The telecommunications sector – with its rapidly changing technology, monopolistic features, and large start-up costs – has presented challenges for the PA. It is a difficult sector to manage and an area where governments around the world struggle to find the appropriate regulatory balance. These challenges are further exacerbated by a risky and uncertain political environment that discourages investors in WB&G. In view of these risks, in 1996 the PA provided the first operator with a statutory monopoly. While the monopoly on mobile communications ended in 2001, in practice it continued until 2009 (excluding unauthorized Israeli operators.) The dominance of one operator in the market and the absence of a strong regulator created the potential for “state capture” and a risk that a level playing field for other private sector players would not be achieved. In recent years the government has opened up the market by awarding more licenses and undertaking new initiatives to attract telecommunications providers. Recent entrants into the telecommunications and IT markets helped reduce the dominance of the incumbent provider. To strengthen the regulatory regime, a new telecommunications law was passed in 2009 to create an independent regulatory body. However, the law has not been put into effect. Our report suggests that while progress is being made, governance of this sector could be markedly improved by establishing the independent regulator set out in the telecommunications law. The sector still suffers from weak regulation, in part due to insufficient technical capacity and lack of consistent and transparent licensing rules.