The Israeli Export International Cooperation Institute Israel

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

Israel • Population: 7. 2 M • Households: 1. 97 M • Urban Population: 91. 5% • Area - grand total 22, 145 sq. km • Fixed line Telephone Subs – 3. 2 M • Mobile – 7. 18 M (104% penetration) • Internet Users: 2. 5 M (ADSL: 1. 5 M)

Israel Economic Indicators Criteria 2005 2006 2007* 2008* GDP (B$) 129. 8 140 156 170. 3 Israeli Export GDP Real Growth rate (%) 5. 6% 5. 1% 4. 8% 4. 2% & International Cooperation Institute GDP per Capita (PPP, $) 26, 030 27, 640 29, 130 30, 570 Exports of Goods & Services (B$) 57. 9 63 67. 4 73. 3 Imports of Goods & Services (B$) 57. 5 61. 6 67 71 Unemployment Rate (%) 9% 8. 3% 7. 6% 7. 2% Inflation Rate 2. 4% -0. 1% 1. 9% 1. 8 4. 9% 4% 3. 9% The Current Account balance (% of GDP) 3. 3% * Source: Economist Intelligence Unit

Export-Driven economy 45% Israeli Export & International Cooperation Institute 06 05 04 03 02 01 00 20 The 95 31% Israel Export as % of GDP 38% 35% Industrial Export (Billions $) 2006. $29 B. 15% Growth! 2005. $26 B. 8% Growth! 2004. $24 B. 22% Growth! 2006 Export - Main Players Hi-Tech. 20% growth Mid-Tech. 11% growth Low-Tech. 7% growth

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

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

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

they bite the bits • Security, IP and Internet technologies, Electronics, Start Ups Bio and Medical devices, Telecom, Satellites and many more • Israel ranked 3 rd in the world in entrepreneurship start ups and 2 nd in quality of university education The Israeli Export • In 2006, Israel ranked 2 nd in capital raised by hi-tech companies & International • Israel has the highest Venture $/GDP rate in the world, Cooperation Institute ( seven times the US rate) • Five Israeli companies won Frost and Sullivan 2006 emerging technologies awards (12/2006) 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?

Be connected Telecom The Israeli Export & International Cooperation Institute i Did you know? 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･ 3 G Applications･Video Compression, Video Conferencing and Video Networks Start-Ups • Over 300 in 2007 and growing >> >> 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. 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

Telecommunications Equipment Telecom n n The n Israeli Export n & International Cooperation Institute n n n n n 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 3 G Applications Home Networks Storage Area Networks Wireless Local Loop, Microwave VPN, Firewalls Video-Compression, Video-Conferencing & Video Networks

Israel’s Telecommunications Industry Excellence Areas The Israeli Export & International Cooperation Institute • 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. "

CRAIG BART: former Intel CEO ( visiting Israel ) The Israeli Export & International Cooperation Institute “… Globally speaking, Israel is in 3 rd 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. ”

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

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

Foreign Companies Invested in Israel (Some Examples) §US § Microsoft § AOL Time Warner § Intel § The IBM Israeli Export § Boeing Enterprises & International § Cisco Systems Cooperation § GE Institute § Lucent § 3 Com § Hewlett Packard § Merrill Lynch § Motorola § Sun Microsystems § Applied Materials § KLA § Kulicke & Soffa §Europe § British Telecom § Sap § Philips § Alcatel § Siemens § Daimler. Chrysler § Volvo § Cable & Wireless § Deutsche Telekom § Telecom Italia § Generali § L’Oreal § Unilever § Villmorim § Veolia §Asia § Samsung Electronics § Daewoo § Nomura § Hutchison Telecomm. § LG Group § Sony § Toyo Ink § Hyundai § Acer Computers § Sumitomo Trading § Fuji § Honda fe Buf e enc rcury r §Lo. P - Me §H Isca t– r

The Israeli Export & International Cooperation Institute