Israel finally agrees to upgrade Palestinians to 3G, boosting tech startups

Shira Rubin | Special for USA TODAY

RAMALLAH, West Bank — Palestinian entrepreneurs have long suffered antiquated Internet connections that have hampered their hopes of joining the digital age. Now that Israel is finally giving them an upgrade to a 3G network, they see the potential for an economic boom in the occupied territory here.

“It’s about time,” said Christina Ganim, a founder of the lingerie shopping site Kenzwoman.com who finally feels up to date with the rest of the world by being able to interact with customers in real time on social media.

“Our company is for women by women in the Middle East, where essentially everyone has a smartphone,” said Ganim, who hopes that her site, available in English and in Arabic, will revolutionize the way women shop for lingerie by providing modern high-end items to meet a niche market among the region’s growing middle class.

Israel, which had cited security concerns as one reason for limiting Palestinians to a very slow 2G network, agreed last month to allow 3G service, which provide connections to mobile devices and video streaming. Even then, Palestinians will lag much of the world, which is transitioning to faster 4G networks.

The decision to upgrade to 3G came shortly after Israeli Prime Minister Benjamin Netanyahu met with Secretary of State John Kerry and vowed to take steps to calm violence since mid-September that has claimed the lives of 19 Israelis and at least 106 Palestinians, including 71 identified by Israel as assailants, according to the Associated Press.

Under interim peace agreements, Israel maintains control over frequency spectrums. It has prolonged the ban on 3G here citing not only security concerns but the lack of frequencies after providing 3G access for Israeli citizens, who have been on the upgraded network since 2006.

Although Israel has promised for years to upgrade the service, Palestinians still must make do with the 25-year-old sluggish and currently high-priced 2G network that is easier for Israel to monitor. That makes Palestinians among the last 16 markets in the world without 3G access, in the same company with Cuba and Eritrea, according to the International Communication Union, a United Nations agency.

Lingerie entrepreneur Ganim says 3G is “something that every single human on this planet should have access to ... for us to really be able to work remotely from anywhere, and hopefully make us active players.”

The slow upgrade to 3G here is an example of how Israeli policy hinders Palestinian efforts to achieve economic independence. When President Obama visited the West Bank in 2013, light poles along the main roads were plastered with signs telling him to leave his smartphone at home because of the lack of 3G.

“There are estimates that the introduction of 3G will bring from $50 million to $100 million into the Palestinian economy,” said Amar Akker, CEO of PalTel, the largest Palestinian telecommunications firm. “We would love to have 4G, but we decided that if we wait for 4G, it would be another two years at least, so we chose not to waste any more time,” he said, referring to Israel’s plans to soon release 4G to its citizens.

Akker says 3G service should be implemented fully by May 2016. He expects that it will boost a burgeoning tech sector in Ramallah, the Palestinian Authority's de-facto capital and home of government institutions.

The Palestinian tech sector accounts for at least 5.6% of the $13 billion Palestinian GDP, according to the Palestinian Central Bureau of Statistics. The estimated 30 start-ups operating here have gained acceptance among Palestinians only in the past few years.

“Where Israeli mothers hope their sons will serve in the elite tech unit in the army and go on to launch a successful start up, Arab mothers talk about their children being an accountant from a very young age, so I think this culture of risk aversion is in the Arab DNA somehow,” said Fares Zaher, CEO of Yamsafer, the Ramallah-based version of Booking.com.

Hussein Nasser el-Din, 29, founder of Red Crew Intelligence, an app that provides security intelligence to West Bank visitors, says improved economic prospects have the potential to create environments conducive to peace, “to create something from nothing.”

Nasser el-Din expects 3G will at least double his business and allow him to crowdsource information and at least triple the worth of the app. “After hard times this generation is becoming much more realistic than the other ones, less emotional, more based on realistic approaches towards life,” he said over Skype from Silicon Valley, where he was participating in a conference for international start-ups.

“So you’re seeing people looking to create opportunities, and, while now we have no options, with time, we’ll be sitting (with the Israelis), flexible toward new solutions.”