B Communications Reports Third Quarter 2011 Financial Results

-          Business Plan Continues to Progress Ahead of Schedule –

-          Another Stable Quarter For Bezeq –

Ramat Gan, Israel – November 10, 2011 – B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) today reported its financial results for the third quarter ended September 30, 2011.

Bezeq: Another Strong Quarter

The Bezeq Group reported another strong, stable quarter, delivering revenues of NIS 2.9 billion (US$ 781 million) and operating profit of NIS 944 million (US$ 254 million) for the period. Bezeq’s EBITDA for the third quarter of 2011 totaled NIS 1.3 billion (US$ 350 million), representing an EBITDA margin of 44.6%.

Continued Ahead-Of-Schedule Progress for the Company’s Financing Plan

On October 5, 2011, B Communications received a dividend from Bezeq totaling NIS 464 million (US$ 125 million). The dividend consisted of:

• A current dividend of NIS 308 million (US$ 83 million), representing the Company’s share of Bezeq’s net profit for the first half of 2011; and

• A special dividend of NIS 156 million (US$ 42 million), the second of six equal special dividends. As declared by Bezeq’s Board of Directors and approved by the Israeli Court, special dividends totaling approximately NIS 3 billion are to be paid with no interest or index adjustments on a semi-annual basis through 2013.  

The Company used this dividend for two purposes: (1) payment of NIS 238 million (US$ 64 million) of its current loan repayment commitment; and (2) pre-payment of an additional NIS 226 million (US$ 61 million) to banks, thereby reducing the size of the final “bullet” repayment that is due at November 2016, and saving related future interest expenses.

B Communications’ Cash Position

As of September 30, 2011, the Company’s cash and cash equivalents totaled NIS 385 million (US$ 104 million), its unconsolidated gross debt was NIS 4.81 billion (US$ 1.3 billion) and its net debt totaled NIS 3.96 billion (US$ 1.1 billion).  

B Communications’ Unconsolidated Balance Sheet Data*

* Does not include the balance sheet of Bezeq

B Communications’ Third Quarter Consolidated Financial Results

B Communications’ revenues for the third quarter were NIS 2,917 million (US$ 786 million), a decrease of 3.8% compared with NIS 3,033 million (US$ 817 million) reported in the third quarter of 2010. For both the current and the prior-year periods, B Communications’ revenues consisted entirely of its share of Bezeq’s revenues.

B Communications’ net loss attributable to the shareholders of the company, for the third quarter totaled NIS 31 million (US$ 9 million) compared with net income of NIS 42 million (US$ 11 million) in the third quarter of 2010. This net loss reflected the impact of two significant expenses:

• Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the third quarter of 2011, B Communications recorded NIS 348 million (US$ 94 million) in amortization expenses related to the Bezeq purchase price allocation (“Bezeq PPA”). B Communications is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization.  

Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements.

• Financial expenses: B Communications’ financial expenses for the third quarter totaled NIS 93 million (US$ 25 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 72 million (US$ 20 million), and expenses related to the Company’s debentures, which totaled NIS 12 million (US$ 3 million).

B Communications’ Unconsolidated Financial Results  

Comments of Management

Commenting on the results, Mr. Doron Turgeman, the recently-appointed CEO of B Communications, said, “During the third quarter, we continued to focus on the smooth execution of our accelerated loan repayment plan. To date, we have repaid approximately NIS 2 billion (US$ 539 million) of our total bank debt, including NIS 1,683 million (US$ 453 million) of principal and NIS 313 million (US$ 84 million) of interest and CPI-linkage expenses. In parallel, we continue to be very pleased with developments at Bezeq, and therefore feel favorably positioned to carry out our plans.”

Bezeq Group’s Q3 Financial Results

To provide further insight into its results, the Company has provided the following summary of the consolidated financial report of the Bezeq Group’s quarter ended September 30, 2011. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Revenues of the Bezeq Group in the third quarter of 2011 amounted to NIS 2.9 billion, a decrease of 3.8% compared with the third quarter of 2010. Revenues from Bezeq Fixed-line operations and from Pelephone were adversely affected by the reduction of mobile termination rates to the cellular networks commencing January 1, 2011. The decrease in revenues was partially offset by growth in Pelephone’s equipment sales revenues.

Operating profit of the Bezeq Group amounted to NIS 944 million in the third quarter of 2011, a decrease of 3.6% compared with the third quarter of 2010. EBITDA for the third quarter was NIS 1.30 billion (EBITDA margin of 44.6%), a decrease of 2.1% compared with the third quarter of 2010 (EBITDA margin of 43.8%). The decrease in these profitability indices is primarily due to the intensifying competition in the cellular market.

Net profit attributed to the shareholders of Bezeq in the third quarter of 2011 amounted to NIS 550 million, a decrease of 6.5% compared with the third quarter of 2010. The decrease is primarily attributable to a rise in finance expenses due to the increase in debt.

Since the beginning of the year, cash flows from operating activities decreased by 21.1% compared with the corresponding period and amounted to NIS 2.3 billion, mainly due to the sharp rise in sales of smartphones resulting in a significant increase in payment to suppliers while customer payments for these phones are made in 36 installments.

Gross investments (CAPEX) in the third quarter of 2011 amounted to NIS 437 million, an increase of 14.7% compared with the third quarter of 2010. The increase is primarily attributable to the investment by Bezeq International in a submarine cable. The CAPEX to sales ratio was 15% in the third quarter of 2011, compared with 12.6% in the corresponding quarter of 2010.

On September 30, 2011, the gross financial debt of the Bezeq Group was NIS 9.6 billion, compared with NIS 5.7 billion on September 30, 2010. The increase is due to the incurrence of NIS 4.7 billion of debt, of which NIS 2.7 billion was recorded in the third quarter of 2011. Conversely, NIS 0.8 million debt was repaid.

On September 30, 2011, the net financial debt of the Bezeq Group was NIS 6.0 billion, compared with NIS 4.3 billion on September 30, 2010. At the end of September 2011, the ratio of net debt to EBITDA of the Group was 1.24, compared with 0.91 at the end of September 2010.

Notes:

1. A.     Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of September 30, 2011 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of September 30, 2011 (NIS 3.712 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.  

B.     Use of non-IFRS Measurements: We and the Bezeq Group’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand the Bezeq Group’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. The Bezeq Group defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2, income tax expenses and depreciation and amortization. We present the Bezeq Group’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

Reconciliation between the Bezeq Group’s results on an IFRS and non-IFRS basis is provided in a table immediately following the Bezeq Group’s consolidated results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of the Bezeq Group’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. The Bezeq Group’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

About B Communications Ltd.

B Communications is a telecommunications-oriented holding company and its primary holding is its controlling interest in in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ). B Communications shares are traded on NASDAQ and the TASE under the symbol BCOM For more information, please visit the following Internet sites:

www.eurocom.co.il

www.igld.com

www.bcommunications.co.il

www.ir.bezeq.co.il

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’ filings with the Securities Exchange Commission.  These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

B Communications Ltd.

Consolidated Statement of Financial Position

B Communications Ltd.

Consolidated Statement of Financial Position (cont’d)

B Communications Ltd.

Consolidated Statements of Operations

(In millions, except share data)

Mr. Doron Turgeman, the company’s chief financial officer, was elected to succeed Mr. Holtzman as chief executive officer effective October 2, 2011.

Mr. Turgeman holds a B.A. degree in Economics and Accounting from the Hebrew University of Jerusalem and is a certified public accountant (Israel).

Mr. Shaul Elovitch, B Communication’s Chairman of The Board of Directors, speaking on behalf of the Board of Directors, thanked Mr. Holtzman for his significant contribution to the company.

Mr. Elovitch note, “We wish Mr. Holtzman well and much success in his future endeavors. He also said, “On behalf of our Board of Directors, I congratulate Mr. Turgeman on his appointment as chief executive officer. We believe that his managerial experience and deep knowledge of the company’s business and operations will allow him to assume his new responsibilities swiftly and cope successfully with the challenges the company is facing.”

Mr. Ehud Yahalom was elected as the company’s principal financial officer effective October 2, 2011. Mr. Yahalom joined the company during May 2011. Mr. Yahalom holds a B.A. degree in economics and accounting from the Haifa University, a M.B.A in business management and finance from the College of Management Academic Studies in Rishon LeZion and is a certified public accountant (Israel).

About B Communications

B Communications is a telecommunications-oriented holding company and its primary holding is its controlling interest in in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE: BZEQ). B Communications shares are traded on NASDAQ and the TASE under the symbol BCOM For more information, please visit the following Internet sites:

www.eurocom.co.il;

www.igld.com;

www.bcommunications.co.il;

www.ir.bezeq.co.il

Forward-Looking Statements

This communication contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

-          Bezeq Delivers Another Strong Quarter -

-          Bezeq’s Significant Regular and Special Dividends Continue to Boost BCOM’s Cash Position –

Ramat Gan, Israel – August 2, 2011 – B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) today reported its financial results for the quarter ended June 30, 2011 and its cash position and loan repayment status as of June 30, 2011.  

Bezeq Delivers Another Strong Quarter

The Bezeq Group reported another strong, stable quarter, delivering revenues of NIS 2.9 billion (US$ 849 million) and operating profit of NIS 935 million (US$ 274 million) in the second quarter. Bezeq’s EBITDA for the second quarter of 2011 totaled NIS 1.3 billion (US$ 381 million), representing an EBITDA margin of 44.35%, and cash flow from operating activities reached NIS 670 million (US$ 196 million).

Debt Repayment Plan Continues to Progress Ahead-of-Schedule

As of June 30, 2011, B Communications had exceeded its original plan for the repayment of the bank debt it incurred to fund its April 2010 acquisition of the controlling interest (approximately 30%) in Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”). From April 14, 2010 through June 30, 2011, B Communications repaid approximately NIS 1.5 billion (US$ 439 million) of its bank debt, including NIS 1,307 million (US$ 383 million) of principal and NIS 223 million (US$ 65 million) of interest and CPI-linked expenses.

Dividends Received from Bezeq

On May 19, 2011, B Communications received two dividends from Bezeq totaling NIS 520 million (US$ 152 million) that consisted of:

• Current dividend totaling NIS 363 million (US$ 106 million), representing B Communications’ share of Bezeq’s net profit for the second half of 2010; and

• Special dividend totaling NIS 157 million (US$ 46 million), the first of six equal special dividends to be paid with no interest or index adjustments on a semi-annual basis through 2013, totaling approximately NIS 3 billion (US$ 878 million) over a three year period, as declared by Bezeq’s Board of Directors and approved by the Israeli Court.  

B Communications’ Cash Position

As of June 30, 2011, B Communications’ unconsolidated cash and cash equivalents totaled NIS 394 million (US$ 115 million), and its unconsolidated gross debt was NIS 4.7 billion (US$ 1.4 billion). Having increased its ownership interest in Bezeq during the first quarter, B Communications now owns 31.23% of the outstanding shares of Bezeq.  

B Communications’ Unconsolidated Balance Sheet Data*

* Does not include the balance sheet of Bezeq.

B Communications’ Second Quarter Financial Results

B Communications’ revenues for the second quarter were NIS 2,893 million (US$ 847 million), an increase of 12.7% compared with NIS 2,566 million (US$ 751 million) reported in the second quarter of 2010. For both the current and the prior-year periods, B Communications’ revenues consisted entirely of its share of Bezeq’s revenues. However, for the second quarter of 2011, B Communications’ revenues included its share of Bezeq’s revenues for the entire quarter, while during the second quarter of 2010, B Communications began to consolidate its share of Bezeq’s revenues commencing April 14, 2010, the date of its acquisition of the controlling interest in Bezeq.

B Communications’ net loss for the second quarter totaled NIS 12 million (US$ 3 million) compared with a net loss of NIS 40 million (US$ 12 million) in the second quarter of 2010. This net loss reflected the impact of two significant expenses:

• Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the standards of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values. During the second quarter of 2011, B Communications recorded amortization expenses of NIS 310 million (US$ 91 million) related to the Bezeq purchase price allocation (“Bezeq PPA”). B Communications is amortizing certain of the acquired identifiable intangible assets in accordance with the future economic benefits expected from such assets using an accelerated method of amortization under which approximately 16% of the acquired identifiable intangible assets were amortized during 2010 and an additional 17% will be amortized during 2011.  

• Financial expenses: B Communications’ financial expenses for the second quarter totaled NIS 98 million (US$ 29 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 86 million (US$ 25 million), and expenses related to our debentures, which totaled NIS 14 million (US$ 4 million).

B Communications’ Unconsolidated Financial Results

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of B Communications, said, “The second quarter was another period of progress during which we continued to accelerate our debt repayment plan, due primarily to the significant current and special dividends that we received on May 19 from Bezeq. We are very pleased with developments at Bezeq, and continue to focus on the smooth execution of our loan repayment plan.”

Consolidation of Bezeq Results

• Bezeq results consolidated for entire second quarter of 2011: B Communications’ results for the second quarter of 2011 reflect the consolidation of the operations of Bezeq for the entire three-month period. However, B Communications’s results for the comparative period of 2010 include Bezeq’s results commencing April 14, 2010, the date of the acquisition. 

• Supplemental unconsolidated results table: To provide investors with transparent insight into its business, B Communications has also provided its results on an unconsolidated basis. B Communications’ interest in Bezeq’s net income is presented as a single line item in the unconsolidated table, (see above, “B Communications’ Unconsolidated Q2 Financial Results”).

Bezeq Group’s Q2 Financial Results

To provide further insight into its results, the we have provided the following summary of the Bezeq Group’s consolidated financial report for the quarter ended June 30, 2011. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Bezeq Group’s revenues for the second quarter of 2011 amounted to NIS 2.9 billion (US$ 849 million), a decrease of 3.0% compared to the second quarter of 2010. Bezeq Fixed-Line revenues and Pelephone revenues were negatively affected by the reduction in mobile termination rates that came into effect on January 1, 2011. The decrease in revenues was moderated by growth in Pelephone’s revenues from equipment sales and by the consolidation of Walla! (commencing April 25, 2010).

Bezeq Group’s operating profit in the second quarter of 2011 amounted to NIS 935 million (US$ 274 million), a decrease of 5.6% compared with the second quarter of 2010. Net profit attributable to the owners of Bezeq in the second quarter amounted to NIS 585 million (US$ 171 million), a decrease of 8.3% compared with the corresponding quarter. EBITDA for the second quarter amounted to NIS 1.28 billion (US$ 375 million) (EBITDA margin of 44.3%), a decrease of 4.1% compared with the corresponding quarter, (EBITDA margin of 44.9%). In the second quarter of 2010, a one-time gain of NIS 57 million (US$ 17 million) was recorded as a result of the consolidation of Walla’s operations by Bezeq International. After adjustment for the one-time gain, growth was recorded in each of the above parameters.

Cash flow from operating activities in the second quarter of 2011 was down 31.4% compared with the corresponding quarter in 2010, and amounted to NIS 670 million (US$ 196 million), mainly due to the sharp rise in sales of smartphones and the significant increase in supplier payments whereas subscriber payments for those handsets are made in 36 installments.

Gross investments (CAPEX) in the second quarter of 2011 amounted to NIS 495 million (US$ 145 million), an increase of 15.9% compared with the corresponding quarter in 2010. The increase stemmed, among other things, from the investment in a submarine cable by Bezeq International. The CAPEX to sales ratio was 17.1% in the second quarter of 2011, compared with 14.3% in the second quarter of 2010.

As a result of the decrease in cash flow from operating activities and the increase in CAPEX, free cash flow in the second quarter of 2011 amounted to NIS 264 million (US$ 77 million), compared with NIS 606 million (US$ 177 million) in the corresponding quarter in 2010, a decrease of 56.4%.

As of June 30, 2011, the net financial debt of the Bezeq Group was NIS 6.5 billion (US$ 1.9 billion), compared with NIS 5.0 billion (US$ 1.5 billion) on June 30, 2010. The increase was attributable to issuance of NIS 2.8 billion (US$ 820 million) of debt, of which NIS 2 billion (US$ 586 million) was issued in the second quarter of 2011. In contrast, NIS 1.4 billion (US$ 410 million) of debt was repaid. At the end of June 2011, the ratio of the Bezeq Group’s net debt to EBITDA was 1.33, compared with 1.07 at the end of June 2010. We note that an issue of NIS 2.7 billion (US$ 791 million) of debentures at the end of June 2011 is not included in the Group’s balance sheet since the consideration was received after the balance sheet date.

¹ Bezeq Group results reflect the consolidation of Walla! as of April 25, 2010.

² Capex data reflects payments related to capex and are based on the cash flow statements.

³ Free cash flow is defined as cash flow from operating activities less net capex payments.

⁴ EBITDA in this calculation refers to the trailing twelve months.

Notes:

1. A.     Convenience Translation to Dollars: For the convenience of the reader, certain of the reported NIS figures of June 30, 2011 and for the periods than ended, and for the comparative periods have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of June 30, 2011 (NIS 3.415 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

B.     Use of non-IFRS Measurements: We and Bezeq’s management regularly internally use supplemental non-IFRS financial measures to understand, manage and evaluate our business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS 2, income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 31.23%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 78.11%-owned) (NASDAQ Global Select Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il    

http://igld.com

www.bcommunications.co.il/   

www.ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Cohen – IR Manager

idit@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

B. Communications Ltd.

Consolidated Statement of Financial Position

B. Communications Ltd.

Consolidated Statement of Financial Position (cont’d)

B. Communications Ltd.

Consolidated Statements of Operations

(In millions, except share data)

-         Holdings in Bezeq Increased –

-         Continued Ahead-of-Schedule Progress in Repayment of Debt –

Ramat Gan, Israel – May 12, 2011 – B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) today reported its financial results for the first quarter of 2011 and its cash position and loan repayment status as of March 31, 2011.

Progress in B Communications’ Loan Repayment Plan

As of March 31, 2011, B Communications had exceeded its original plan for repaying the debt it incurred to fund its April 2010 acquisition of the controlling interest (approximately 30%) in Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”). From April 14, 2010 through March 31, 2011, the Company repaid NIS 892 million (US$ 256 million) of principal and paid NIS 143 million (US$ 41 million) in interest and CPI-linked expenses. During the second quarter of 2011, the Company intends to repay an additional NIS 520 million (US$ 149 million) of its debt.

Dividends to be received from Bezeq

On May 19, 2011, B Communications expects to receive a dividend from Bezeq totaling NIS 520 million (US$ 149 million). This amount consists of:

• A current dividend totaling NIS 364 million (US$ 104 million), representing the Company’s share of Bezeq’s dividend distribution for the second half of 2010. Bezeq has adopted a dividend distribution policy according to which Bezeq will distribute to its shareholders, semiannually, a dividend equal to 100% of its semiannual net income attributable to the shareholders.  Since the dividend was announced after the report date, it does not appear on the Company’s financial reports as of March 31, 2011.

• A special dividend totaling NIS 156 million (US$ 45 million) that was declared by Bezeq’s Board of Directors and approved by the Israeli Court. This amount is the first of six equal semi-annual payments to be paid without interest or index adjustments during the years 2011-2013. To the extent possible, each payment will be scheduled to coincide with the payment of the expected regular dividend. The Company is capitalizing these payments on its balance sheet at their present value. In the Company’s unconsolidated balance sheet as of March 31, 2011, the first two special dividend payments totaling NIS 308 million (US$ 89 million) are recorded as accounts receivable – short term, and the remaining four payments totaling NIS 573 million (US$ 164 million) are recorded as accounts receivable – long term.

The Company intends to use the May 19, 2011 dividend payments for two purposes:

1) A payment of NIS 235 million (US$ 68 million) towards the Company’s current loan repayment commitment.

2) Pre-payment of an additional NIS 283 million (US$ 81 million) to creditors, thereby reducing the amount of the remaining bank indebtedness, which will reduce future interest expenses.

Increase of BCOM’s Stake in Bezeq

During the first quarter of 2011, the Company purchased 29,662,168 of Bezeq’s outstanding ordinary shares on the Tel Aviv Stock Exchange. These purchases increased B Communications’ ownership interest in Bezeq to approximately 31.37% of Bezeq’s outstanding shares as of March 12, 2011, at a cost of approximately NIS 300 million (US$ 86 million).

B Communications’ Unconsolidated Debt Position

As of March 31, 2011, the Company’s cash and cash equivalents totaled NIS 405 million (US$ 116 million) and its unconsolidated gross debt was NIS 5,150 million (US$ 1,479 million).

B Communications’ Unconsolidated Balance Sheet Data*

* Does not include the balance sheet of Bezeq.

B Communications’ First Quarter Financial Results

B Communications’ consolidated revenues for the first quarter of 2011 were NIS 2.9 billion (US$ 837 million) compared with no revenues reported in the first quarter of 2010. The Company’s revenues for the first quarter of 2011 consisted entirely of Bezeq’s revenues, as compared to the first quarter of 2010, a transitional period before the Company’s acquisition of Bezeq, which did not include revenues either of Bezeq or of the Company’s legacy communications business.

B Communications’ net loss attributable to the shareholders for the first quarter of 2011 totaled NIS 55 million (US$ 16 million) compared with a net income of NIS 25 million recorded in the first quarter of 2010. This net loss reflected the impact of three significant expenses:

• Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the first quarter of 2011, B Communications recorded NIS 88 million, net (US$ 25 million) of amortization expenses, representing the Company’s net share of the amortization expenses related to the aforementioned Bezeq purchase price allocation (“Bezeq PPA”). The Company is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization under which approximately 21% of the acquired identifiable intangible assets were amortized during 2010 and an additional 20% will be amortized during 2011.

Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements. (see Note B below).

• Financial expenses: B Communications’ unconsolidated financial expenses for the first quarter totaled NIS 93 million (US$ 27 million). These expenses consisted primarily of interest and linkage costs on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 75 million (US$ 22 million), and expenses related to the Company’s debentures, which totaled NIS 14 million (US$ 4 million).

• One-time expenses recorded by Bezeq: On January 24, 2011, Bezeq’s Board of Directors approved an Employee Early Retirement Plan under which a total of up to 260 employees will leave Bezeq at a total cost of up to NIS 285 million (US$ 82 million). The expenses associated with this program have been recorded in Bezeq’s and B Communications’ financial statements as “Other Expenses.”

B Communications’ Unconsolidated Financial Results

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of B Communications, said, “The first quarter was another excellent period for Bezeq, demonstrating the profit-generating power of its formidable position in Israel’s telecommunications market, strong management and growth strategy. Due to the special dividend, which we will receive by the end of next week, we intend to accelerate our repayment plan. At the same time, during the quarter we took advantage of our cash position and our firm belief in Bezeq’s potential to increase our stake, investing an additional NIS 300 million in Bezeq’s shares. This demonstrates our strong confidence in the long-term prospects of our primary investment.”

Consolidation of Bezeq Results

• Bezeq results consolidated for the entire first quarter of 2011: B Communications’ first quarter results reflect the full consolidation of the operations of Bezeq for the period. The comparison quarter of 2010 was a transitional period before the Bezeq acquisition (which was completed on April 14, 2010), and does not include results from either Bezeq or the Company’s legacy communications business.

• Supplemental unconsolidated results table: In order to provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. B Communications’ interest in Bezeq’s net income is presented as a single line item in the unconsolidated table (see above, “B Communications’ Unconsolidated Financial Results for the Three Months Ended March 31, 2011”).

Bezeq Group’s First Quarter 2011 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s consolidated financial report for the quarter ended March 31, 2011. When we refer to the “Bezeq Group” or the “Group” below we are referring to Bezeq- – The Israel Telecommunication Corp., Ltd. and its subsidiaries: “Bezeq Fixed-Line refers to Bezeq’s operation as a domestic operator, including fixed-line telephony services, Internet services, transmission services and data, “Pelephone” refers to Pelephone Communications Ltd., “Bezeq International” refers to Bezeq International Ltd., “DBS” or “YES” (the trade name for DBS) refers to DBS Satellite Service (1998) Ltd. and “Walla” refers to Walla!, a provider of internet services and  portal services.  For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

.

Bezeq Group (Consolidated) Results

Bezeq Group revenues for the first quarter of 2011 amounted to NIS 2.9 billion (US$ 837 million), similar to the prior year’s quarter. Bezeq Fixed-Line revenues and Pelephone revenues from cellular services were negatively affected by the MTR cut that came into effect on January 1, 2011. Conversely, the Bezeq Group recorded an increase in revenues due to growth in revenues from Pelephone’s terminal equipment and consolidation of the results of Walla (as from May 21, 2010).

First quarter 2011 operating profit, net profit, and EBITDA for the Group, as well as fixed line activity, was impacted by a NIS 285 million (US$ 82 million) provision for employee retirement.

Operating profit for the Group was NIS 665 million (US$ 191 million) in the first quarter of 2011, down 23.9% compared with the first quarter of 2010.

Net profit attributable to Bezeq shareholders in first quarter of 2011 was NIS 407 million (US$ 117 million), down 36.6% compared to the first quarter of 2010. EBITDA for the first quarter of 2011 was NIS 1 billion (US$ 287 million) (EBITDA margin of 34.3%), down NIS 217 million (US$ 62 million) compared to the first quarter of 2010 (EBITDA margin of 41.7%). Without retirement expenses, growth would have been recorded in all operational results.

Cash flow from operating activities in the first quarter of 2011 declined 3.8% compared to the first quarter of 2010, amounting to NIS 775 million (US$ 223 million), mainly due to changes in Pelephone’s working capital.

Gross capital expenditures in first quarter of 2011 amounted to NIS 503 million (US$ 144 million), an increase of 39.7% compared to the first quarter of 2010. This increase was mainly due to the ongoing rollout of NGN infrastructure in Bezeq’s fixed line segment. Bezeq’s first quarter 2011 consolidated capex-to-sales ratio was 17.3%, compared to 12.3% in the first quarter of 2010.

At March 31, 2011, the Bezeq Group’s consolidated net financial debt was NIS 4.9 billion (US$ 1.4 billion), compared to NIS 2.9 billion at March 31, 2010. The increase in the financial debt compared to March 31, 2010 was mainly due to new debt of NIS 2.6 billion (US$ 746 million) issued by Bezeq in the second and third quarters of 2010, partially offset by the repayment of loans and debentures by Bezeq and Pelephone. At the end March 2011, the Bezeq Group’s net debt-to-EBITDA ratio was 1.00, compared to 0.65 at the end of March 2010.

Notes:

1. A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures as of March 31, 2011 and for the period then ended, have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of March 31, 2011 (NIS 3.4810 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

1. B. Purchase Price Allocation (PPA): In connection with B Communications’ acquisition of the controlling interest in Bezeq, it has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements.

1. C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard of generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

1. D. NON-IFRS MEASUREMENTS: Reconciliation between Bezeq’s results on an IFRS and non-IFRS basis is provided in a table immediately following Bezeq Group’s Consolidated Results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

We and Bezeq’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies. Reconciliation between results on an IFRS and non-IFRS basis is provided in a table immediately following the Consolidated Statement of Operations.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with ASC 718-10 (formerly known as SFAS 123 (R)),  income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 31.24%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.78%-owned) (NASDAQ Global Select Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il

http://igld.com

www.bcommunications.co.il/

http://ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’ filings with the Securities Exchange Commission.  These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet

Ramat Gan, Israel – March 14, 2011 – B Communications Ltd. (NASDAQ: BCOM) announced today that it has notified its subsidiary, Bezeq – The Israel Telecommunication Corp. Ltd. (“Bezeq”), that today it purchased 14,590,000 of Bezeq’s outstanding ordinary shares on the Tel Aviv Stock Exchange. The purchases bring B Communications’ ownership interest in Bezeq to approximately 31.37% of its outstanding shares.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 31.37%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (NASDAQ Global Select Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il    

http://igld.com

www.bcommunications.co.il/   

http://ir.bezeq.co.il

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

-         BCOM’s Primary Asset, Bezeq, Delivers Another Strong Quarter
& Announces Ambitious Dividend Plan -

-         Debt Repayment Process Progressing Well Ahead of Schedule –

Ramat Gan, Israel – March 8, 2011 – B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) today reported its financial results for the fourth quarter and full year ended December 31, 2010 together with its cash position and loan repayment status as of December 31, 2010.

Progress in B Communications’ Loan Repayment Plan

As of December 31, 2010, B Communications exceeded its original plan for the repayment of the debt it incurred  to fund its April 2010 acquisition of the controlling interest (approximately 30%) in Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”). From April 14, 2010 through December 31, 2010, the Company repaid NIS 892 million (US$ 251 million) principal amount of debt.

B Communications’ Unconsolidated Cash Position

At December 31, 2010, the Company’s cash and cash equivalents totaled NIS 800 million (US$ 225 million) and its unconsolidated gross debt was NIS 5.2 billion (US$ 1.5 billion). This reflected the following events during 2010:

• Dividends from Bezeq: On October 7, 2010, B Communications received a dividend of NIS 389 million (US$ 110 million) from Bezeq.

Bezeq’s Board of Directors today announced its recommendation to distribute a cash dividend to shareholders of NIS 1.163 billion (US$ 328 million) with respect to its results for the second half of 2010, NIS 352 million (US$ 99 million) of which will be paid to B Communications. The dividend, which is subject to shareholder approval, would be payable on May 19, 2011. This is in addition to the approval of the General Shareholders at its meeting on January 24, of a capital distribution totaling NIS 3 billion (US$ 845 million) to be paid in six equal, semi-annual payments during 2011-2013. This proposed capital reduction plan, which is subject to court approval, would be in addition to Bezeq’s stated dividend policy of distributing 100% of its net profit attributable to shareholders on a semi-annual basis. In line with this strategy, in 2010 Bezeq paid in excess of NIS 3.7 billion (US$ 1.1 billion) in cash dividends to its shareholders for an effective dividend yield of 14.5%. The Company received a total of NIS 1.1 billion (US$ 320 million) in dividends from Bezeq in 2010.

• Lenders Exercise of phantom stock options issued in April 2010: During the fourth quarter of 2010, the banking and financial institutions which provided B Communications with the financing for  its acquisition of the controlling interest in Bezeq exercised all of the phantom stock options issued to them as part of the transaction. Under the exercise terms, B Communications is obligated to pay the lenders a total of NIS 124 million (US$ 35 million) in five equal annual installments beginning in May 2012. Under IFRS accounting principles, this liability was recorded at its present value as of December 31, 2010, increasing the Company’s financial debt by NIS 107 million (US$ 30 million).

• Successful placement of NIS 400 million in debentures: On September 21, 2010, B Communications issued NIS 400 million (US$ 113 million) of Series B debentures. These debentures carry a 6.5% fixed annual interest rate, are not linked to the Israeli CPI and are listed for trade on the Tel Aviv Stock Exchange. The repayment of the debentures will be made in four equal payments from 2016 to 2019.

B Communications’ Unconsolidated Balance Sheet Data*

* Does not include the balance sheet of Bezeq.

B Communications’ Fourth Quarter Financial Results

B Communications’ revenues for the fourth quarter were NIS 3.1 billion (US$ 862 million) compared with NIS 304 million reported in the fourth quarter of 2009. The Company’s revenues for the fourth quarter of 2010 consisted entirely of Bezeq’s revenues, while its fourth quarter 2009 revenues consisted of sales generated by the Company’s legacy 012 Smile telecom business. Revenues for the year ended December 31, 2010, which reflect the consolidation of Bezeq’s results from April 14, 2010, were NIS 8.7 billion (US$ 2.4 billion) compared with NIS 1.2 billion in 2009.

B Communications’ net loss for the fourth quarter totaled NIS 206 million (US$ 58 million) compared with net income of NIS 51 million recorded in the fourth quarter of 2009. B Communications’ net loss for year ended December 31, 2010 totaled NIS 180 million (US$ 51 million) compared with net income of NIS 147 million recorded in year ended December 31, 2009. These net losses reflected the impact of two significant expenses:

• Amortization of tangible and identifiable intangible assets resulting from the Bezeq acquisition: According to the rules of business combination accounting, the total purchase price of Bezeq was allocated to Bezeq’s tangible and identifiable intangible assets based on their estimated fair values as determined by an analysis performed by an independent valuation firm. During the fourth quarter of 2010, B Communications recorded NIS 267 million (US$ 75 million) in additional amortization expenses related to the aforementioned Bezeq purchase price allocation (“Bezeq PPA”), bringing the net total of its Bezeq PPA amortization expense for 2010 to NIS 359 million (US$ 101 million). The Company is amortizing certain of the acquired identifiable intangible assets in accordance with the economic benefit expected from such assets using an accelerated method of amortization under which approximately 40% of the acquired identifiable intangible assets will be amortized during 2010 and 2011.

Bezeq PPA amortization expense is a non-cash expense which is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to amounts already expensed, it may result in significant changes to future financial statements. (see Note B below).

• Financial expenses: B Communications’ financial expenses for the fourth quarter totaled NIS 92 million (US$ 26 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 73 million (US$ 20 million), and expenses related to the Company’s debentures, which totaled NIS 14 million (US$ 4 million).

B Communications’ Unconsolidated Financial Results

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of B Communications, said, “2010 was an outstanding year for B Communications. From a strategic point of view, the Bezeq acquisition, which we closed in April, transformed us from a niche ISP/ILD player into a very broad communications group, giving us control over Israel’s largest telco and clear leadership of the Israeli telecommunications market. From the financial point of view, we began executing our loan repayment plan, and are proud to have begun accelerating repayments already in the first year. We are delighted that the combination of these activities has created significant value for our shareholders. Moving forward, we continue to focus on the smooth execution of our loan repayment plan while seeking out avenues for future growth.”

Consolidation of Bezeq Results

• Bezeq results consolidated for entire fourth quarter of 2010: B Communications’ fourth quarter results reflect the full consolidation of the operations of Bezeq for the period, which acquisition was completed during the second quarter of 2010 (on April 14, 2010).

• Supplemental unconsolidated results table: To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. B Communications’ interest in Bezeq’s net income is presented as a single line item in the unconsolidated table, (see below, “B Communications’ Unconsolidated Q4 Financial Results” and “B Communications’ Unconsolidated 2010 Financial Results”).

• Adoption of IFRS: In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010 B Communications adopted the financial reporting standards utilized by Bezeq, the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP) (see note C below).

Bezeq Group’s Q4 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s quarter and year ended December 31, 2010  consolidated financial report. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il.

Bezeq Group’s Consolidated Results

Bezeq Group revenues for 2010 totaled a record NIS 12.0 billion, up 4.1% from NIS 11.5 billion in 2009. Revenue growth was driven by higher revenues at Pelephone, Bezeq International and the initial consolidation of the Walla! results, and was partially offset by a 0.8% decline in Bezeq Fixed-Line’s revenues. Fourth quarter 2010 group revenues totaled NIS 3.1 billion, an increase of 4.3% versus the year ago quarter.

In the second quarter, Bezeq began consolidating the results of Walla!, the leading Israeli Internet portal serving a community of more than 5 million monthly users in Israel and abroad.

Bezeq’s operating profit increased 26.0% to NIS 3.7 billion in 2010 as compared to the full year 2009. The improvement in operating profit delivered a 31.2% operating margin and was driven primarily by higher total revenues and the positive impact of ongoing cost reduction initiatives, as well as by the incremental capital gains from the ongoing disposal of real estate and copper during the year.

Net profit attributable to Bezeq shareholders from continuing operations in 2010 amounted to NIS 2.4 billion, up 13.3% as compared to the full year 2009, excluding a one-time gain of NIS 1.5 billion related to the deconsolidation of yes in the third quarter of 2009.

Bezeq’s EBITDA for 2010 increased 15.6% to NIS 5.2 billion (EBITDA margin 43.0%) compared to 2009 (EBITDA margin 38.7%). EBITDA in the fourth quarter of 2010 increased 48.2% to NIS 1.3 billion (41.5% EBITDA margin) versus the year ago quarter (29.2% EBITDA margin).

Fourth quarter and full year 2009 operating profit, net profit, and EBITDA for the Fixed-Line segment were impacted by a NIS 267 million provision for employee retirement recorded in Q4 2009 versus a NIS 36 million provision recorded in 2010 of which only NIS 5 million was recorded in the fourth quarter. Subsequent to year end Bezeq announced a plan to early retire up to 260 employees at an estimated cost of NIS 281.5 million. The provision for these expenses will be recorded in the first quarter of 2011.

Cash flow from operating activities in 2010 rose 1.1% year-over-year to NIS 3.7 billion versus the full year 2009.

Gross capital expenditures in 2010 amounted to NIS 1.6 billion, an increase of 9.3% as compared to the full year 2009. This rise was primarily related to the ongoing rollout of the Bezeq’s Fixed-Line segment’s NGN (next generation network) infrastructure. The 2010 consolidated capex-to-sales ratio was 13.7%, as compared with 13.1% for the full year 2009.

As of December 31, 2010, Bezeq’s consolidated financial debt was NIS 5.7 billion, compared with NIS 4.1 billion as of December 31, 2009. The year-over-year increase in the financial debt was primarily related to Bezeq raising new debt totaling NIS 2.6 billion during the second and third quarters of 2010, through new loans from Israeli banks with an average duration of 4.7 years. These increases were partially offset by the repayment of debentures and loans by Bezeq and Pelephone. As of year-end 2010, the Bezeq’s net debt-to-EBITDA ratio was 1.04, as compared to 0.76 at year-end 2009.

Conference Call Information

The management of B Communications invites its investors and other interested parties to participate in the conference call of its parent company, Internet Gold -Golden Lines Ltd. (NASDAQ: IGLD), to be held today, Tuesday, March 8, at 11:00 am EST (18:00 in Israel). During the call, Messrs. Eli Holtzman and Doron Turgeman, who serve as the CEO and CFO of both Internet Gold and B Communications, will be available to answer questions regarding both Internet Gold and B Communications.

To participate, please call one of the following access numbers several minutes before the call begins:

1-888-668-9141 from within the U.S.

1-866-485-2399 from within Canada

0-800-917-5108 from within the U.K.

+972-3-918-0610 from other international locations

The call will also be broadcast live through the Company’s website, www.bcommunications.co.il, and will be available for replay during the next 30 days.

##

Notes:

1. A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of December 31, 2010 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of December 31, 2010 (NIS 3.5490 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

1. B. Purchase Price Allocation (PPA): In connection with B Communications’ acquisition of the controlling interest in Bezeq, it has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements.

1. C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard of generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

1. D. NON-IFRS MEASUREMENTS: Reconciliation between Bezeq’s results on an IFRS and non-IFRS basis is provided in a table immediately following Bezeq Group’s Consolidated Results. Non-IFRS financial measures consist of IFRS financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with IFRS.

We and Bezeq’s management regularly use supplemental non-IFRS financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-IFRS financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies. Reconciliation between results on an IFRS and non-IFRS basis is provided in a table immediately following the Consolidated Statement of Operations.

EBITDA is a non-IFRS financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with IFRS2, income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 30.29%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.78%-owned) (NASDAQ Global Select Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il

http://igld.com

www.bcommunications.co.il/

www.ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission.  These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet

On the same day, the management of B Communications invites its investors and other interested parties to participate in the conference call of its parent company, Internet Gold-Golden Lines Ltd. (NASDAQ: IGLD), to be held on March 8 , 2011, at 11:00 am EDT. During the call, the CEO and CFO of both, Internet Gold and B Communications, Messrs. Eli Holtzman, and Mr. Doron Turgeman, will be available to answer questions regarding both, Internet Gold and B Communications.

To participate, please call one of the following access numbers several minutes before the call begins: 1-888-668-9141 from within the U.S. or 1866-485-2399 from within Canada, 0-800-917-5108 from within the U.K., or +972-3-918-0610 from other international locations.
 
The call will also be broadcast live through the company’s Website, www.bcommunications.co.il, and will be available for replay during the next 30 days.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 30.29%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.78%-owned) (NASDAQ Global Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il     http://igld.com

www.bcommunications.co.il/    www.ir.bezeq.co.il/

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

-         Debt Repayment Process Progressing Well Ahead of Schedule–

-         Balance Sheet Strengthened Through Successful Issuance of
NIS 400 Million in Low-Interest Series B Debentures –

Ramat Gan, Israel – November 2, 2010 – B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) today reported its financial results for the third quarter ended September 30, 2010.

Consolidation of Bezeq Results

• Bezeq results consolidated for entire third quarter of 2010: B Communications’ third quarter results reflect the full consolidation of the operations of Bezeq – The Israel Telecommunication Corp., Ltd. (“Bezeq”) for the period. This reflects the fact that B Communications’ acquisition of the controlling interest of Bezeq (approximately 30.4%) was completed during the second quarter of 2010 (on April 14, 2010).

• Supplemental unconsolidated results table: To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis. B Communications’ interest in Bezeq’s net income is presented as a single line item in the unconsolidated table, (see below, “B Communications’ Unconsolidated Q3 Financial Results”).

• Adoption of IFRS: In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010 B Communications adopted the financial reporting standards utilized by Bezeq, the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP) (see note C below).

B Communications’ Third Quarter Financial Results

B Communications’ revenues for the third quarter were NIS 3.03 billion (US$ 828 million), an over ten-fold increase compared with NIS 294 million reported in the third quarter of 2009. The Company’s revenues for Q3 2010 consisted entirely of Bezeq’s revenues, while its Q3 2009 revenues consisted of sales generated by the Company’s legacy 012 Smile telecom business. Revenues for the first nine months of 2010, which consolidate Bezeq’s results from April 14, 2010, were NIS 5.6 billion (US$ 1.5 billion) compared with NIS 869 million reported in the first nine months of 2009.

B Communications’ net income attributable to the owners of the Company for the third quarter totaled NIS 42 million (US$ 11 million) compared with NIS 15 million recorded in the third quarter of 2009. B Communications’ net income attributable to the owners of the Company for the reporting quarter consisted entirely of the profit generated by Bezeq for the period, mitigated by the impact of two significant expenses:

• Financial expenses: B Communications’ financial expenses for the third quarter totaled NIS 84 million (US$ 23 million). These expenses consisted primarily of interest on the long-term loans incurred to finance the Bezeq acquisition, which totaled NIS 81 million (US$ 22 million), and expenses related to the Company’s CPI-linked debentures, which totaled NIS 8 million (US$ 2 million), offset by NIS 5 million (US$ 1 million) of finance income generated by the Company’s conservative portfolio of marketable investments.

• Amortization, net: B Communications’ amortization related to the Bezeq purchase price allocation totaled NIS 52 million, net (US$ 14 million) during the third quarter of 2010 (see Note B below).

B Communications’ Cash Position and Loan Repayment Plan

• Successful placement of NIS 400 million in debentures: On September 21, 2010, B Communications issued NIS 400 million (US$ 109 million) of Series B debentures. These debentures carry a 6.5% fixed annual interest rate, are not linked to the Israeli CPI and are listed for trade on the Tel Aviv Stock Exchange.

• Dividends received from Bezeq: On October 7, 2010,
  B Communications received a dividend of NIS 389 million (US$ 106 million) from Bezeq. Bezeq paid this dividend in line with its announced policy of paying out 100% of its net income as dividends on a semi-annual basis. This dividend was larger than projected in the Company’s original budget and loan repayment plan. The Company used this dividend for three purposes:

1) Payment of a portion of its current loan repayment commitment in the amount of NIS 255 million (US$ 70 million).

2) Pre-payment of an additional NIS 56 million (US$ 15 million) to creditors, thereby reducing the size of the final “bullet” repayment that is due at the end of the loan repayment period and saving related future interest expenses.

3) Addition of NIS 78 million (US$ 21 million) to the Company’s cash balance.

• Outstanding loans and loan repayment plan: At September 30, 2010, the Company’s unconsolidated total gross debt was NIS 5.2 billion (US$ 1.4 billion) and unconsolidated net debt was NIS 4.1 billion (US$ 1.1 billion). At this point, the Company’s loan repayment process is proceeding well ahead of schedule.

B Communications’ Unconsolidated Cash Position

B Communications’ Unconsolidated Q3 Financial Results

Comments of Management

Commenting on the results, Mr. Eli Holtzman, CEO of B Communications, said, “We are pleased to report a period of rapid progress that has confirmed Bezeq’s cash generation potential and the overall soundness of our loan repayment plan.

“Bezeq has reported another excellent quarter, demonstrating the power of its formidable position in Israel’s telecommunications market, strong management and growth strategy to generate sizeable profits. Having received a larger-than-expected dividend, we have been able to accelerate our repayment plan and to increase our cash balance. At the same time, we took advantage of favorable market conditions to further strengthen our balance sheet, raising NIS 400 million from investors at a low rate of interest. As such, we feel well positioned to carry out all of our plans and to continue seeking out ways to generate value for our shareholders.”

Bezeq Group’s Q3 Financial Results

To provide further insight into its results, the Company has provided the following summary of the Bezeq Group’s Q3 consolidated financial report. For a full discussion of Bezeq’s results for the quarter, please refer to http://ir.bezeq.co.il

Bezeq Group’s Consolidated Results

Bezeq Group revenues for Q3 2010 totaled a record NIS 3.03 billion, up 3.7% from NIS 2.92 billion in the year ago period. Revenue growth was driven by higher revenues at Pelephone, Bezeq International and the consolidation of Walla!, and was partially offset by a 1.5% decline in Bezeq Fixed-Line revenues.

Bezeq’s operating profit increased 11.9% to NIS 979 million in Q3 2010, up from NIS 875 million in Q3 2009. The improvement in operating profit delivered a 32.3% operating margin and was driven primarily by higher total revenues, the positive impact of ongoing cost reduction initiatives and to a lesser extent by the positive impact from the ongoing disposal of real estate and copper during the quarter.

Net profit attributable to Bezeq shareholders for Q3 2010 amounted to NIS 588 million, in line with the year ago period when excluding a one-time gain of NIS 1.5 billion related to the deconsolidation of Yes in Q3 2009.

Cash flow from operating activities in Q3 2010 rose 14.2% year-over-year to NIS 1.17 billion, as compared to NIS 1.02 billion in Q3 2009. The year-over-year increase in operating cash flow was primarily related to working capital timing differences within the Fixed-Line segment.

Free cash flow increased 27.5% year-over-year to NIS 838 million in Q3 2010, as compared with NIS 657 million in Q3 2009, due to the aforementioned change in operating cash flow and a 9.9% decline in capital expenditures-related payments made during the quarter.

Conference Call Information

The management of B Communications invites its investors and other interested parties to participate in the conference call of its parent company, Internet Gold -Golden Lines Ltd. (NASDAQ: IGLD), to be held today, Tuesday, November 2, at 09:00 am EDT (15:00 in Israel). During the call, Messrs. Eli Holtzman and Doron Turgeman, who serve as the CEO and CFO of both Internet Gold and B Communications, will be available to answer questions regarding both Internet Gold and B Communications.

To participate, please call one of the following access numbers several minutes before the call begins:

1-888-668-9141 from within the U.S.

1-866-485-2399 from within Canada

0-800-917-5108 from within the U.K.

+972-3-918-0609 from other international locations

The call will also be broadcast live through the Company’s website, www.bcommunications.co.il,  and will be available for replay during the next 30 days.

##

Notes:

1. A. Convenience Translation to Dollars: For the convenience of the reader, the reported NIS figures of September 30, 2010 have been presented in millions of U.S. dollars, translated at the representative rate of exchange as of September 30, 2010 (NIS 3.6650 = U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not be construed as representing amounts receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless otherwise indicated.

1. B. Purchase Price Allocation (PPA): In connection with B Communications’ acquisition of the controlling interest in Bezeq, it has prepared a preliminary PPA for the allocation of the transaction’s purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. This is a complex process which has not yet been finalized, and the preliminary PPA is subject to adjustment. If, for any reason, the Company finds it necessary or appropriate to make adjustments to the PPA, it may result in significant changes to future financial statements.

1. C. Adoption of International Financial Reporting Standards (IFRS): In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted the IFRS as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard of generally accepted accounting principles in the United States (US GAAP). The transition date to IFRS under First Time Adoption of International Financial Reporting Standards is January 1, 2008, and the Company will provide retrospective comparative financial data to reflect its adoption of IFRS. The Company’s Annual Report on Form 20-F for the year ended December 31, 2009, which was filed in June 2010, includes consolidated financial statements for the years ended December 31, 2008 and 2009 prepared in accordance with the IFRS.

1. D. NON-GAAP MEASUREMENTS: Reconciliation between Bezeq’s results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude amortization of acquired intangible assets, as well as certain business combination accounting entries. The purpose of such adjustments is to give an indication of Bezeq’s performance exclusive of non-cash charges and other items that are considered by management to be outside of its core operating results. Bezeq’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with its consolidated financial statements prepared in accordance with GAAP.

Bezeq’s management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand Bezeq’s current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations.

EBITDA is a non-GAAP financial measure generally defined as earnings before interest, taxes, depreciation and amortization. Bezeq defines EBITDA as net income before financial income (expenses), net, impairment and other charges, expenses recorded for stock compensation in accordance with ASC 718-10 (formerly known as SFAS 123(R)), income tax expenses and depreciation and amortization. We present Bezeq’s EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structure, tax positions (such as the impact of changes in effective tax rates or net operating losses) and the age of, and depreciation expenses associated with, fixed assets (affecting relative depreciation expense).

EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with GAAP as a measure of profitability or liquidity. EBITDA does not take into account our debt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. In addition, EBITDA, as presented in this press release, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 30.37%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.62%-owned) (NASDAQ Global Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il

http://igld.com

www.bcommunications.co.il/

www.ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’ filings with the Securities Exchange Commission.  These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

Press here for Consolidated Balance Sheet

On the following day, the management of B Communications invites its investors and other interested parties to participate in the conference call of its parent company, Internet Gold-Golden Lines Ltd. (NASDAQ: IGLD), to be held on November 3^rd , 2010, at 09:00 am EDT. During the call, the CEO and CFO of both, Internet Gold and B Communications, Messrs. Eli Holtzman, and Mr. Doron Turgeman, will be available to answer questions regarding both, Internet Gold and B Communications.

To participate, please call one of the following access numbers several minutes before the call begins: 1-888-668-9141 from within the U.S. or 1866-485-2399 from within Canada, 0-800-917-5108 from within the U.K., or +972-3-918-0609 from other international locations.
The call will also be broadcast live through the company’s Website, www.bcommunications.co.il, and will be available for replay during the next 30 days.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 30.37%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.62%-owned) (NASDAQ Global Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il http://igld.com

www.bcommunications.co.il/ www.ir.bezeq.co.il/

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620

The Company expects to issue, at par value, NIS 400,000,000 (approximately $107 million) Series B Debentures. The Series B Debentures are payable in four equal annual installments on March 31 of each of the years 2016 through 2019, pay interest at a fixed annual rate of 6.5% as was set in the public tender, payable semi-annually on March 31 and on September 30 of each of the years 2011 through 2019 (the first interest payment will be made on March 31, 2011, and the last interest payment will be made on March 31, 2019). The Series B Debentures are NIS denominated and are not linked to the Israeli Consumer Price Index. The interest rate for the first interest period beginning on September 26, 2010 and ending on March 30, 2011 for the Series B Debentures, is 3.31233%.

The Series B Debentures contain standard terms and conditions and are unsecured, non convertible and do not restrict the Company’s ability to issue any new series of debt instruments or distribute dividends in the future. The Series B Debentures will be listed for trading on the Tel Aviv Stock Exchange Ltd.

The net proceeds from the Public Offering, after deduction of the arrangers fees, early commitment fees and other expenses and commissions of the Public Offering, are expected to be approximately NIS 395,800,000.

On September 1, 2010, Midroog Ltd., an Israeli rating agency, announced that it assigned its “A2″ rating (local scale) to unsecured debentures to be issued by the Company, which include the Series B Debentures.

The Series B Debentures were offered only in Israel, and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to U.S. Persons (as defined in Regulation “S” promulgated under the Securities Act) without registration under the Securities Act or an exemption from the registration requirements of the Securities Act.

This press release shall not be deemed to be an offer to sell or a solicitation of an offer to buy any of the Series B Debentures.

About B Communications Ltd.

B Communications Ltd. (NASDAQ Global Market and TASE: BCOM) is a holding company with a single asset: the controlling interest (approximately 30.41%) in Bezeq (www.bezeq.co.il), Israel’s incumbent telecommunications provider. Bezeq is the leading player in the majority of Israel’s telecommunications markets, including its fixed-line and mobile voice and data, broadband, international long distance, multichannel pay TV and other sectors. B Communications is a subsidiary of Internet Gold (approximately 76.62%-owned) (NASDAQ Global Market and TASE: IGLD) and is part of the Eurocom Group. For more information, please visit the following Internet sites:

www.eurocom.co.il http://igld.com

www.bcommunications.co.il/ www.ir.bezeq.co.il/

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties.  Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in B Communications’s filings with the Securities Exchange Commission.  These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.  Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.  We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Idit Azulay – IR director

i.azulay@igld.com / Tel: +972-3-924-0000

Investor relations contacts:

Mor Dagan – Investor Relations

mor@km-ir.co.il / Tel: +972-3-516-7620