Partner Communications

Company and Financial Overview

Q3 2015 Results
Safe harbor statement
This presentation includes forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as
amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private
Securities Litigation Reform Act of 1995. Words such as estimate, "believe", "anticipate", "expect", "intend", "seek", "will", "plan",
"could", "may", "project", "goal", "target" and similar expressions often identify forward-looking statements but are not the only way we
identify these statements. In particular, this presentation contains forward-looking statements regarding, among other, (i) the anticipated
offering by the Company of television and 4G services, and (ii) expected gains in efficiency as a result of the network sharing
agreement with Hot Mobile. In addition, all statements other than statements of historical fact included in this presentation regarding our
future performance, plans to increase revenues or margins or preserve or expand market share in existing or new markets, reduce
expenses and any statements regarding other future events or our future prospects, are forward-looking statements.
We have based these forward-looking statements on our current knowledge and our present beliefs and expectations regarding
possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions including (i) potential
difficulties in satisfying regulatory requirements applicable to television operators, which in addition create de facto exclusivity for
existing operators, and in obtaining television content on commercially reasonable terms (ii) the effective implementation of joint actions
regarding network upgrade and maintenance under the network sharing agreement with Hot Mobile as well as consumer habits and
preferences in cellular telephone usage, trends in the Israeli telecommunications industry in general, and the impact of global economic
conditions (iii) Whether the regulations for the wholesale fixed-line market will be implemented as anticipated. Future results may differ
materially from those anticipated herein. For further information regarding risks, uncertainties and assumptions about Partner, trends in
the Israeli telecommunications industry in general, the impact of current global economic conditions and possible regulatory and legal
developments, and other risks we face, see "Item 3. Key Information - 3D. Risk Factors", "Item 4. Information on the Company", "Item 5.
Operating and Financial Review and Prospects", "Item 8. Financial Information - 8A. Consolidated Financial Statements and Other
Financial Information - 8A.1 Legal and Administrative Proceedings" and "Item 11. Quantitative and Qualitative Disclosures about Market
Risk" in the Company's Annual Reports on Form 20-F filed with the SEC, as well as its current reports on Form 6-K furnished to the
SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
 Company overview

3
 Our strategy

Total Innovation & tech Operational

Customer
Dual Branding communications Excellence Human Capital
Centric leadership
company

Excellence in Orange TM Premium Comprehensive value First to launch Orange Optimizing synergies Employee nurturing
enhancing the brand added approach 4G between the Growth oriented
customer experience 012 value for Developing growth organizations units organizational culture
Multi-channel money brand engines and entering Network sharing
Policy of new markets agreement
transparency and (wholesale market, TV Culture of constant
fairness and advanced improvement
products)

4
A comprehensive product offering

Products and services are offered under the orange and / or 012 brands

5
Value-added controlling shareholder

S.B. Israel Telecom Ltd. is an affiliate of Saban Capital Group, Inc. ("SCG"). SCG, founded by Haim
Saban, is a global media and communications private investment firm. Among its current and prior
investments are: Univision (the premier Spanish-language media company in the US); Celestial Tiger
Entertainment (a venture with Lionsgate and Astro, Malaysia's largest pay TV platform, to launch and
operate new branded pay television channels across Asia); MNC (Indonesia's largest and only vertically-
integrated media company); and Partner Communications. With offices in Los Angeles, London and
Singapore, SCG actively manages a globally diversified portfolio of investments across public equities,
credit, alternative investments, and real property assets.

S.B. Israel
Telecom
30.5%

Public float
69.5%

As of October 31, 2015

6
Future savings from network sharing
agreement with HOT Mobile
Network sharing agreement business model
HOT Mobile to pay one-time amount by 2017
CAPEX shared equally
OPEX 50% shared equally and 50% split based on traffic
Key benefits
Savings in CAPEX and OPEX
Smaller number of network sites
Improved network coverage and capacity
Optimal utilization of existing spectrum
National roaming agreement in place until network sharing agreement business
model is implemented
Agreement approved by Antitrust Authority and Ministry of Communications

7
Future relationship as part of brand
agreement with Orange Worldwide

Market Study
Examine Partners positioning within the Israeli telecom market
Assess the best path going forward
Termination of the Brand License Agreement
Year 1: Only Partner has the right to end the agreement
Year 2: Both Partner & Orange have the right to end the agreement
Financial aspect
40 million by the completion of the market study (already received)
50 million if either party decides to end the Brand License agreement
within the two years

8
 Market overview

9
Highly competitive although cellular market
Slight reduction in the number of Players

2011 2015

Partner Q111 ARPU: NIS 115 Partner Q315 ARPU: NIS 71

10
Industry update - main regulatory issues*
Cellular The MoC does not equally enforce obligations to invest in
infrastructure on all the players. Currently the MoC is reviewing its
investments position on this issue

Cellular network Network sharing agreements brought to the MoC should be of

similar investment and ownership obligations to the agreements
sharing already approved
Proposed regulation would allow a cellular subscriber to receive
roaming services abroad from any operator while keeping his
Roaming
cellular number without changing providers - Currently this
regulation is on hold
Proposed regulation may decrease the number of international
International calls calls routed through 012 and adversely impact revenues

New regulation sets price limitations and requires caller to opt in to

Premium calls
complete the call which may negatively impact revenues

* Please see the Company's 2014 Annual Report filed with the SEC and the associated press release of March 11, 2015, and
11 all subsequent filings for a complete update on regulatory matters and associated risks
Industry update - main regulatory issues*
Broadband Implemented but still suffering from growing pains
reform which warrant MOC intervention

Wholesale Fixed Was scheduled to start in May 2015, Bezeq is in

market Telephony breach. Awaiting enforcement by the MoC

Multicast Was scheduled to start in May 2015, Bezeq is in

_ breach. Awaiting enforcement by the MoC

Ability to competitively provide TV services; recommendations of the

TV / Schejter appointed committee: entry of new players will not require a specific
Committee license, new players will have self regulation and must sell of
content to new players.
The MoC is reviewing the criteria under which Bezeq structural
Bezeq structural separation will be removed. Under considerations is the market
share obtained by new players as an indication to ensure long term
separation effective competition in the TV, Fixed Telephony and Broadband
markets.

* Please see the Company's 2014 Annual Report filed with the SEC and the associated press release of March 11, 2015, and
12 all subsequent filings for a complete update on regulatory matters and associated risks
 Financial overview

13
Q3'2015 highlights

Q3 15 Q3 14 YoY change
Total revenue (NIS, M) 1,006 1,102 -9%
Service revenue (NIS, M) 760 862 -12%
Equipment revenue (NIS, M) 246 240 +2%
Adjusted EBITDA (NIS, M) 196 282 -30%
EBITDA margin 19% 26% -7 ppt
Profit (Loss) (NIS, M) (9) 40 N/A
Free cash flow (NIS, M) 291 112 160%
Cellular ARPU (NIS) 71 76 -7%
Quarterly churn rate 10.8% 12.0% -1.2 ppt

14
 Challenging market environment
Cellular subscribers (EOP, in thousands) Cellular ARPU (in NIS)
160

3,500
3,176 140
2,976 2,956
3,000 2,837
2,774 2,747 2,739 120
894
111
2,500 874 823
705 662 635 603
100 97
83
2,000
80 75 76
71 69 70 71
1,500
60

2,282
2,102 2,133 2,132 2,112 2,112 2,136
1,000 40

500 20

0 0
Q1'15 Q2'15 Q3'15 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15
Post-paid Pre-paid

14%
Cellular churn rate 12.7%
12.0%
12% 11.6% 11.4% 11.5%
10.7% 10.9% 10.8%

10%
8.8%

8%

6%

4%

2%

0%
15 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15
Evolution of cellular subscriber base (in '000)

2,747 169 139

2,739
119 158

635 603

2,112 2,136

June 30, 2015

Port In Non Port-In Sales Port Out Non Port-Out ChurnSeptember 30, 2015
Post-Paid subscribers Pre-Paid subscribers

Port in and Port out figures reported in Globes

16
 Company revenues - diversifying revenue
sources

7,000

6,000 5,572

5,000 932
4,519 4,400
NIS million

4,000 735
992

3,000
4,640
2,000 3,784
3,408
1,108 1,054 1,044 1,006
1,000 300 295 287 246
808 759 757 760
0
Q4'14 Q1'15 Q2'15 Q3'15

Service Revenues Equipment Revenues

17
 OPEX - continued focus on efficiencies,
significant steps were already done

900 889

800
NIS million

744

700
675
661 657 *
642 650
630
604 601
600

500
Q4'11 Q4'12 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15

OPEX includes cost of service revenues, and selling, marketing and administrative expenses, and excludes depreciation and
amortization and impairment charges.
*Q3 2015 OPEX includes NIS 35 m one-time expense of the employee retirement plan
18
EBITDA* & EBITDA margin
39%
40%

2,500 35%
31%
29%
2,178 30%
2,000
25% 26%
25%

% total revenues
NIS million

1,500 1,602 19%

20%

1,000 15%
1,114 1,096

10%
500
5%
282 196
- 0%
Q3'14 Q3'15

Adjusted EBITDA Adjusted EBITDA margin

Results include 012 Smile from March 2011

* Adjusted EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including
amortization of intangible assets, deferred expenses-right of use, and share based compensation expenses) and impairment
charges, as a measure of operating profit. Please refer to the section Use of non-GAAP financial measures section in the
Companys quarterly press release
19
Debt & cash evolution (31/12/2011 to 30/09/2015)
Substantial cash on the balance sheet
5,171
532
4,639
1,061
3,773

88 1,418
1,300
NIS million

875 886

2,355

December 31, Scheduled Prepayments** New Loans Linkage Cash September 30,
2011 Repayments differences & 2015
other *
Net debt Cash
* Other includes amortization of deferred issuance expenses and discount
20 ** Prepayments repaid in advance of the original repayment schedule
Debt structure (as of September 30, 2015)
Annual
Yield to
Amount Duration Maturity
Series (NIS M) Coupon (a/o 30/09) Linkage (a/o 30/09)
Series B 243 3.4% 0.7 CPI 2.6%

Series C 701 3.35% 2.2 CPI 1.7%

MAKAM + Variable
Series D 546 4.1 1.3%
1.2% interest Makam
Series E 561 5.5% 1.2 Fixed 1.3%

Borrowings from
banks & others 1,730
Offering expenses (8)

TOTAL 3,773

21
Repayment Schedule and Exposure:
Notes & Loans a/o September 30, 2015 (NIS M)
Variable
Total debt in B.S: 3,773 Variable
interest -
Prime, 152 ,
interest, 546 ,
4%
Cash (1,418) 15% CPI linked,
1,497 , 40%

Net Debt 2,355

Fixed interest,
1,586 , 42%
Receipt of deferred loans of
NIS 200 M
Receipt of deferred loan of
NIS 250 M

800
738 744
702 Loans Notes
700

109
600
557 343

500
530

400
343
312
300 592
542 109
230
200 401
109
308 107
208 234
100
120
50
107
15 50
0 4

22
Bridging EBITDA results (Q3'14 vs. Q3'15)

282

71

196
34
3 21
NIS million

12 7

Q314 Cellular Service Fixed Line Intersegment Equipment Operating Other Income Q315
Revenues Service Revenues Gross Profit Service
Revenues Elimination Expenses

* Adjusted EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including
amortization of intangible assets, deferred expenses-right of use, and share based compensation expenses) and
impairment charges, as a measure of operating profit. Please refer to the section Use of non-GAAP financial measures in
the Companys quarterly press release
23 Revenues presented include intersegment revenues; operating services expenses exclude intersegment expenses.
Bridging EBITDA results (Q2'15 vs. Q3'15)

236 6 1 2
15
NIS million

49 196

21

Q215 Cellular Service Fixed Line Intersegment Equipment Gross Operating Other Income Q315
Revenues Service Revenues Revenues Profit Service Expenses
Elimination

* Adjusted EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including
amortization of intangible assets, deferred expenses-right of use, and share based compensation expenses) and
impairment charges, as a measure of operating profit. Please refer to the section Use of non-GAAP financial measures in
the Companys quarterly press release
24 Revenues presented include intersegment revenues; operating services expenses exclude intersegment expenses.
Balance sheet & cash flow*
Assets NIS million Liabilities and Equity NIS million

Cash and cash equivalents 1,418 Current maturities of borrowings & notes payable 323
Trade receivables and other 1,158 Trade payables 743
Inventories 91 Other current liabilities 374

Total Current Assets 2,667 Total Current Liabilities 1,440

Trade receivables and other 610 Long term borrowings & notes payable 3,450
Property and equipment 1,449 Other liabilities 178
Goodwill 407 Total Long-term Liabilities 3,628
Intangible assets 1,009
Total Long-term Assets 3,475 Equity 1,074

Total Assets 6,142 Total Liabilities and Equity 6,142

1,400
Cash flow before interest
1,234
1,200
1,082 1,041
1,000
NIS million

800

600 520
400
291
200 112
-

Q3'14 Q3'15

Balance sheet as of September 30, 2015. Cash flow includes 012 Smile from March 2011
Free cash flow represents cash flows generated from operating activities before interest payments, net of cash
25
flows used for investments activities, after elimination of cash flows used for the acquisition of 012 Smile.
Partners strengths
Strong foundations:
Widest 4G coverage, leading customer service, network sharing agreement
Billing Relations:
Partner serves ~2.7 million cellular subscribers, in addition to our fixed-line
households with broadband internet and ISP service
Defined Strategy:
Transforming in to a complete telecommunications group, Content/TV,
Wholesale market, Diversified revenue sources, Increasing digital
operation
Innovative DNA:
First to offer Roaming to Customers in Israel, First to offer SMS in Israel,
First to offer 3G & 4G in Israel, New products, Focus on retail operation
Our management
Our team has execution abilities in the telecommunication market with many
years of experience and innovation

26
IR contacts

Ziv Leitman
CFO
+972 (54) 781 4951

Liat Glazer Shaft

Head of Investor Relations
+972 (54) 781 5051
[email protected]

Investor website: www.orange.co.il/en/Investors-Relations/lobby/

27