• SUBSCRIBER BASE INCREASES BY 41,000 IN Q2 2009
• Q2 2009 EBITDA¹ MARGIN² OF 37.9%
• DIVIDEND OF NIS 1.49 PER SHARE FOR THE SECOND QUARTER OF 2009

Partner Communications Company Ltd. (NASDAQ:PTNR)(TASE:PTNR):

Q2 2009 Highlights (compared with Q2 2008) ³

• Total Revenues: NIS 1,514 million (US$ 386 million), a decrease of 1.6%
• Service Revenues: NIS 1,360 million (US$ 347 million), a decrease of 0.7%
• Operating Profit: NIS 434 million (US$ 110 million), a decrease of 2.9%
• Net Income: NIS 288 million (US$ 73 million), an increase of 2.1%
• EBITDA: NIS 574 million (US$ 146 million), an increase of 1.8%
• EBITDA¹ Margin²: 37.9% of total revenues compared with 36.6%
• Free Cash Flow⁴: NIS 233 million (US$ 59 million), a decrease of 62.6%
• Subscriber Base: 41,000 net additions in the quarter, to reach 2.944 million, including 1.102 million 3G subscribers
• Dividend Declared: NIS 1.49 (38 US cents) per share or ADS (in total approximately NIS 230 million or US$ 59 million) for Q2 2009

Partner Communications Company Ltd. ("Partner" or the "Company") (NASDAQ:PTNR)(TASE:PTNR), a leading Israeli mobile communications operator, today announced its results for the second quarter of 2009. Partner reported total revenues of NIS 1.5 billion (US$ 386 million) in Q2 2009, EBITDA of NIS 574 million (US$ 146 million), and net income of NIS 288 million (US$ 73 million).

Commenting on the quarter's results, Partner’s CEO, Mr. David Avner, said:

"I am very satisfied with our operational and financial performance, which demonstrates our focus on the realization of the Company's short-term objectives and long-term strategy. This quarter, we have recruited 41,000 new subscribers, a very strong achievement and the direct result of our continuous efforts to improve our distribution channels in the private sector, our service quality and strengthen our relationship with our customers."

"As part of our strategy to put customers at the center of attention, Partner strives to continuously launch new initiatives that will improve service experience. Towards the end of the first quarter, we completed most of the implementation of our new company-owned contact centers across the country, and opened the most advanced, centralized, handset repair laboratory whose goal is to enhance subscriber satisfaction and increase productivity."

"Our efforts to invest in the relationship with our customers were rewarded this quarter with the appreciation of our customers as well as the many awards we were granted. Once again our brand "orange^TM" has been elected the leading telecom brand in Israel for the seventh consecutive year by Globes, the daily business newspaper. Among other prizes we received, are the best workplace in the telecommunications industry and the "gold brand" from the daily newspaper Yediot Ha'acharonot. These unprecedented records are mainly a result of Partner's focus on service quality. "

"Partner also continues to strengthen its position as a comprehensive telecommunication operator, making satisfying advancements in our new sectors of activities, ISP and fixed telephony. In these areas, as in our core cellular business, we aim to provide our customers with a unique user experience, offering innovative features and services for an unmatched value proposition. During the ramp-up period we also intend to integrate additional company-owned sales channels in order to leverage our broad interface with our customers. These activities are one of the foundations of the Company's future growth and a major opportunity to differentiate ourselves from competition. "

"I would like to conclude by mentioning the announcement made by our parent company, Hutchison Telecommunications International Limited in early July, regarding a possible sale of its indirect equity interests in Partner. In this connection, I take this opportunity to thank Partner's management for their focus on the business during this period."

Mr. Avner concluded: "We look at the future with confidence, as the strong assets built by the Company over the last decade will enable Partner to continue to grow and drive value to our shareholders in the years to come."

Financial Review

Net revenues in Q2 2009 were NIS 1,514 million (US$ 386 million), a decrease of 1.6% from NIS 1,539 million in Q2 2008.

Service revenues totaled NIS 1,360 million (US$ 347 million), a decrease of 0.7% from NIS 1,370 million in Q2 2008. The decrease primarily reflects the impact of the lower roaming activity, as well as lower voice revenues resulting from the reduction in the billing interval from 12 second intervals to single second intervals mandated by the Ministry of Communications from January 1, 2009 and competitive market conditions which continue to put downward pressure on the outgoing voice tariff. The negative impacts on revenues were partially offset by a growth in total network minutes reflecting the approximate 3.4% increase in the subscriber base and an increase in the weight of post-paid subscribers with higher than average levels of usage, as well as increases in content and data revenues and revenues from non-cellular services.

Revenues from content and data services excluding SMS totaled NIS 131 million (US$ 33 million) in Q2 2009 or 9.6% of service revenues, an increase of 13.9% compared with NIS 115 million or 8.4% of service revenues in Q2 2008 ⁵.

SMS services revenues in Q2 2009 were NIS 89 million (US$ 23 million), an increase of 14.1% compared with Q2 2008, and the equivalent of 6.5% of service revenues in Q2 2009, compared with 5.7% in Q2 2008.

Gross profit from services totaled NIS 583 million (US$ 149 million) in Q2 2009, representing a decrease of 5.4% from NIS 616 million in Q2 2008. The decrease reflects the lower service revenues, as well as a 3.1% increase in the cost of service revenues, reflecting the additional costs associated with the new fixed line services, and additional depreciation in the amount of approximately NIS 18 million resulting from capitalized handset sales costs from the beginning of 2009. The handset sales costs are capitalized over a period of 18 months from purchase. The increase in cost of service revenues was partially offset by lower roaming costs due to the fall in roaming activity.

Equipment revenues in Q2 2009 were NIS 154 million (US$ 39 million), a decrease of 8.9% from NIS 169 million in Q2 2008. The decrease in revenues reflects the capitalization of those handset sales subsidies where the conditions for capitalization under IFRS were met⁶, partially offset by an increase in the number of transactions and an increase in the revenue per transaction due to the higher proportion of 3G sales compared with 2G sales. Equipment revenues were reduced by approximately NIS 66 million due to the capitalization of handset sales subsidies in Q2 2009.

The gross profit from non-capitalized equipment sales in Q2 2009 was NIS 7 million (US$ 2 million), compared to a gross loss on equipment sales of NIS 24 million in Q2 2008. The movement to gross profit from equipment sales reflects the net impact of the capitalization of handset subsidies (handset revenues less handset costs) under IFRS in Q2 2009 in the amount of approximately NIS 53 million, partially offset by a larger number of transactions.

Total gross profit was NIS 590 million (US$ 150 million) in Q2 2009, representing a marginal decrease of 0.2% from NIS 592 million in Q2 2008.

Selling, marketing, general and administration expenses in Q2 2009 decreased by 1.2% compared with Q2 2008, from NIS 173 million to NIS 171 million (US$ 44 million). This largely reflects the net impact of the capitalization in Q2 2009 of sales commissions under IFRS in the amount of approximately NIS 5 million, partially offset by the additional costs related to the launching and operating of the new ISP and fixed telephony initiatives.

Overall, operating profit was NIS 434 million (US$ 110 million) in Q2 2009, compared with NIS 447 million in Q2 2008, a decrease of 2.9%. This mainly reflects the lower gross profit, as well as a decrease of 46.4% in other income derived from deferred interest income on handset payment installment plans from NIS 28 million in Q2 2008 to NIS 15 million in Q2 2009.

Quarterly EBITDA in Q2 2009 totaled NIS 574 million (US$ 146 million), the equivalent of 42.2% of service revenues and 37.9% of total revenues. This represents an increase of 1.8% compared with NIS 564 million or 41.2% of service revenues and 36.7% of total revenues in Q2 2008. Excluding the impact of capitalization of handset sales in Q2 2009 and other income, EBITDA less other income would have been NIS 501 million in Q2 2009, a decrease of 6.5% compared to NIS 536 million in Q2 2008. This decrease is mostly attributed to the impact of the ramp-up cost of our new ISP and fixed telephony initiatives in Q2 2009 in the amount of approximately NIS 25 million for the quarter and the reduction in roaming revenues.

Finance costs, net in Q2 2009 were NIS 48 million (US$ 12 million), a decrease of 14.3% compared with NIS 56 million in Q2 2008. The decrease primarily reflects lower linkage expenses to due the lower CPI level.

Q2 2009 net income totaled NIS 288 million (US$ 73 million), an increase of 2.1% from NIS 282 million in Q2 2008.

Basic earnings per share or ADS, was NIS 1.87 (48 US cents) in Q2 2009, based on the average number of shares outstanding during the quarter, an increase of 3.9% from NIS 1.80 in Q2 2008.

Funding and Investing Review

Cash flows generated from operating activities, net of cash flows used for investing activities totaled NIS 233 million (US$ 59 million) in Q2 2009, a decrease of 62.6% compared with NIS 623 million in Q2 2008. The decrease largely reflects the one-time effect in Q2 2008 of the introduction of the factoring of handset revenues which increased quarterly operating cash flow in the amount of approximately NIS 194 million, and initiatives that were taken to reduce the working capital and cash flow volatility.

In addition, cash flows used for investing activities increased by 33.8% from NIS 151 million to NIS 202 million. The increase in cash flows used for investing activities is a result of both of an increase in investments in fixed assets and the capitalization of handset sales costs under IFRS. Investments in tangible fixed assets increased on a cash flow basis by 19.8% from NIS 126 million in Q2 2008 to NIS 151 million in Q2 2009 reflecting additional investments in the new fixed line services and in our fiber optics network. The Company's guidance for the annual level of investment in tangible fixed assets remains unchanged. Cash flows used for the acquisition of intangible assets increased from NIS 5 million in Q2 2008 to NIS 63 million in Q2 2009 primarily as a result of the capitalization of handset sales costs under IFRS.

Dividend

The Board has approved the distribution of a dividend for Q2 2009 of NIS 1.49 (38 US cent) per share (in total approximately NIS 230 million or US$ 59 million) to shareholders and ADS holders of record on September 30, 2009. The dividend is expected to be paid on October 13, 2009. For the first half of 2009, the dividend declared totaled NIS 467 million, compared to NIS 395 million declared for the first half of 2008, representing an increase of approximately 18%. This increase is a result of the transition from US GAAP to IFRS.

Operational Review

In Q2 2009, the Company added approximately 41,000 net new subscribers to its subscriber base, to raise the active subscriber base to approximately 2,944,000 by quarter-end. The subscriber base includes approximately 2,174,000 postpaid subscribers (73.8% of the base) and 770,000 prepaid subscribers (26.2% of the base). The quarterly churn rate decreased in Q2 2009 to 3.9% from 4.4% in Q2 2008⁷.

Approximately 1,102,000 subscribers were subscribed to the 3G network. Total market share at the end of the quarter is estimated to be approximately 31.7%.

Average minutes of use per subscriber ("MOU") were 364 minutes in Q2 2009, compared with 368 minutes in Q1 2008. The decrease is driven by the effect of a special campaign in the first months of number portability that offered new and upgrading subscribers a significant number of free minutes for a period of 12 months. Excluding the impact of the free minutes, MOU would have increased in Q2 2009 by approximately 1% compared with Q1 2009, in line with previous expectations.

The average revenue per user ("ARPU") was NIS 151 (US$ 39) in Q2 2009, a decrease of approximately 3.8% from NIS 157 in Q2 2008⁸. The decrease primarily reflects lower roaming revenues, as well as the impact of lower voice revenues resulting from the reduction in the billing interval.

Other

As a response to a bid process initiated by Motorola Inc., the Company submitted on August 09, 2009 a preliminary non-binding indication of interest for the potential acquisition of 100% of the issued and outstanding share capital of MIRS Communications Ltd. ("MIRS"). MIRS is a cellular company which operates in Israel using the iDEN technology and whose market share is estimated at 4% to 5%.

Outlook and Guidance

Commenting on the Company's results, Mr. Emanuel Avner, Partner's Chief Financial Officer said: "The half-year results for 2009 are in line with the annual guidance we provided in the press release of February 23, 2009."

Mr. Emanuel Avner added: "Last week the Company filed a draft shelf prospectus with the Israeli Securities Authority. Subject to the publication of the shelf prospectus, delivery of a supplemental shelf offering report, and market conditions, the Company intends to issue new debt securities in the second half of 2009. The net proceeds from the issue of debt securities are expected to be used for general corporate purposes, which may include financing of our operating and investing activity, refinancing of outstanding debt and continued dividend distribution, subject to the decision of the Company's board of directors from time to time."

"In addition, the Company's bank credit facility is due to expire at the end of August 2009. The company is in negotiation with the banks to replace the old facility with a new short term committed credit facility which may be used from time to time to support its working capital.

"Looking ahead to the second half of the year, the launch of the Apple iPhone^TM in the coming months is likely to increase the Company's working capital due to the build-up of inventory and the sale of part of the handsets bundled together with airtime packages as opposed to separate payment for the handsets."

Conference Call Details

Partner Communications will hold a conference call to discuss the company’s first quarter results on Monday, August 10, 2009, at 17:00 Israel local time (10AM EDT). 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.orange.co.il/investor_site/.

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 August 17, 2009.

Forward-Looking Statements

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. 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, 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 about Partner, consumer habits and preferences in cellular telephone usage, trends in the Israeli telecommunications industry in general, the impact of current global economic conditions and possible regulatory and legal developments. For a description of some of the risks we face, see "Item 3D. Key Information - Risk Factors", "Item 4. - Information on the Company", "Item 5. - Operating and Financial Review and Prospects", "Item 8A. - Consolidated Financial Statements and Other Financial Information - Legal and Administrative Proceedings" and "Item 11. Quantitative and Qualitative Disclosures about Market Risk" in the form 20-F filed with the SEC on April 27, 2009. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur, and actual results may differ materially from the results anticipated. 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 IFRS, 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 June 30, 2009: US $1.00 equals NIS 3.919. The translations were made purely for the convenience of the reader.

Use of Non-GAAP Financial Measure:

Earnings before financial 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 to enhance the understanding of our operating results. EBITDA, however, should not be considered as an alternative to operating income or income for the year as an indicator of our operating performance. Similarly, EBITDA should not be considered as an alternative to cash flow 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 our historic operating results 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.

About Partner Communications

Partner Communications Company Ltd. ("Partner") is a leading Israeli provider of telecommunications operator (cellular, fixed-line telephony and Internet Services Provider) under the orange™ brand. The Company provides mobile communications services to 2.944 million subscribers in Israel (as of June 30, 2009). Partner’s ADSs are quoted on the NASDAQ Global Select Market™ and its shares are traded on the Tel Aviv Stock Exchange (NASDAQ and TASE: PTNR).

Partner is a subsidiary of Hutchison Telecommunications International Limited ("Hutchison Telecom"), a leading global provider of telecommunications services. Hutchison Telecom currently offers mobile and fixed line telecommunications services in Israel, and operates mobile telecommunications services in Thailand, Sri Lanka, Vietnam and Indonesia. It was the first provider of 3G mobile services in Israel and operates brands including “Hutch”, “3” and “orange”. Hutchison Telecom, a subsidiary of Hutchison Whampoa Limited, is a listed company with American Depositary Shares quoted on the New York Stock Exchange under the ticker "HTX" and shares listed on the Stock Exchange of Hong Kong under the stock code "2332". For more information about Hutchison Telecom, see www.htil.com.

For more information about Partner, see http://www.orange.co.il/investor_site/

At June 30, 2009 and 2008, trade payables include NIS 163 million ($42 million) (unaudited) and NIS 162 million (unaudited) in respect of acquisition of fixed assets, respectively.

These balances will be given recognition in these statements upon payment.

* The convenience translation of the New Israeli Shekel (NIS) figures into US dollars was made at the exchange prevailing at June 30, 2009 : US $1.00 equals 3.919 NIS.

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

APPENDIX: EFFECT OF TRANSITION TO IFRS:

An explanation of how the transition from US GAAP to IFRS has affected the Company’s financial position and financial performance is set out in the following tables and the notes that accompany the tables.

Exemptions from full retrospective application elected by the Company:

The following adjustments relate to the effect of the transition to reporting under IFRS, as issued by the International Accounting Standards Board, as do the explanations with respect to these adjustments and with respect to the exemptions that the Company has elected to apply upon the transition to the IFRS reporting regime. The adjustments are presented as follows:

¹ For definition of EBITDA measure, see “Use of Non-GAAP Financial Measures” below (p11)

² Equivalent to 42.2% of service revenues in Q2 2009, compared with 41.2% of service revenues in Q2 2008

³ On January 1, 2009, the Company adopted the International Financial Reporting Standards ("IFRS"), replacing the previous reporting standard of US GAAP. Comparative data for 2008 have been restated to retrospectively reflect the application of IFRS as from January 1, 2008. See further explanations in the press release of May 21, 2009.

⁴ Cash flows generated from operating activities, net of cash flows used for investing activities

⁵ Content and data revenues for Q2 2008 have been reclassified to conform to the current year presentation. The company does not consider the changes material.

⁶ Whilst the financial statements have been prepared on the basis of the application of IFRS as from January 1 2008, the capitalization of subscriber acquisition and retention costs (including relevant handset revenues) only began on January 1 2009, the first period in which the conditions for capitalization as described in the relevant accounting policy were fulfilled.

⁷ Adjusted following a restatement in Q3 2008 of approximately 10,000 subscribers effective from the end of Q2 2008.

⁸ See footnote 5 on page 4.

Partner Communications Company Ltd.
Mr. Emanuel Avner
Chief Financial Officer
Tel: +972-54-7814951
Fax: +972-54-7815961
E-mail: emanuel.avner@orange.co.il
or
Mr. Oded Degany
V. P. Corporate Development, Strategy and IR
Tel: +972-54-7814151
Fax: +972-54 -7814161
E-mail: oded.degany@orange.co.il