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TheStreet Open House

Partner Communications Reports Fourth Quarter And Annual 2012 Results1

In Q4 2012, total revenues were NIS 1,258 million (US$ 337 million), a decrease of 21% from NIS 1,589 million in Q4 2011.

Annual service revenues totaled NIS 4,640 million (US$ 1,243 million) in 2012, decreasing by 11% from NIS 5,224 million in 2011.

Service revenues for the cellular segment in 2012 were NIS 3,592 million (US$ 962 million), decreasing by 15% from NIS 4,248 million in 2011. The decrease was mainly a result of the intense price erosion of cellular services including voice and data services, following the entry of new competitors (new operators and MVNO's) in the first half of the year, as well as the continued decrease in revenues from roaming services. The decrease also reflected the lower Post-Paid cellular subscriber base which decreased by approximately 4% on an average basis over the past year.

Service revenues for the fixed line segment reached NIS 1,210 million (US$ 324 million) in 2012, an increase of 7% compared with NIS 1,127 million in 2011. The increase largely reflects the contribution of 012 Smile to the Group’s results for the full year in 2012, compared to only ten months in 2011 (from the date of acquisition in March 2011). The impact of 012 Smile’s contribution was partially offset by price erosion in fixed line services due to tougher competitive market conditions, and a gradual decrease in the average number of internet service subscribers over the period.

For Q4 2012, service revenues totaled NIS 1,036 million (US$ 278 million), decreasing by 19% from NIS 1,286 million in Q4 2011. For the cellular segment, service revenues in Q4 2012 were NIS 788 million (US$ 211 million), a decrease of 22% from NIS 1,005 million in Q4 2011. The decrease was explained largely by the same factors as the annual decrease. For the fixed line segment, service revenues totaled NIS 294 million (US$ 79 million) in Q4 2012, a decrease of 9% from NIS 324 million in Q4 2011. The decrease mainly reflected price erosion in fixed line services including voice and internet services, as well as a decrease in the average number of internet service subscribers over the period.

Equipment revenues in 2012 totaled NIS 932 million (US$ 250 million), a decrease of 47% compared with NIS 1,774 million in 2011. The decrease largely reflected a significant decrease in the quantity of cellular equipment sold, reflecting increased competition from independent handset suppliers, the impact of the Company’s strategy to require more stringent payment terms, a general decrease in market demand, and an end to the use of special discounts for customers with new handsets.

In Q4 2012, equipment revenues were NIS 222 million (US$ 59 million), decreasing by 27% from NIS 303 million in Q4 2011. As with the annual results, the quarterly decrease was due to a significant reduction in the quantity of cellular equipment sold, for the same reasons as the annual decrease. Sales in the fourth quarter were positively affected by the launch of the iPhone 5 model in December 2012.

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