Palestine Telecommunications (PalTel) Announces Financial Results for Q3-2010

RAMALLAH, Palestine, November 1, 2010 -

    - 25.98% growth in Total Number of Subscribers (Fixed, Mobile, Data)

    - 8.84% growth in Net Revenues to reach US $356m

    - 11.57% growth in EBITDA to reach US $153m

    - 15.80% growth in Operating Income (EBIT) to reach US $121m

    - 9.61% decrease in Net Income to reach US $92m due to exceptional items

    - 9.61% decrease in EPS to reach US $0.70

    - 3.18% increase in Total Assets to reach US $773m

    - 5.46% increase in Shareholders Equity to reach US $522m

Q3-2010 Results

Mr. Ammar Aker, the CEO of the Palestine Telecommunications
Company, PalTel announced the financial results for the third quarter of 2010
during a brokers meeting held on October 31, 2010 at Paltel Group
headquarters in Ramallah. Mr. Aker stated that "the Group continues to
achieve financial growth due to new strategies in place while closely working
with the Ministry of Telecommunications and Information Technology (MTIT) to
further the development of the telecommunications sector by promoting
competition and serving the Palestinian community to provide optimal services
for all its customers." Mr. Aker also added that "the restructuring of Paltel
Group has allowed our companies to re-focus on core business initiatives and
meet the daily challenges of implementing new strategies in respective
operations in mobile, fixed and data services. All of this effort has already
resulted in a positive impact in terms of growth in subscriber base and the
related impact on operational revenue.

Consolidated net operating revenues grew 8.84% to reach US$
356 million at the end of Q3-2010 compared with US$ 327m at the end of
Q3-2009. In regards to the operating revenues of each segment, the company
achieved a growth in its Fixed Line, Mobile, Data and IT revenues by 12.50%,
11.42%, 2.15% and 19.14% respectively, while media revenues declined by
35.15%.

The consolidated operating income for the company reached US$
121 million by the end of Q3-2010 compared with US$ 104m by the end of
Q3-2009, a growth of 15.80%. This growth was achieved by an increase in
consolidated revenues and in light of the new operating policy of focusing
operational efforts on core telecom functions and outsourcing support
functions.

The consolidated net income decreased by 9.61% to stand at US$
92m at the end of Q3-2010 compared with US$ 102m at the end of Q3-2009. This
decline is attributable to the investment losses mainly caused from the
company's share in VTEL offshore operations. The consolidated net income was
also affected by other expenses that increased to reach US$ 10.9m compared
with revenues of US$ 7.9m at the end of Q3-2009. This was a result of the
final payment made to the Palestinian National Authority according to a
financial settlement signed in the third quarter between the two parties.

Current Operating Performance

Subscribers

As of the end of Q3-2010, the number of fixed line subscribers
grew by 11.02% to reach 405,947 compared with 365,640 during the same period
of last year. Mobile and ADSL subscribers grew by 29.73% and 17.82%,
respectively, reaching a customer base of 2.135mn and 102,429 compared with
1.646mn and 86,935 as of the end of Q3-2009.

Future Outlook

The company expects to achieve a promising end of year results
based on all operational indicators and settlement reduction of non recurring
provisions. Due to low penetration rates for all telecom services in the
Palestinian market, the company will continue to grow its customer base in
Mobile, Fixed Line and Data services while improving customer care for
customer retention via offering added value services.

About Paltel

Palestinian Telecommunication Company PSC ("Paltel") is an integrated
telecom operator offering fixed, mobile, Internet and data services
throughout The Palestinian Territories. Paltel is publicly listed on the
Palestinian Exchange (PEX). In addition to the fixed line operations, Paltel
fully owns Jawwal (Mobile Operator), Reach (Call Center), Palmedia
(Information and Media Services Provider), Hulul (Business Solutions
Provider) and Hadara (ISP Services). Paltel also owns a 25% stake in Vtel
Holdings a Dubai-based multinational telecommunications company with
interests in Middle East, Asia and Europe. For more information, please visit
www.paltelgroup.ps

    Contact Person

    Ms. Neda Morrar
    Director of International Corporate Communications
    Paltel Group
    Tel: +970-2-294-4006
    Mob: +970-599-579-355
    neda.morrar@paltelgroup.ps

Contact Person: Ms. Neda Morrar, Director of International Corporate Communications, Paltel Group, Tel: +970-2-294-4006, Mob: +970-599-579-355, neda.morrar at paltelgroup.ps