Accounting Implications of the Supreme Court Ruling in the Matter of the Merger of DBS Satellite Services Ltd. (“yes”)

August 24, 2009

TEL AVIV, Israel, August 24 /PRNewswire-FirstCall/ — Bezeq The Israel
Telecommunication Corp., Limited (TASE: BEZQ), Israel’s leading
telecommunications provider, made the following announcement further to the
Company’s immediate report on August 20, 2009, regarding the Supreme Court’s
ruling in the matter of the merger of the Company with yes, in which the
Supreme Court accepted the appeal of the Antitrust Commissioner and resolved
not to approve the merger:

In accordance with generally accepted accounting principles, and in light
of the ruling, the Company will cease to consolidate yes in its financial
statements. As a result, the Company will record its investment in yes
according to the equity method, based on the fair value of this investment on
the date of cessation of consolidation.

The Company estimates, prior to performing an updated valuation of yes
and prior to finalizing the examination of all the relevant accounting
issues, and based on the information currently available, that it will record
a significant one-time profit, estimated at this stage at NIS 1.2-1.4
. The Company reiterated that at this stage, the estimate is uncertain
and subject to the above qualifications concerning the valuation and the
accounting reviews now in progress.

About Bezeq The Israel Telecommunication Corp.

Bezeq is Israel’s leading telecommunications service provider.
Established in 1984, the company has led Israel into the new era of
communications, based on the most advanced technologies and services. Bezeq
and its subsidiaries offer the full range of communications services
including domestic, international and cellular phone services; Internet,
ADSL, and other data communications; satellite-based multi-channel TV; and
corporate networks. For more information about Bezeq please visit the
corporate website at http://www.bezeq.co.il.

    Investor Relations Contact:
    Mr. Naftali Sternlicht
    Phone: +972-2-539-5441
    E-Mail: ir@bezeq.co.il

    Media Relations Contact:
    Mr. Guy Hadass
    Phone: +972-3-626-2600
    E-Mail: dover@bezeq.co.il


Source: newswire

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