PalTel Announces Financial Results for FY-2010 & Recommends to Distribute Dividends of 35% of a Share's par Value

RAMALLAH, Palestine, February 17, 2011 - Steady Growth and positive returns usher in outlook for 2011:

    - 21.42% growth in Total Number of Subscribers (Fixed, Mobile, Data)
    - 7.88% growth in Net Revenues to reach US $479m
    - 6.08% growth in EBITDA to reach US $202m
    - 7.09% growth in Operating Income (EBIT) to reach US $158m
    - 22.75% increase in Net Income to reach US $122m
    - 22.75% increase in EPS to reach US $0.93
    - 3.76% increase in Total Assets to reach US $778m
    - 11.44% increase in Shareholders Equity to reach US $552m

FY-2010 Results

Sabih Al Masri, Chairman of the Palestine Telecommunications Company,
PalTel announced the financial results for the full year 2010 after a board
of directors meeting held in the first week of February, 2011 to review the
year-end financial results of the company, during which the Board recommended
to the General Assembly to be held on March 31st and to distribute dividends
of 35% of a share's par value. Net profit of the Group for the 2010 year
reached US$ 122m up by 22.75% from the previous year. Masri stated that "the
Group's ability to achieve such remarkable results is due to the continued
growth in all operational indicators, especially in terms of the number of
subscribers and improvement in services being offered." Masri also added that
"the restructuring of Paltel Group companies created new strategic directions
which led to a re-focus on core business operations in the fixed, mobile and
data services. In turn, the implementation of a new operational focus
resulted in the steady growth of revenues and profits across all companies as
a result of the Group's ability to adapt and adjust to evident market
changes."

Ammar Aker, CEO of the Paltel Group added that "the positive
financial results for 2010 is due to the successful implementation of the
strategic direction approved by the board at the outset of 2010 and is a
result of the company's settlement of some non recurring expenses for license
fees and reconciliation of portfolio investment losses carried over from
previous years. We are able to claim in 2011 that we are a healthy operation,
looking forward to continue our focus on growing our core services."

Consolidated net operating revenues grew 7.88% to reach US$
479 million at the end of FY-2010 compared with US$ 444m at the end of
FY-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 10.04%,
9.07%, 9.52% and 13.60% respectively.

The consolidated operating income for the company reached US$
158 million by the end of FY-2010 compared with US$ 147 by the end of
FY-2009, a growth of 7.09%. 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 increased by 22.75% to stand at
US$ 122m at the end of FY-2010 compared with US$ 99m at the end of FY-2009.
The increase is attributed to the increase in operating income, decline in
investment losses by 40.28% and the decline in other non-recurring expenses
by 32.66%; non recurring expenses are mainly related to the financial
settlement which was signed during 2010 between Paltel Group and the
Palestinian National Authority.

Current Operating Performance

Subscribers

Mobile and ADSL subscribers grew by 26.58% and 16.12%,
respectively reaching a customer base of 2.26mn and 107,389 compared with
1.80mn and 92,483 as of the end of FY-2009. The number of fixed line
subscribers witnessed 2.08% decline rate to stand at 362,792 subscribers
compared with 370,483 as of the end of FY-2009. This decline was a result of
the new disconnection policy for inactive lines.

Future Outlook

The company expects to achieve further growth by continuing to
benefit from a sustained push for governmental reform in the
telecommunication sector. The company will continue to place significant
investment in the Group's network in ensuring that all core areas-Mobile,
Fixed Line and Data services will expand to underserved areas in order to
ensure that every Palestinian community is connected while improving customer
care and offering added value services.

    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