Partner Communications Reports 2007 Annual and Q4 Results

Business Wire, Feb 6, 2008

* 2007 net income increases by 38% to NIS 940 million

* Board authorizes share buyback of up to NIS 600 million in 2008 in addition to 80% dividend payout ratio

* 65,000 net additions in Q4 2007

ROSH HA'AYIN, Israel -- 2007 Annual Highlights (compared with 2006)

* Total revenues: NIS 6.1 billion (US$ 1.6 billion), an increase of 9.0%

* Operating Profit: NIS 1.4 billion (US$ 365 million), an increase of 15.3%

* Net Income: NIS 940 million (US$ 244 million), an increase of 37.7%

* EBITDA(1): NIS 2.0 billion (US$ 524 million), an increase of 8.9%

* EBITDA Margin(2): 33.0% of total revenues, no change from 33.0%

* Subscriber Base: 192,000 net additions in 2007, subscriber base of 2.86 million, including 633,000 3G subscribers

Q4 2007 Highlights (compared with Q4 2006)

* Total revenues: NIS 1.6 billion (US$ 423 million), an increase of 12.6%

* Operating Profit: NIS 347 million (US$ 90 million), an increase of 10.4%

* Net Income: NIS 302 million (US$ 79 million), an increase of 85.2%

* EBITDA(1): NIS 501 million (US$ 130 million), an increase of 8.6%

* EBITDA Margin(3): 30.8% of total revenues, down from 31.9%

* Subscriber Base: 65,000 net additions

* Dividend Declared: NIS 320 million dividend payment for the fourth quarter, fulfilling an 80% of annual net income payout ratio

1 See "Use of Non-GAAP Financial Measures" below (p16)

2 Equivalent to 37.8% of service revenues in 2007

3 Equivalent to 36.8% of service revenues in Q4 2007

Key Financial Results:

[TABLE OMITTED]

Key Operating Indicators:

[TABLE OMITTED]

Partner Communications Company Ltd. ("Partner" or "the Company") (Nasdaq:PTNR)(LSE:PCCD)(TASE:PTNR), a leading Israeli mobile communications operator, today announced its results for the year and quarter ended December 31(st), 2007.

Commenting on the 2007 annual results, Partner's CEO, Mr. David Avner, said: "I am very pleased with Partner's 2007 excellent financial and operational results. 2007 was a record year for Partner; and we exceeded our objectives in all financial and operational dimensions. We have added over 192,000 customers to our subscriber base, most of whom high-quality post-paid customers, of whom 65,000 joined in the last quarter. Our leadership in 3.5G continues to strengthen, and approximately one third of our post-paid subscriber base is already benefiting from the wide range of 3G services and advanced handsets we offer, enabling us to generate more than NIS 670 million revenues from data and content in 2007 (including SMS messages), we believe the highest content revenues in the Israeli cellular market."

Mr. Avner added: "Our brand - orange(TM) - was re-elected for the fifth consecutive year as the leading telecom brand in Israel. We launched in 2007 innovative new applications and services such as ICQ, Messenger and more than 90 TV channels. We also demonstrated our values of fairness and simplicity by introducing a unique marketing campaign that helped our customers to optimize their tariff plans based on their usage patterns. Partner's success is the result of our continued focus on satisfying our customers' needs, ensuring a high-standard customer service, together with a high-quality network and a wide variety of data services.

The major event in Israel's cellular industry was the introduction in December 2007 of number portability. The introduction of number portability requires us to invest additional resources in order to reach out to new subscribers and to ensure the continued satisfaction of Partner's existing subscribers. We believe that the net impact of number portability has been positive to date, and as of January 31st, 2008, more than 6,000 post-paid net additions had joined Partner bringing their number from their original operator together with them. The attraction of Partner's brand was also strongly reflected in the number of net adds in the last quarter. I am certain that this is only the beginning and that Partner will benefit further from number portability."

Mr. Avner also said: "Our strategic goals for 2008 will include focusing on efficiency, as demonstrated in the transaction with Ericsson, and establishing the platform for our non-cellular activity. I am confident in Partner's employees' ability to continue delivering value to our shareholders and to leverage the assets we have built over the years."

Financial Review

In 2007 Partner achieved total net revenues of NIS 6,113.6 million (US$ 1,589.6 million), an increase of 9.0% from NIS 5,606.7 million in 2006. Revenues for Q4 2007 were NIS 1,627.4 million (US$ 423.1 million), a 12.6 % increase from NIS 1,445.1 million in Q4 2006.

Annual service revenues totalled NIS 5,328.7 million (US$ 1,385.5 million) in 2007, representing an increase of 6.0% from NIS 5,027.3 million in 2006. Service revenues in Q4 2007 increased by 6.2% to NIS 1,361.8 million (US$ 354.1 million) from NIS 1,282.2 million in Q4 2006. Both the annual and quarterly increases were driven primarily by subscriber base growth, an increase in the weight of post-paid subscribers in our subscriber base, higher average minutes of use, as well as an increase in content and data revenues, partially offset by a decrease in average revenue per minute.