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Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) could close its wholly-owned subsidiary Partner Future Communications, TheMarker has learned.

PFC, which specializes in venture capital investments and alliances, has in effect been closed after cutting its staff from six workers to three workers. The company once had 12 workers. The firm is expected to change its investment policy, and to focus on buying technology.

Due to the devaluation of its holdings in PFC, in Q3 2001 Partner wrote down its holdings by about $2.1 million. Partner, which had invested $4 million in PFC, will probably write down another $2 million.

PFC's enhanced services contributed some 3.5% of Partner's total revenue in the third quarter, compared with less than 3% in the second quarter.

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Partner CFO Alan Gelman said at the release of the third-quarter report that PFC invested Partner's $4 million in four startups, all of which are in the process of raising capital. He said that none of these companies has a record of failure, or is likely to close.

Cellular operators worldwide are today required to make more alliances with entities in the value chain. But to date Israeli companies have strengthened their hold throughout the value chain and hurt themselves, sources estimate.

PFC CEO Amnon Harari told TheMarker that PFC has not closed. He said that the firm had adjusted the workforce to the volume of activity. Harari added that PFC has about 15 portfolio startups, which are operating according to the market's current level of activity.