, Microsoft, Dell, Cisco, GE, Applied Materials, Oracle and many more established major development centers in Israel –Every 2nd computer worldwide uses MMX, Dothan or other Israeli developed Intel’s processors. –More than 400 Million registered uses AOL ICQ software, developed and patented by Israeli Mirabilis More companies that originated in Israel are listed on NASDAQ than from any other country in the world i Did you know? Intel’s Centrino chip A new-generation laptop chip. Was developed in Intels’ branch in Southern Israel Israel is ranked no.1 in R&D investments worldwide >>

The Israeli Export & International Cooperation Institute they bite the bits Security, IP and Internet technologies, Electronics, Bio and Medical devices, Telecom, Satellites and many more Israel ranked 3rd in the world in entrepreneurship start ups and 2nd in quality of university education In 2006, Israel ranked 2nd in capital raised by hi-tech companies Israel has the highest Venture $/GDP rate in the world, ( seven times the US rate) Five Israeli companies won Frost and Sullivan 2006 emerging technologies awards (12/2006) Start Ups i Did you know? Disk On Key Since 1989, the pioneer and patented of the personal storage solutions revolution, using USB devices with a proprietary flash memory developments >> i Did you know?

The Israeli Export & International Cooperation Institute Be connected 300 companies exporting Fiber-optic ･ Intelligent Cabling Solutions ･ Access (XDSL, IAD) ･ Home Networks ･ Storage Area Networks ･ IP networks (voice, video, data, multimedia) ･ Wireless Local Loop ･ Routers, Load Balancing ･ VPNs, Firewalls ･ 3G Applications ･ Video Compression, Video Conferencing and Video Networks Start-Ups Over 300 in 2007 and growing Telecom >> Alvarion Ltd ™. With over 2 million units deployed in 150 countries, Alvarion Is the worldwide leader in wireless broadband providing systems to carriers, ISPs and private network operators. i Did you know? >> Comverse One of the leading providers of mobile and wireless telephony worldwide. From billing systems to advanced rich-media platforms, Comverse supplies the largest corporations in the world: AT&T, Verizon, Vodafone, Deutche Telecom and many more

The Israeli Export & International Cooperation Institute Telecommunications Equipment Telecom Fiberoptic & Photonic Systems SDH, SONET Access – XDSL, IAD ATM, Frame Relay IP Networks – Voice, Video, Data, Multimedia Routers, Load balancing Test Equipment, Quality Monitoring of Networks 3G Applications Home Networks Storage Area Networks Wireless Local Loop, Microwave VPN, Firewalls Video-Compression, Video-Conferencing & Video Networks

The Israeli Export & International Cooperation Institute Israel’s Telecommunications Industry - Excellence Areas Triple-Play technologies Digital communications (access, mobile, wireless, cable TV) Access networks Broadband & optical technology Satellite communications IT / Network security & VPNs Value Added Services (mobile, IPTV) Home networking Billing Network management Communications chip design

The Israeli Export & International Cooperation Institute Access

The Israeli Export & International Cooperation Institute Metro & Backbone

The Israeli Export & International Cooperation Institute Cellular Core Network

The Israeli Export & International Cooperation Institute Value Added Services

The Israeli Export & International Cooperation Institute Operating Support Systems

The Israeli Export & International Cooperation Institute Asked how come he chose Israel as his first investment outside America, Buffett's response was: "Some Americans came looking for oil, so they didn't stop in Israel. We came looking for brains, so we did stop in Israel."

The Israeli Export & International Cooperation Institute CRAIG BART: former Intel CEO ( visiting Israel ) “… Globally speaking, Israel is in 3rd place in terms of IP and is a very good place for opening businesses. The level of education in Israel has helped us expand. Israel’s ability to supply very good scientists has helped us, and the government’s positive attitude has helped us attract investments.”

The Israeli Export & International Cooperation Institute Bill Gates, the Microsoft CEO made his first trek to Israel “Considering the density of Israeli start-ups and local successes, Israel is like a bit of Silicon Valley.” “It’s no exaggeration to say that the kind of innovation going on in Israel is critical to the future of the technology business…”

The Israeli Export & International Cooperation Institute Why Are Israel’s Solutions Appealing? Very advanced, high quality solutions - at the forefront of technology Strong establishment and presence in main markets Long term and reliable business relations Flexibility and creativity in adopting solution to customers’ requirements Competitive pricing Numerous technological breakthroughs and industry leadership

The Israeli Export & International Cooperation Institute Foreign Companies Invested in Israel (Some Examples)  US  Microsoft  AOL Time Warner  Intel  IBM  Boeing Enterprises  Cisco Systems  GE  Lucent  3Com  Hewlett Packard  Merrill Lynch  Motorola  Sun Microsystems  Applied Materials  KLA  Kulicke & Soffa  Europe  Asia  Samsung Electronics  Daewoo  Nomura  Hutchison Telecomm.  LG Group  Sony  Toyo Ink  Hyundai  Acer Computers  Sumitomo Trading  Fuji  Honda  British Telecom  Sap  Philips  Alcatel  Siemens  DaimlerChrysler  Volvo  Cable & Wireless  Deutsche Telekom  Telecom Italia  Generali  L’Oreal  Unilever  Villmorim  Veolia  Lorence Buffet – Iscar  HP - Mercury

The Israeli Export & International Cooperation Institute