Ask Ilan Biran, the chief executive of the Bezeq phone company, how he's doing. Assuming he's in a good mood - Cool, he'll say with a smile.

He isn't talking about the bone-chilling winds sweeping through the marketplace. He's slangily replying that he's fine, couldn't be better.

Look at Israel's communications providers, at their massive losses, at the tremendous pressure bearing down on their shareholders and managers as their market implodes. You can see why Biran is about the only one still smiling and chirping "Cool".

But don't let his use of thirties-something slang fool you into thinking he has time for New Economy fads, or the vernacular of their young proponents. Biran doesn't easily grant interviews. But when he does, he waxes cynical about the hi-tech revelry in general and in telecommunications in particular.

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A year ago, when the United States and Europe were hailing third-generation and the daring exploration of cyberspace using mobile phones, Biran took a napkin and a pencil and did some math.

Okay. Third-generation spectrum licenses cost $100 billion. Another $100 billion would be required to deploy the 3G networks throughout Europe. Now, how to return the investment? Or, as Biran likes to say, what's the NPV of this?

Over the hump lies rubble

Today, with Nasdaq sliding below 2,000 points, "NPV" or net present value has become the latest catchphrase, said sternly, authoritatively. But Biran was first to use the phrase, back in August 2000. NPV certainly wasn't a buzzword back then. No, then everybody was talking about m-commerce and location-based services, or video streaming.

Truth be told, even back in August 2000, it was totally unclear how Europe's mobile communications companies would return their incomprehensibly enormous investments. One had to make several extremely aggressive (not to say stupid) assumptions to pull off the trick.

Since August 2000, there have been some new developments on the market. Sentiment toward the communications sector has changed somewhat.

But Biran says the local telecommunications community still doesn't get it. He says the community consists of two basic characters: the ones that say OK, there was an earthquake, let's move on just a little more slowly; and the ones that say OK, there was a rumble, but once over the hump, everything will return to normal.

Biran doesn't think there's a thing beyond the hump. Rumble, earthquake whatever, it's rubble, and the market players will have to construct new economic models that generate cash flow, or else resign themselves to Chapter 11.

This is Biran's credo in a nutshell: Double-digit growth rates can't be sustained over decades.

"It can only exist in niches during certain periods of time. Growth in the wireless market also dropped to single digits. Telecommunications led the information technology revolution but it made fundamental mistakes. The worst was third-generation wireless. These mistakes were made in Israel too. But now it's clear that in the end the telecommunications market will have only three players, because the consumer wants a package of services, not a package of suppliers," he says.

We're not in Kyoto any more

But hang on, what about Japan? Doesn't it prove there is demand for advanced services, that there's a future in advanced applications?

"Japan? We're not in Japan," Biran points out. "In the morning they tell us to look at the United States, at mid-day they point to Europe and now they're adding Japan. Japanese technology and Japanese people aren't relevant to us. We aren't Japanese."

Maybe it's blind luck. Maybe it's just that the regulator tied up Bezeq hand and foot. What's sure is that Bezeq stock has lost only 25% in the last year, and that's no coincidence. Bezeq has proved to be one of the strongest telcos in the world, share price-wise.

But its subsidiaries do seem to have been somewhat infected by the hi-tech euphoria. Pele-Phone Communications focused on nabbing a bigger share of the cellular market at the expense of profits, and is only now returning to watching its bottom line. The Internet supplier and long-distance carrier Bezeq International got dragged into heavy losses and investments in Internet businesses with no obvious business model. And YES, the satellite TV broadcaster, well it's clearly going to be one of the black holes of the Israeli business scene.

Biran drily admits that YES doesn't have a short-term business model, or a medium-term one either. But he thinks Bezeq's investment in the satellite broadcaster is of strategic importance. He's also pleased with YES's new manager Shlomo Liran, who is initiating some drastic changes.

On the strategy, the cable TV companies would agree they think YES's real agenda is to hamper their penetration into the domestic communications and fast Internet market, today Bezeq's exclusive province.

Fast Internet? Yes, it exists. But Biran can't get excited about it. Less than 15,000 people have signed up for Bezeq's fast Internet service. And of these, many are businesses for whom fast Internet over ADSL infrastructure is a cheap alternative to designated lines such as frame relay.

On what subject does Biran finally turn effusive? Bezeq's cash situation, of course. The company is sitting on NIS 1.5 billion. That gets him going. "I sat down with our CFO, Oren Lider, back in August last year. We looked at the marketplace and then I told him, hey Oren, get going - cash flow."