Bezeq Israel Telecom has begun to deploy a fast-speed Internet subsea cable aimed at connecting Europe to Asia that its chairman says could ultimately reduce dependency on the Strait of Hormuz.
Some 17 per cent of global broadband goes through Hormuz, mostly from Qatar and India, and the new cable project would, "solve some of the congestion that some of the Persian Gulf countries currently have in the Strait of Hormuz," Tomer Raved, Bezeq's chairman, told Reuters after reporting quarterly financial results.
Deployment of the more than 400-terabyte cables will take two years and Bezeq will soon announce a European partner in the ILS500 million ($172 million) project, with two more subsea cables to be launched later this year, he said on Wednesday.
"It positions Israel as the digital backbone, not just of the region, but globally, given the need for more connectivity in the region and between the different continents," Raved said.
Iran has warned that submarine cables in the strait were a vulnerable point for the region's digital economy. Several fibre-optic cables snake across the strait's seabed, connecting countries from India and Southeast Asia to Europe via the gulf states and Egypt.
Raved said it was unlikely these cables would be damaged since they are owned by a consortium of countries and telecom companies in the region, including from Iraq, Saudi Arabia and Oman.
Still, "you always need to have redundancy and backup routes," he said. "The European continent needs to connect to Asia in general, and India specifically."
Bezeq, Israel's largest telecoms group, said on Wednesday it earned adjusted net profit of ILS300 million ($103.25 million) in the first quarter, up from 288 million a year earlier.
Core revenue, which excludes fixed line telephony, rose 2.6 per cent to ILS2.03 billion.
The company maintained a projection of adjusted net profit of ILS1.0 billion to ILS1.1 billion in 2026, versus 1.09 billion in 2025. Adjusted earnings before interest, taxes, depreciation and amortisation would be ILS3.74 billion to ILS3.8 billion this year, largely flat from 2025.
Its fibre network deployment has now ended by reaching three million homes, with 1.04 million of them as subscribers. It holds a 50 per cent market share.
Due to the Iran war, mobile phone unit Pelephone posted a 33 per cent drop in adjusted net profit in the quarter to ILS22 million, while revenue fell 1.3 per cent. Its total number of subscribers rose to 2.699 million from 2.631 million a year ago. Some 1.425 million of those are 5G subscribers.
Bezeq's shares fell three per cent in Tel Aviv.
(Reporting by Steven Scheer, Editing by Louise Heavens, William Maclean)