Partner Communications Reports First Quarter 2007 Results

Partner Communications Company Ltd. ("Partner")
(Nasdaq:PTNR)(LSE:PCCD)(TASE:PTNR), a leading Israeli mobile
communications operator, today announced its results for the first
quarter of 2007. Partner reported revenues of NIS 1.4 billion (US$ 341
million) in Q1 2007, EBITDA of NIS 455 million (US$ 109 million), the
equivalent of 32.1% of total revenue, and net income of
NIS 196 million (US$ 47 million).

Commenting on the results, Partner's CEO, David Avner, said: "the
first quarter of 2007 was yet another good quarter for Partner. We are
pleased to report that the number of 3G subscribers reached 333,000 at
quarter end, more than 12% of our 2.7 million customer base. These
customers enjoy a wide and continuously expanding range of 3G services
and handsets. Our subscribers can also benefit from our introduction
of HSDPA capabilities in most populated areas around the country,
enabling a unique high-speed wireless Internet access experience. We
view our expanding 3G services as an important growth engine for
Partner."

"The assets built by the Company in recent years, that make it a
leading cellular company in Israel, continued to strengthen. We expect
that our core strengths as providers of superb network quality,
excellent customer service, the strongest telecom brand and the most
advanced data and content services, will enable us to continue to grow
our subscriber base and drive value for our shareholders. These assets
will also be instrumental when we broaden the portfolio of services we
offer our customers. With the transmission and fixed line telephony
licenses now awarded to us, we are well on our way to offering
customers a wide range of superb telecom services."

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*T
Q1 2007 vs. Q1 2006

Q1 2006 Q1 2007 Change
Revenues (NIS millions) 1,326.6 1,417.8 6.9%
Operating Profit (NIS millions) 273.5 301.1 10.1%
Net Income (NIS millions) 160.4 195.8 22.1%
Cash flow from operating activities net of
investing activities (NIS millions) 68.4 241.1 252.5%
----------------------------------------------------------------------
EBITDA* (NIS millions) 438.6 454.9 3.7%
Subscribers (thousands) 2,560 2,703 5.6%
Estimated Market Share (%) 32 32 -
Quarterly Churn Rate (%) 4.2 4.4 0.2
Average Monthly Usage per Subscriber
(minutes) 301 323 7.3%
Average Monthly Revenue per Subscriber (NIS) 152 153 0.7%
----------------------------------------------------------------------
* See "Use of Non-GAAP Financial Measures" below.
*T

Financial Review

Partner's Q1 2007 revenues totaled NIS 1,417.8 million (US$ 341.2
million), an increase of 6.9% from NIS 1,326.6 million in Q1 2006, and
a decrease of 1.9% from NIS 1,445.1 million in Q4 2006. The increase
compared with Q1 2006 was driven primarily by the increase in service
revenues of 6.3% from NIS 1,184.2 million in Q1 2006 to NIS 1,258.3
million (US$ 302.8 million) in Q1 2007. Compared with Q4 2006, service
revenues decreased in Q1 2007 by 1.9% from NIS 1,282.2 million. The
increase in service revenues from Q1 2006 derived principally from the
larger subscriber base and increased minutes of use, offset by the
impact of two regulatory measures: firstly, by the impact of the
mandated additional reduction in interconnection tariffs which went
into effect on March 1st, 2007, as part of the Ministry of
Communications' program of mandated gradual reductions from 2005 to
2008; secondly, by a new voicemail regulation that obligates cellular
and fixed telephony operators to provide, as of January 2007, a
two-second announcement that the call is being directed to voicemail,
in all local calls made to our subscribers and directed to voicemail.
According to the new regulation calls directed to the voicemail are
charged from one second after the announcement is made. We expect that
this will result in a revenue reduction of approximately NIS 60
million in 2007.

Equipment revenues increased by 12.0% from NIS 142.4 million in Q1
2006 to NIS 159.5 million (US$ 38.4 million) in Q1 2007, due largely
to an increase in the number and proportion of 3G handset sales, but
decreased by 2.1% from NIS 162.9 million in Q4 2006.

Content and data revenues in Q1 2007 accounted for 10.6% of total
revenues and 12.0% of service revenues, up from 9.0% of total revenues
and 10.1% of service revenues in Q1 2006, and up from 10.1% of total
revenues and 11.4% of service revenues in Q4 2006. Non-SMS data and
content revenues increased by 21.1% compared with Q1 2006.

The cost of service revenues was NIS 758.4 million (US$ 182.5
million) in Q1 2007, an increase of 1.8% from NIS 744.7 million in Q1
2006 but a decrease of 2.0% from NIS 774.1 million in Q4 2006. The
increase compared with Q1 2006 was primarily due to higher variable
airtime costs resulting from the growth in airtime usage, offset by
lower depreciation, lower royalties and efficiency measures taken by
the Company. The decrease compared with Q4 2006 is due principally to
lower variable airtime costs. The cost of equipment revenues in Q1
2007 totaled NIS 213.4 million (US$ 51.4 million) representing an
increase of 2.9% from NIS 207.4 million in Q1 2006, but a decrease of
4.9% from NIS 224.4 million in Q4 2006.

Gross profit from services was NIS 499.9 million (US$ 120.3
million) in Q1 2007, an increase of 13.7% from NIS 439.5 million in Q1
2006 and a decrease of 1.6% from NIS 508.1 million in Q4 2006. Gross
loss on equipment in Q1 2007 was NIS 53.9 million (US$ 13.0 million),
a decrease of 17.1% from NIS 65.0 million in Q1 2006 and a decrease of
12.4% from NIS 61.5 million in Q4 2006. Overall, gross profit
increased in Q1 2007 by 19.1% from NIS 374.5 million in Q1 2006 to
446.0 million (US$ 107.3 million) and was approximately equal to gross
profit in Q4 2006 of NIS 446.6 million.

Largely reflecting differences in quarter-by-quarter campaign
scheduling, Q1 2007 saw an increase in selling, marketing, general and
administration expenses of 43.5% from NIS 100.9 million in Q1 2006 to
NIS 144.9 million (US$ 34.9 million). Compared with Q4 2006, expenses
increased by 9.1% from NIS 132.7 million.

Operating profit overall was NIS 301.1 million (US$ 72.5 million)
in Q1 2007, a 10.1% increase from NIS 273.5 million in Q1 2006 and a
4.1% decrease from NIS 313.9 million in Q4 2006. Quarterly EBITDA
increased by 3.7% from NIS 438.6 million in Q1 2006 to NIS 454.9
million (US$ 109.5 million) in Q1 2007 and decreased by 1.5% from NIS
461.6 million in Q4 2006. On a revenue basis, EBITDA was the
equivalent of 32.1% of total revenues in Q1 2007, compared with 33.1%
in Q1 2006 and 31.9% in Q4 2006.

Q1 2007 financial expenses totaled NIS 19.6 million (US$ 4.7
million), decreasing by 49.2% from NIS 38.6 million in Q1 2006 and by
10.5% from NIS 21.9 million in Q4 2006. The decrease compared with Q1
2006 largely reflected lower interest expenses, resulting from the
lower CPI level, whereas the decrease compared with Q4 2006 is driven
primarily by the stronger Shekel, which reduced foreign currency
exchange expenses.

Net income in Q1 2007 was NIS 195.8 million (US$ 47.1 million),
representing an increase of 22.1% from NIS 160.4 million in Q1 2006
and an increase of 20.2% from NIS 163.0 million in Q4 2006.

Basic earnings per share or ADS, based on the average number of
shares outstanding during the quarter, was NIS 1.26 (30 US cents) in
Q1 2007, up 20.0% from NIS 1.05 in Q1 2006, and up by 18.9% from NIS
1.06 in Q4 2006.

Funding and Investing Review

Cash flows generated from operating activities, net of cash flows
from investing activities, totaled NIS 241.1 million (US$ 58.0
million) in Q1 2007, compared with NIS 68.4 million in Q1 2006, an
increase of 252.5%, and compared with NIS 163.6 million in Q4 2006, an
increase of 47.4%. Both increases were due primarily to an increase in
cash flows from operating activities, due to a change in payment terms
to suppliers, offset by an increase in the level of investment in
fixed assets.

Net investment in fixed assets in Q1 2007 was NIS 85.5 million
(US$ 20.6 million), up 26.4% from NIS 67.7 million in Q1 2006 but down
58.8% from NIS 207.5 million in Q4 2006.

The Board of Directors has approved the distribution of a cash
dividend for Q1 2007 of NIS 0.51 per share (approximately NIS 80
million or US$ 19 million) to shareholders and ADS holders on record
as of June 5th, 2007. The dividend will be paid on June 18th, 2007.

Operational Review

In Q1 2007, approximately 35,000 net active subscribers joined the
Company, compared with approximately 31,000 in Q1 2006. The active
subscriber base at quarter-end was approximately 2,703,000, including
approximately 626,000 business subscribers (23% of the base),
1,294,000 postpaid private subscribers (48% of the base) and 783,000
prepaid subscribers (29% of the base). Approximately 333,000 of the
subscribers were 3G network subscribed as of end of Q1 2007. Total
market share at quarter-end Q1 2007 is estimated at 32%.

The quarterly churn rate in Q1 2007 increased from 4.2% in Q1 2006
and 4.0% in Q4 2006 to 4.4%, with both increases being attributable to
higher prepaid churn.

Q1 2007 average monthly usage per subscriber (MOU) was 323
minutes, an increase of 7.3% from 301 in Q1 2006 and an increase of
2.2% from 316 in Q4 2006. ARPU in Q1 2007 was approximately NIS 153
(US$ 36.8), an increase of 0.7% from NIS 152 in Q1 2006 and a decrease
of 3.8% from NIS 159 in Q4 2006.

Commenting on the Company's results, Mr. Emanuel Avner, Partner's
Chief Financial Officer said, "We are pleased with the performance
this quarter. Service revenue growth has been solid, despite the
introduction of two significant regulatory measures that have
negatively impacted revenues. Our net income growth is also very
encouraging."

Outlook and Guidance

Emanuel Avner, Partner's Chief Financial Officer, said: "Our
quarterly results and future prospects support the annual guidance for
2007 which we gave in the press release of January 31st 2007."

Conference Call Details

Partner Communications will hold a conference call to discuss the
company's first-quarter results on Monday, May 7th, 2007, at 17:00
Israel local time (10AM EST). This conference call will be broadcast
live over the Internet and can be accessed by all interested parties
through our investor relations web site at
http://www.investors.partner.co.il.

To listen to the broadcast, please go to the web site at least 15
minutes prior to the start of the call to register, download and
install any necessary audio software. For those unable to listen to
the live broadcast, an archive of the call will be available via the
Internet (at the same location as the live broadcast) shortly after
the call ends, and until midnight of May 14th, 2007.

About Partner Communications

Partner Communications Company Ltd. (Partner) is a leading Israeli
mobile communications operator providing GSM / GPRS / UMTS / HSDPA
services and wire free applications under the orange(TM) brand. The
Company provides quality service and a range of features to 2.703
million subscribers in Israel (as of March 31, 2007). The Company
launched its 3G service in 2004. Partner's ADSs are quoted on The
NASDAQ Global Select Market(TM) and on the Tel Aviv Stock Exchange
under the symbol PTNR. The shares are also traded on the London Stock
Exchange under the symbol PCCD.

Partner is a subsidiary of Hutchison Telecommunications
International Limited (Hutchison Telecom). Hutchison Telecom is a
leading listed telecommunications operator (SEHK: 2332; NYSE: HTX)
focusing on dynamic markets. It currently offers mobile and fixed-line
telecommunication services in Hong Kong, and operates or is rolling
out mobile telecommunication services in India, Israel, Macau,
Thailand, Sri Lanka, Ghana, Indonesia and Vietnam.

For more information about Partner, see
www.investors.partner.co.il

Note: This press release 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. We have based these forward-looking
statements on our current expectations and projections about future
events. These forward-looking statements are subject to risks,
uncertainties and assumptions about Partner.

Words such as "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. All statements other
than statements of historical fact included in this press release
regarding our future performance (including our outlook and guidance
for 2007), 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.

Because such statements involve risks and uncertainties, actual
results may differ materially from the results currently expected.
Factors that could cause such differences include, but are not limited
to:

-- the effects of the high degree of regulation in the
telecommunications market in which we operate;

-- regulatory developments relating to tariffs, including
interconnect tariffs;

-- the difficulties associated with obtaining all permits
required for building and operating of antenna sites;

-- the requirement to indemnify planning committees in respect of
claims made against them relating to the depreciation of
property values or to alleged health damage resulting from
antenna sites;

-- alleged health risks related to antenna sites and use of
telecommunication devices;

-- the effects of vigorous competition in the market in which we
operate and for more valuable customers, which may decrease
prices charged, increase churn and change our customer mix,
profitability and average revenue per user, and the response
of competitors to industry and regulatory developments;

-- uncertainties about the degree of growth in the number of
consumers in Israel using wireless personal communications
services and the growth in the Israeli population;

-- the risks associated with the implementation of a third
generation (3G) network and business strategy, including risks
relating to the operations of new systems and technologies,
potential unanticipated costs, uncertainties regarding the
adequacy of suppliers on whom we must rely to provide both
network and consumer equipment and consumer acceptance of the
products and services to be offered, and the risk that the use
of internet search engines by our 3G customers will be
restricted;

-- the risks associated with technological requirements,
technology substitution and changes and other technological
developments;

-- the impact of existing and new competitors in the market in
which we compete, including competitors that may offer less
expensive products and services, desirable or innovative
products, technological substitutes, or have extensive
resources or better financing;

-- regulatory developments related to the implementation of
number portability;

-- fluctuations in foreign exchange rates;

-- the possibility of the market in which we compete being
impacted by changes in political, economic or other factors,
such as monetary policy, legal and regulatory changes or other
external factors over which we have no control;

-- the availability and cost of capital and the consequences of
increased leverage; and

-- the results of litigation filed or that may be filed against
us,

as well as the risks discussed in Risk Factors, Information on the
Company and Operating and Financial Review and Prospects in form 20-F
filed with the SEC on May 18, 2006. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in
this report might not occur.

We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

The financial results presented in this press release are
preliminary un-audited financial results.

The results were prepared in accordance with U.S. GAAP, other than
EBITDA which is a non-GAAP financial measure

The convenience translations of the Nominal New Israeli Shekel
(NIS) figures into US Dollars were made at the rate of exchange
prevailing at March 31st, 2007: US $1.00 equals NIS 4.155. The
translations were made purely for the convenience of the reader.

Use of Non-GAAP Financial Measure:

Earnings before interest, taxes, depreciation, amortization,
exceptional items and capitalization of intangible assets ('EBITDA')
is presented because it is a measure commonly used in the
telecommunications industry and is presented solely in order to
improve the understanding of the Company's operating results and to
provide further perspective on these results. Our management uses
EBITDA as a basis for measuring our core operating performance and
comparing such performance to that of prior periods and to the
performance of our competitors. EBITDA, however, should not be
considered as an alternative to operating income or net income for the
year as an indicator of the operating performance of the Company.
Similarly, EBITDA should not be considered as an alternative to cash
flows from operating activities as a measure of liquidity. EBITDA is
not a measure of financial performance under generally accepted
accounting principles and may not be comparable to other similarly
titled measures for other companies. EBITDA may not be indicative of
the historic operating results of the Company; nor is it meant to be
predictive of potential future results.

Reconciliation between our net cash flow from operating activities
and EBIDTA is presented in the attached summary financial results.

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*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS

Convenience translation
New Israeli shekels into U.S. dollars
------------------------ ------------------------
March December March December
31, 31, 31, 31,
2007 2006 2007 2006
----------- ------------ ----------- ------------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- ------------ ----------- ------------
In thousands
-------------------------------------------------
Assets
CURRENT ASSETS:
Cash and cash
equivalents 261,017 77,547 62,820 18,664
Accounts
receivable:
Trade 973,172 964,309 234,217 232,084
Other 71,923 65,533 17,310 15,772
Inventories 130,401 126,466 31,384 30,437
Deferred income
taxes 43,074 40,495 10,367 9,746
----------- ------------ ----------- ------------
Total current
assets 1,479,587 1,274,350 356,098 306,703
----------- ------------ ----------- ------------
INVESTMENTS AND
LONG-TERM
RECEIVABLES:
Accounts
receivable -
trade 313,095 274,608 75,354 66,091
Funds in respect
of employee
rights upon
retirement 83,200 80,881 20,024 19,466
----------- ------------ ----------- ------------
396,295 355,489 95,378 85,557
----------- ------------ ----------- ------------
FIXED ASSETS, net of
accumulated
depreciation and
amortization 1,711,542 1,747,459 411,923 420,567
LICENSE, DEFERRED
CHARGES AND OTHER
INTANGIBLE ASSETS,
net of accumulated
amortization 1,224,164 1,247,084 294,624 300,141
DEFERRED INCOME
TAXES 75,678 76,139 18,214 18,325
----------- ------------ ----------- ------------
Total assets 4,887,266 4,700,521 1,176,237 1,131,293
=========== ============ =========== ============
*T

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*T
Convenience translation
New Israeli shekels into U.S. dollars
------------------------ ------------------------
March December March December
31, 31, 31, 31,
2007 2006 2007 2006
----------- ------------ ----------- ------------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- ------------ ----------- ------------
In thousands
-------------------------------------------------
Liabilities and
shareholders'
equity
CURRENT LIABILITIES:
Current maturities
of long-term
liabilities 44,034 40,184 10,598 9,671
Accounts payable
and accruals:
Trade 768,779 690,424 185,024 166,167
Other 256,207 281,403 61,662 67,726
Parent group -
trade 15,067 15,830 3,626 3,810
Dividend payable 101,043 24,318
----------- ------------ ----------- ------------
Total current
liabilities 1,185,130 1,027,841 285,228 247,374
----------- ------------ ----------- ------------
LONG-TERM
LIABILITIES:
Bank loans, net of
current
maturities 261,381 272,508 62,908 65,586
Notes payable 2,007,578 2,016,378 483,172 485,290
Liability for
employee rights
upon retirement 115,932 113,380 27,902 27,288
Other liabilities 18,947 15,947 4,560 3,837
----------- ------------ ----------- ------------
Total long-
term
liabilities 2,403,838 2,418,213 578,542 582,001
----------- ------------ ----------- ------------
COMMITMENTS AND
CONTINGENT
LIABILITIES
----------- ------------ ----------- ------------
Total
liabilities 3,588,968 3,446,054 863,770 829,375
----------- ------------ ----------- ------------
SHAREHOLDERS'
EQUITY:
Share capital -
ordinary shares
of NIS 0.01 par
value: authorized
- December 31,
2006 and March
2007 -
235,000,000
shares; issued
and outstanding -
December 31, 2006
- 154,516,217
shares and March
31, 2007 -
156,187,677
shares 1,562 1,545 376 372
Capital surplus 2,500,383 2,452,682 601,777 590,297
Accumulated
deficit (1,203,647) (1,199,760) (289,686) (288,751)
----------- ------------ ----------- ------------
Total
shareholders'
equity 1,298,298 1,254,467 312,467 301,918
----------- ------------ ----------- ------------
4,887,266 4,700,521 1,176,237 1,131,293
=========== ============ =========== ============
*T

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*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Convenience
translation
into
New Israeli shekels U.S. dollars
-------------------------- ----------------
3 month period
3 month period ended ended
March 31, March 31,
-------------------------- ----------------
2007 2006 2007
------------- ------------ ----------------
(Unaudited)
-------------------------------------------
In thousands (except per share data)
-------------------------------------------
REVENUES - net:
Services 1,258,315 1,184,208 302,844
Equipment 159,469 142,436 38,380
------------- ------------ ----------------
1,417,784 1,326,644 341,224
COST OF REVENUES:
Services 758,445 744,749 182,537
Equipment 213,370 207,428 51,353
------------- ------------ ----------------
971,815 952,177 233,890
------------- ------------ ----------------
GROSS PROFIT 445,969 374,467 107,334
SELLING AND MARKETING
EXPENSES 93,539 57,250 22,512
GENERAL AND ADMINISTRATIVE
EXPENSES 51,329 43,682 12,354
------------- ------------ ----------------
144,868 100,932 34,866
------------- ------------ ----------------
OPERATING PROFIT 301,101 273,535 72,468
FINANCIAL EXPENSES, net 19,618 38,629 4,722
------------- ------------ ----------------
INCOME BEFORE TAXES ON
INCOME 281,483 234,906 67,746
TAXES ON INCOME 85,634 75,501 20,610
------------- ------------ ----------------
INCOME BEFORE CUMULATIVE
EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLES 195,849 159,405 47,136
CUMULATIVE EFFECT, AT
BEGINNING OF YEAR, OF A
CHANGE IN ACCOUNTING
PRINCIPLES 1,012
------------- ------------ ----------------
NET INCOME FOR THE YEAR 195,849 160,417 47,136
============= ============ ================
EARNINGS PER SHARE
("EPS"):
Basic:
Before cumulative
effect 1.26 1.04 0.30
Cumulative effect 0.01
------------- ------------ ----------------
1.26 1.05 0.30
============= ============ ================
Diluted:
Before cumulative
effect 1.25 1.04 0.30
Cumulative effect 0.01
------------- ------------ ----------------
1.25 1.05 0.30
============= ============ ================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic 155,573,108 152,818,983 155,573,108
============= ============ ================
Diluted 156,881,429 153,409,410 156,881,429
============= ============ ================
*T

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*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Convenience
translation
into
New Israeli shekels U.S. dollars
--------------------- ---------------
3 month period
3 month period ended ended
March 31, March 31,
--------------------- ---------------
2007 2006 2007
----------- --------- ---------------
(Unaudited)
-------------------------------------
In thousands (except per share data)
-------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income for the period 195,849 160,417 47,136
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 151,092 161,435 36,364
Amortization of deferred
compensation related to
employee stock option
grants, net 4,826 6,621 1,161
Liability for employee
rights upon retirement 2,552 2,610 614
Accrued interest and
exchange and linkage
differences on long-term
liabilities (9,348) 2,805 (2,250)
Deferred income taxes (2,118) 29,665 (510)
Capital loss on sale of
fixed assets 964 232
Cumulative effect, at
beginning of year, of a
change in accounting
principles (1,012)
Changes in operating assets
and liabilities:
Increase in accounts
receivable:
Trade (47,350) (78,038) (11,394)
Other (8,568) (10,354) (2,062)
Increase (decrease) in
accounts payable and
accruals:
Related parties (763) 196 (184)
Trade 126,468 (122,056) 30,437
Other (25,196) (47,782) (6,064)
Decrease (increase) in
inventories (3,935) 57,201 (947)
Increase in asset retirement
obligations 114 682 27
----------- --------- ---------------
Net cash provided by operating
activities 384,587 162,390 92,560
----------- --------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets (140,462) (92,500) (33,806)
Purchase of license (700) (168)
Funds in respect of employee
rights upon retirement (2,319) (1,485) (558)
----------- --------- ---------------
Net cash used in investing
activities (143,481) (93,985) (34,532)
----------- --------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from exercise of
stock options granted to
employees 42,892 8,964 10,323
Dividend paid (98,693) (11,086) (23,753)
Repayment of capital lease (2,250) (1,221) (542)
Windfall tax benefit in
respect of exercise of
options granted to employees 2,178 524
Capital lease received 7,416 1,785
Repayment of long term bank
loans (9,179) (59,953) (2,209)
----------- --------- ---------------
Net cash used in financing
activities (57,636) (63,296) (13,872)
----------- --------- ---------------
INCREASE IN CASH AND CASH
EQUIVALENTS 183,470 5,109 44,156
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 77,547 4,008 18,664
----------- --------- ---------------
CASH AND CASH EQUIVALENTS AT END
OF YEAR 261,017 9,117 62,820
=========== ========= ===============
*T

At March 31, 2007, trade payables include NIS 154 million ($ 37
million) (unaudited) in respect of acquisition of fixed assets.

At March 31, 2007, dividend payable of approximately NIS 101
million ($ 24 million) (unaudited) is outstanding.

These balances are recognized in the cash flow statements upon
payment.

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*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
RECONCILIATION BETWEEN OPERATING CASH FLOWS AND EBITDA

Convenience
translation
into
New Israeli shekels U.S. dollars
-------------------- -------------
3 Month
Period
3 Month Period Ended Ended
March 31, March 31,
-------------------- -------------
2007 2006 2007
---------- --------- -------------
(Unaudited)
----------------------------------
In thousands
----------------------------------
Net cash provided by operating
activities 384,587 162,390 92,560

Liability for employee rights upon
retirement (2,552) (2,610) (614)
Accrued interest and exchange and
linkage differences on long-term
liabilities 9,348 (2,805) 2,250
Increase in accounts receivable:
Trade 47,350 78,038 11,396
Other (excluding tax provision) 96,220 56,190 23,158
Decrease (increase) in accounts
payable and accruals:
Trade (126,468) 122,056 (30,438)
Shareholder - current account 763 (196) 184
Other 25,196 47,782 6,064
Decrease in inventories 3,935 (57,201) 947
Decrease in Assets Retirement
Obligation (114) (682) (27)
Financial Expenses 16,637 35,607 4,004
---------- --------- -------------
EBITDA 454,902 438,569 109,484
---------- --------- -------------
*T

* The convenience translation of the New Israeli Shekel (NIS)
figures into US dollars was made at the exchange prevailing at March
31, 2007 : US $1.00 equals 4.155 NIS.

** Financial expenses excluding any charge for the amortization of
pre-launch financial costs.

-0-
*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)

New Israeli shekels
------------------------------------------------------
3 month period ended
------------------------------------------------------
March June September December March
31, 30, 30, 31, 31,
2006 2006 2006 2006 2007
---------- ---------- ---------- ---------- ----------
(Unaudited)
------------------------------------------------------
In thousands
------------------------------------------------------
Revenues - net 1,326,644 1,372,945 1,461,989 1,445,133 1,417,784
Cost of
Revenues 952,177 941,914 1,004,637 998,539 971,815
---------- ---------- ---------- ---------- ----------
Gross Profit 374,467 431,031 457,352 446,594 445,969
Selling and
Marketing
Expenses 57,250 75,579 84,124 90,639 93,539
General and
Administrative
Expenses 43,682 43,963 53,717 42,098 51,329
---------- ---------- ---------- ---------- ----------
100,932 119,542 137,841 132,737 144,868
---------- ---------- ---------- ---------- ----------
Operating
Profit 273,535 311,489 319,511 313,857 301,101
Financial
Expenses - net 38,629 61,176 44,710 21,927 19,618
---------- ---------- ---------- ---------- ----------
Income Before
Taxes on
Income 234,906 250,313 274,801 291,930 281,483
Taxes on Income 75,501 76,076 90,148 128,950 85,634
---------- ---------- ---------- ---------- ----------
Income Before
Cumulative
Effect of a
Change in
Accounting
Principles 159,405 174,237 184, 653 162,980 195,849
Cumulative
Effect, at the
Beginning of
the Year, of a
Change in
Accounting
Principles 1,012
Net Income for
the Period 160,417 174,237 184,653 162,980 195,849
========== ========== ========== ========== ==========
*T

-0-
*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
SUMMARY OPERATING DATA

----------------------------------------------------------------------
Q1 2006 Q1 2007
----------------------------------------------------------------------
Subscribers (in thousands) 2,560 2,703
----------------------------------------------------------------------
Estimated share of total Israeli mobile telephone
subscribers 32% 32%
----------------------------------------------------------------------
Churn rate in quarter 4.2% 4.4%
----------------------------------------------------------------------
Average monthly usage in quarter per subscriber
(minutes) 301 323
----------------------------------------------------------------------
Average monthly revenue in year per subscriber,
including in-roaming revenue (NIS) 152 153
----------------------------------------------------------------------
*T