By Steven Scheer JERUSALEM, Dec 26 (Reuters) - A group led by Sweden'sViaeuropa won the right to build a super-fast Internet networkacross Israel that would significantly upgrade the telecomslandscape and compete with incumbent phone and cable companies. In one of its most ambitious projects, the governmentearlier this year gave the go-ahead for state-run utility IsraelElectric Corp (IEC) to find investors to build thenetwork using fibre optic cables, which can provide Internetspeeds of 1 gigabit per second - or as much as 100 times what isavailable now. IEC said on Wednesday that Viaeuropa's bid, chosen by aquasi-governmental selection committee, will be analysed overthe next month with the hope that the network can start to bedeployed by the end of 2013. "This telecoms venture will ... put Israel on par withdeveloped countries," said Yiftach Ron-Tal, IEC's chairman. The process was delayed five times and by seven months amidlimited participation. The government was forced to sweeten theterms of the project to the winner, such as raising the stake ofthe chosen group in a new private company to 60 percent from 51percent. IEC will hold 40 percent of the company, which willbuild and operate a fibre-to-the-home (FTTH) network. Initially, four groups submitted bids but just one made ituntil the end, as two of the other companies joined up withViaeurope. Viaeuropa holds half of the consortium, four other companies - including Israel's Rapac Communications and Infrastructure and BATM Advanced Communications - will hold12.5 percent each. The project is estimated to cost billions of shekels todeploy some 25,000 km of fibre optics - 70 percent of which willbe above ground to keep costs down. The government seeks tocover two-thirds of Israel by 2020. IEC already has close to3,000 km of fibre across the country. Using fibre to the curb and standard copper lines to thehome, Bezeq - Israel's largest telecom group - offersInternet to 1.15 million customers for a 59 percent marketshare. Cable company HOT has 41 percent. Both companies offer speeds up to 100 megabits per secondbut most Israelis surf at speeds of 5-10 megabits, which isdeemed adequate for downloading and streaming video and music. Upload speeds, though, are no more than 1-1.5 megabits. Withfibre optics, 1 gigabit per second of upload and download can bereached, allowing for improved interactive services. The biggest winners of the fibre deployment are expected tobe Israel's top mobile phone operators, Cellcom andPartner Communications, which bought companies thatoffer Internet services and seek to develop Internet TV. But they now rely on the HOT and Bezeq infrastructures,limiting their own offerings, while Bezeq has started its ownFTTH trials. Both companies have said they welcome newcompetition.