History and Vision
Internet Gold was established in 1992 as Euronet Golden-Lines Ltd., Eurocom Communications’ vehicle for capitalizing on opportunities and markets emerging as a result of the Israeli government’s privatization of the Israeli communications industry. In founding Internet Gold, we set out to become Israeli communications leading player.
In those pre-Internet days, international long-distance calls were expensive, cell phones were rare and fax usage was just gaining momentum,
Beginning in the early 1990’s, the Israeli government began promoting competition throughout the telecommunications industry. At the same time, technological advances connected transformed the cost structure of many telecommunications services. Recognizing the potential for significant value creation, Internet Gold entered Israel’s telecommunications market, first as a niche player focused on specific telecom services as they became open to competition. Three years later, when the Internet emerged as a new channel for service delivery, Internet Gold gradually abandoned less attractive telecom segments and focused on those based on the Internet.
1995-1999: ISP to a Nasdaq Listing
In 1995, we launched our ISP business. Our revenues were driven by the Israeli public’s phenomenal appetite for Internet usage, which grew rapidly to include 74% of the population. The growth of this business drove a steady increase in our revenues, enabling us to carry out a successful IPO on Nasdaq in 1999.
2000-2004: ISP to Broad Spectrum Internet Player
As usage of the Internet grew, we recognized the opportunity to begin capitalizing on the assets that we had built, including our large customer base, technological know-how and extensive marketing infrastructure (CRM/billing systems, call centers, etc.). To increase the average revenue per user (ARPU) of our ISP user base, we introduced a broad range of high-margin value added services (VAS). In parallel, to prepare for the emergence of the Internet as an advertising media, we began building an extensive portfolio of Internet content properties, niche portals and websites, led by the MSN-Israel joint venture that we established together with Microsoft Corp. In addition, we established P-1000, an e-Commerce site which grew quickly to become one of Israel’s most popular online shopping outlets.
2004-2006: ILD Services and Transition to Broadband
As VoIP technologies matured, we leveraged our Internet backbone to introduce low-cost international long distance (ILD) services in Israel. In parallel, we began converting our Internet access customers to broadband services, resulting in higher ARPU.
2006-2008: A Major Acquisition
Recognizing the power of M&A transactions to accelerate our growth, in 2006 we acquired 012 Golden Lines, one of our most significant competitors in the ILD and ISP segments. We acquired and then merged the company into our Smile.Communications subsidiary to form 012 Smile.Communications Ltd., and in November 2007 took the combined entity (now called B Communications Ltd.) public on both the Nasdaq and TASE stock exchanges (first under the symbol SMLC and then in March 2010, with the change of company’s name to BCOM).
The acquisition more than tripled our revenues and profits and transformed our company into one of the top-three players in both the Israeli Internet and ILD markets.
During 2008, we completed the complex merger process, realizing synergies that improved our profit margins while expanding our business significantly.
2009-2010: Bezeq Era
In October 2009, our approximately 75%-owned subsidiary, 012 Smile.Communications Ltd., (now called B Communications Ltd.), signed an agreement to acquire the controlling ownership interest in Bezeq (approximately * 31.24%), Israel’s incumbent telecommunications provider.
To obtain required regulatory approvals for the acquisition, we divested 012 Smile.Communications legacy telecommunications business.
This transaction has transformed Internet Gold into the clear leader in Israeli telecommunications, the fulfillment of the goal that we set for ourselves when we founded Internet Gold in 1992.
* – as of April 12, 2010
2010 and Onward:
Our journey of the past 18 years has created a leading communications group that continues to generate significant value for our shareholders.
Having achieved the goal we set for ourselves 18 years ago, we are now in the process of defining our targets and strategies for the next stage.
During the next several years, we plan to focus closely on our existing assets and to develop their unrealized potential. In parallel, over time, we intend to leverage our assets, experience and access to the capital markets to pursue new opportunities – both in Israel and in other growing markets.