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Partner reports on Ministry of Communications announcement on
changes to tender conditions

Rosh Ha'ayin, Israel - August 7th, 2001 - Partner Communications Company Ltd. (NASDAQ, TASE: PTNR, LSE: PCCD) announced today that the Ministry of Communications has informed the Company that the Tender Committee has amended the conditions of the tender to grant additional licenses for mobile telephone services, based on an allocation of frequencies enabling the operation of 2G and 3G technologies and allowing for expansion of the spectrum allocated for the existing mobile telephone operators to provide 3G spectrum as well as additional 2G spectrum.

For Partner, the most significant changes to the tender conditions are the decisions to spread the license fee payments out over a period of five years through 2006, and to extend the period from the time a service is commercially provided until provided to all subscribers in the operator's coverage area, from 12 to 24 months. The committee also announced that tender winners, which presently hold a general license, would have their license term extended an additional ten years from the date of the award of the license won in the present tender.

The Tender Committee, which did not alter the previously announced payment schedule for the 2G bands of spectrum, announced that the terms of payment for 3G bands of spectrum would be as follows:

Within 45 days of receipt of announcement of winning, the bidder will pay 31% of its offer for the band (C.P.I indexed).

  • No later than June 1st 2002 additional 14% of the sum offered will be paid.

  • All payments made from this time till 2006 will be indexed, from day of announcement till actual day of payment, to the "Accountant General Interest Rate", presently set at 7.8%.

  • No later than June 1st 2003 additional 14% of the sum offered will be paid.

  • No later than June 1st 2004 additional 16% of the sum offered will be paid.

  • No later than June 1st 2005 additional 15% of the sum offered will be paid.

  • No later than June 1st 2006 additional 10% of the sum offered will be paid.

The Company welcomes the changes made by the Tender Committee, though it does not believe they materially change its funding requirements.

Partner Communications Company Ltd. is the Global System for Mobile Communications, or GSM, mobile telephone network operator in Israel. The Company commenced full commercial operations in January 1999 under the international Orange Brand name and, through its network, provides quality of service and a range of features to over a million subscribers in Israel. Partner subscribers can use roaming services in 80 countries using 209 GSM networks. The Company shares are quoted on NASDAQ and on the Tel Aviv Stock Exchange (TASE) under the symbol ptnr and on the London Stock Exchange under the symbol pccd. (For further information:

Dr. Dan Eldar, VP Carrier, International and Investor Relations
Email:[email protected]
Tel:+972 - 3 - 905 4151
Fax:+972 - 3 - 905 4161