Palestinian Tycoon Purchases Israeli High-Tech Company

Article Summary
Hani Alami, a Palestinian telecommunications tycoon, says his purchase of an Israeli telecom is "just business.”

Last week [the week of Sept. 1], Hani Alami, a Palestinian resident of [the East Jerusalem neighborhood of Beit Hanina, was engaged in a determined struggle to acquire Alvarion, a once-promising Israeli telecommunications company. Israeli company Sigma Wave Ltd. offered to acquire Alvarion’s assets for NIS 38 million [$10.5 million], raising its bid after Alami had offered to pay NIS 21 million [$5.8 million] for the company. However, at the very last minute, Alami decided to jump on the opportunity and match the offer. In the end, Alami won the bid — in part, thanks to the support of the 48 employees of the company, to whom he had offered 10% of the company’s shares, promising to keep them all as his employees.

Alami is a Palestinian telecommunications tycoon who established a number of telecommunications companies — first and foremost Coolnet, an Internet service provider (ISP) that operates high-speed Internet services using ADSL technology, as well as Wi-Fi-based, OFDM-based and microwave-based broadband communications services. Coolnet also operates integration services for wireless communication networks, carries out projects for Israeli companies like Bynet and Radwin, and serves as a project contractor in the Arab sector for the Israeli telecommunications company Cellcom and for Israel’s largest telecommunications group Bezeq. In the framework of this activity, Alvarion was a technology provider for Coolnet. The company has even signed an agreement with Israel Electric Corp. (IEC) for the supply of Internet services to the West Bank territories through fiber-optic lines.

“Each of the partners will incorporate the Alvarion equipment into his projects”

Alami started out as a co-founder of the Palestinian telecommunications group BCI, which, following the Oslo Accords, laid out communications infrastructures in the Palestinian Authority areas to serve the local population. The major communications network set up by the group, for which Alami was personally responsible, was that of Motorola, which distributed the products of companies like Samsung and Polycom.

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The acquisition of Alvarion was actually made through Valley Telecom Ltd., which is jointly owned by Alami and Jorge Pinievsky, who also owns the telecommunications company Mobile Tornado. However, in the coming days a new company is to be formed, under the joint ownership of the three partners who funneled the funds required for the purchase: Alami, Pinievsky and Peleg Hadar. The latter is a business development director at the Rapac Group, which joined forces with ViaEuropa in the group that won the IEC optic fiber tender.

According to assessments, Hadar is considered one of the key figures behind the successful bid by the group. The new group, which is to run Alvarion, will be established in the next few days under the name “New Valley” or “Valley 2013” and it will be equally owned by Alami , Pinievsky and Hadar (who will each have a 30% share in the group, while 10% of the group will be employee-owned.)

The company is expected to be handed over to the three partners only between Sept. 15 and 17. They will then have to appoint a managerial staff to run the company, and subsequently bring it back to normal operation. “We will first complete the ownership transition, and then go on to build a network of resellers, rebuild the network, and we will continue to operate small-scale projects, so as to bring [dormant] units back into the production cycle,” Alami says. “We will revive the startup spirit in the company and build it up on that basis. Alvarion is going to be profitable already in the next quarter.”

According to Alami, there will be no direct relationship between the companies run by each of the partners and Alvarion, although some of these companies are already its customers. “As the director of a service integration company, I am a customer of Alvarion and thus, I am using its products in my activity in Africa and the Middle East. I am familiar with its products, as well as with those of the competitors, and I know the market,” Alami says. “I decided to bring into the deal Peleg Hadar, who specializes in financing programs and who was one of the key architects of the ViaEuropa bid, and Jorge [Pinievsky], who has vast experience in communications and integration projects. We will each incorporate the Alvarion equipment into the communications projects we run.”

“We are going to open branches outside Israel, to be able to market to the Arab world”

When asked to what uses he intends to put the Alvarion technology, which did not seem to be in large demand, Alami argues that it is a misconception. “Alvarion specialized in Radio Frequency (RF) and microwave technologies, which make the Internet accessible anywhere, even in rural and remote areas. Fiber-optic technology is great for urban environments, but when you go out to rural areas, microwave communications can readily provide you with Internet connection, and this, at a low investment.” Alami adds that “Alvarion has a complementary Wi-Fi technology based on its acquisition of Wavion [in 2011]. Our network currently provides wireless Internet connectivity to 20 thousand customers in the territories.”

As a Palestinian born in Jerusalem, do you feel that the acquisition of a company once considered one of the leading companies in Israel closes a circle for you?

“I don’t care whether Alvarion is an Israeli or a Palestinian company. As far as I’m concerned, it’s just business. I know the company. And I worked with it for long years. I am interested in running the company, and eager to bring it to success. As a native of Jerusalem, I can tell you that if each of us does his own share, as best he can, we may yet achieve peace.”

Alami goes on to recount that Alvarion may set up operations in the Palestinian Authority as well. “We haven’t thought about it at first, but it looks like it would be possible to expand its activity to the Palestinian Authority and the entire Middle East. We are going to open branches of the company outside Israel, so as to be able to market its products to the Arab world.”

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Found in: palestinian economy, palestinian, internet, business
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