About Partner Communications

Partner Communications Company Ltd. operates as a telecommunications company. The company provides a wide integrated and customized range of cellular and fixed-line telecommunication services, including infrastructure, international long distance (ILD), Internet services provider (ISP), television and other services, as well as related equipment. The company offers its subscribers various products and services to address a range of communications needs. Segments The company operates through two segments, Cellular and Fixed-Line. Cellular segment This segment includes cellular communications services, such as airtime calls, international roaming services, text messaging, internet browsing, value-added and content services, handset repair services, and services provided to other operators that use the company's cellular network. The company also sells and leases a range of equipment related to cellular services. Approximately 88% of its subscriber base (approximately 2,671 thousand subscribers) subscribed to post-paid tariff plans and 12% (approximately 352 thousand subscribers) subscribed to pre-paid tariff plans. The company’s 3G and 4G network covers 99% of the Israeli population, and its 5G network covers 30% of the Israeli population in line with the deployment milestones in its license. The company operates its GSM network in the 900 MHz and 1800 MHz bands, the UMTS network in the 900 MHz and 2100 MHz band, the LTE network in the 700, 1800, 2100 and 2600 MHz bands and 5G (NSA) on the 3.5 MHz band. It already deployed 800 LTE sites in the 700MHz band. The company’s services provided on its network include standard and enhanced services, as well as value-added services and products. The company markets its cellular services and products mainly under the Partner brand, as well as under the 012 Mobile brand. Services and Products Cellular Services The company’s main business is cellular telephony, including the basic cellular telephony services of voice calls, text messaging, internet browsing and data transfer, as well as a variety of content services, roaming services, handset repair services, services provided to other operators that are permitted to use the company's cellular network and Machine to Machine (M2M) and Internet of Things (IOT) services. Cellular content and value-added services offered include, but are not limited to, multimedia messaging, cyber protection, cloud backup, ringtones, music streaming services and a range of business services. International Roaming The company offers its customers roaming services abroad, which allow a mobile phone subscriber to place and to receive calls while in the coverage area of foreign networks owned by operators with whom it has commercial roaming agreement. The company offers data-only packages, as well as packages that combine calls, data and short message system service (SMS). As of December 31, 2021, the company had commercial roaming relationships with 564 operators in 181 countries or jurisdictions, 335 3G roaming agreements in 177 countries, 145 4G roaming agreements in 78 countries and 22 5G roaming agreements in 22 countries. Creating roaming relationships with multiple operators in each country increases potential incoming roaming revenue for the company and gives its subscribers more choice in coverage, services and prices in that country. The 3G and 4G roaming agreements enable its 3G roamers to initiate video calls, high speed data and video and audio content while abroad. Cellular Equipment and Devices Equipment and device sales in the Cellular segment include sales and leases of cellular handsets and related cellular devices and accessories, mainly to retail customers but also to some wholesale customers. Fixed-line segment This segment includes a number of services provided over fixed-line networks, including Internet services, including access to the internet through both fiber-optics and wholesale broadband access, ISP (internet service providers) services, internet Value Added Services (VAS), such as cyber protection, anti-virus and anti-spam filtering, and fixed-line voice communication services provided through Voice Over Broadband (VOB); Business solutions, including Session Initiation Protocol (SIP) voice trunks, Network Termination Point Services (NTP) – under which the company supplies, installs, operates and maintains endpoint network equipment and solutions, including providing and installing equipment and cabling within a subscriber's place of business or premises, hosting services, transmission services, Primary Rate Interface (PRI) and other fixed-line communications solution services; International Long Distance services (ILD): outgoing and incoming international telephony, hubbing, roaming and signaling and calling card services; television services over the Internet (TV); and connections and data transfer services provided to international telecommunications operators over the fiber-optic infrastructure. In addition, this segment includes the sales and leasing of telecommunications, audio-visual, and internet-related devices, including cellular handsets, phones, tablets, laptops, modems, data cards, domestic routers, servers and related peripherals, equipment and integration projects. The company’s fixed-line services are marketed under the Partner and 012 brands. Fixed-line Services and Products Fixed-Line Services and Infrastructure The company offers fixed-line services that include Internet services, ILD services, transmission services, telephony services (including SIP services), TV services and high speed broadband fiber-optic infrastructure. ISP Services: As an internet service provider providing access to the World Wide Web, the company offers its customers, in addition to access, additional ISP services, including email accounts, and Wi-Fi networking, as well as additional value added services, such as anti-virus and anti-spam filtering. The company also offers a bundled package that includes infrastructure and ISP access services following the wholesale market reform, a triple package that includes in addition to the bundled package also TV services and since 2017, the company also offers access services over its own fiber-optic fixed-line infrastructure in certain parts of the country, with speeds up to 3 GB. Furthermore, the company offers its business customers additional tailored value services that combine an entire array of solutions, including network and data infrastructures, advanced information security solutions, integration solutions, designated services for customers with multiple branches and commercial networks, business information storage in a secured and advanced data center and cloud services. ISP services include the leasing of related equipment, including modems and routers. ILD Services: As an international long distance provider, the company offers its residential and business customers international telephony services, including direct international dialing services, international and domestic pre-paid and post-paid calling cards, and call-back services. Most of the pre-paid calling cards are sold to foreign workers in Israel. In addition, the company offers its business customers international toll-free numbers that offer fixed rates on calls from the majority of countries worldwide. As an international long distance provider, the company also provides hubbing traffic routing between network operators for termination of long distance calls outside of Israel. Transmission: The company provides fixed-line transmission and data capacity services. Its fixed-line capacity also includes capacity, which the company leases from other fixed-line telecommunications service providers, as well as inland fiber-optic infrastructure and complimentary micro wave radio links. The services the company offers include primarily connectivity services, on a synchronous digital hierarchy (SDH) transmission network, by which it provides point-to-point connection for business customers and telecommunications providers, as well as fixed-line services to business customers. The company also provides international transmission services to its business customers between Israel and other countries. VOB and Primary Rate Interface (PRI): The VOB service allows business and residential customers to make and receive telephone calls over the Internet through an Internet connection. The PRI is a landline network service connecting organizational switchboards to Partner's network and allows business customers to make multiple calls simultaneously. The company offers traditional voice services to business customers throughout Israel. Television Services: In 2017, the company launched its over the Internet (OTT) television services that provide its customers with an enhanced user interface experience of television services based on an open platform, Android TV. Partner TV service offers its customers dozens of live linear channels, including ‘catch up’ capability of up to 14 days, video on demand library, Network Personal Video Recorder (NPVR), direct access to YouTube, Netflix, Spotify and Amazon Prime Video content through a dedicated button on its remote control allowing its customers to access their favorite show with a simple click. The company also enables customers to subscribe and pay for Netflix and Amazon Prime Video through the Partner TV bill. Its TV service also includes a fully supported 4K set-top box with an Android TV operating system, which enables the viewer to add content, games and music applications directly from the Google Play store. The company’s full TV service can also be accessed by smartphones, tablets, Apple TV boxes, Smart TVs and personal computers (TV everywhere) and it continues to work on developing its smart TV offerings. Over 80% of its TV subscribers have bundled offerings with internet services. The company offers an addressable TV advertisement system based on an integrated advertising management platform-Google Ad manager that enables the targeting of specific audiences and maximizes the ability of the Android TV set top boxes. The company’s strategy is to offer its customers unique television services, by partnering with media service providers. As part of its strategy, the company continues to be a super aggregator, which enables its customers the ability to access the streaming services in the world, including Netflix, Amazon Prime Video, Spotify and YouTube, using a single interface, as well as cloud gaming services. High Speed Broadband Fiber-optic Based Network: In 2017, the company launched the commercial phase and acceleration of its fiber-optic infrastructure in residential areas throughout the country, which provided for the first time an alternative to the existing fixed infrastructure in Israel. In February 2022, the company signed an agreement with two wholesale telecommunication suppliers, which enables them to provide fiber services on its fiber-optic network to their subscribers. In addition, the company has entered into IRU (Indefeasible Right of Use) agreements with international telecommunications operators and large international business customers for the sale of IRUs and lease of certain fiber-optics in its fiber-optic infrastructure (‘dark fibers’), as well as maintenance and operation services with respect to such fibers. Value-Added Services In addition to standard fixed-line value-added services, the company offers various value-added services, such as defense and security services for the computer and e-mail that include, among others, parental monitoring control, firewall, Web hosting, anti-virus and site filtering based on the customer’s restriction definition, and other value added Internet services, including hosting, cloud-based hosted services and virtual switchboard. The company also offers an upgraded data center that provides customers with business solutions on a secure site, including hosting services (storage and maintenance of physical and virtual servers, website hosting, information storage and disaster recovery site), management communication services, and integrated services. Fixed-Line Equipment and Devices Equipment and devices sales in the fixed-line segment include sales and rental of modems, domestic routers, servers and related equipment, integration project hardware and various digital audio visual devices, audio accessories and related devices. In addition, the company provides its business customers with office communication Private Branch Exchanges (PBX). This service, available on the premises or cloud-based, provides all telephony services, including unified communication features, as well as Direct Inward Dialing (DID), which provides a block of telephone numbers for calling into the customer’s PBX system. DID allows the company to offer its customers individual phone numbers for each person or workstation within the company without requiring a physical line into the PBX for each possible connection. Tariff Plans As of December 31, 2021, approximately 88% of the company’s cellular subscriber base (approximately 2,671 thousand subscribers) subscribed to post-paid tariff plans, and 12% (approximately 352 thousand subscribers) subscribed to pre-paid tariff plans. Revenues from post-paid subscribers accounted for over 90% of total cellular service revenues in the year 2021. Post-paid Cellular Tariff Plans: Most of the company’s post-paid cellular tariff plans for private customers are bundles, including large amounts of call minutes (usually 5,000 minutes) and SMS, as well as browsing packages. Many of these bundles also include a limited amount of international call minutes and other value-added services, such as cybersecurity, antivirus, cloud backup and other solutions and extended handset warranty plans. In addition, the company offers a limited number of bundles with fixed amounts of call minutes and SMS and browsing packages. The elements of the company’s cellular tariff plans for post-paid private customers are packaged and marketed in various ways to create tariff packages attractive to target markets, including families, military personnel, youth, students, family members of business customers and other sectors. The company also offers dedicated plans for data usage (eg. for use with dongles or with cellular routers and modems), which offer large browsing packages. Generally, its post-paid customer subscriber agreements does not have any commitment periods. However, some of the company’s contracts with large business customers with over 100 subscribers include commitment terms with exit fees for early termination. The company also markets post-paid cellular tariff plans under an alternative brand, ‘012 Mobile’. Under this brand, the company offers plans mainly under a digital self-service model through a dedicated website (including web-chat with customer representatives) at competitive prices. Pre-paid Cellular Tariff Plans: Under the company’s pre-paid plans, upon purchase of a SIM card or phone card or prepayment by credit card or cash, customers can use its network, including some of its value-added services, without the need to register with it or enter into any contract. The company’s pre-paid plans enable it to compete in the pre-paid cellular services market. Fixed-line Tariff Plans For its Fixed-Line services, the company has a range of diverse plans and bundles to meet the needs of the various sub-markets-ISP, ILD, transmission, TV, fiber, VOB and PRI. In the ILD services market it has tariff plans based on call destinations and level of use. The company’s Internet Service prices and its wholesale infrastructure and fiber-optic infrastructure services prices are based on bandwidth speed. The company offers a variety of internet solutions for home and business use according to each customer's needs. Strategy The company’s strategy is to further reinforce its position as a comprehensive telecommunications company that offers an entire range of telecommunication solutions to various customers, and it intends to lead the market in service, as well as technology. Sales and Distribution Channels The company distributes its services and products through direct sales channels and indirect sales channels. Direct Sales Channels Sales and Service Centers: The company’s walk-in centers in stores and malls also serve as sales centers. The face-to-face contact enables customers to get the ‘touch and feel’ of new handsets, tablets, accessories and services demonstrated by the company’s representatives. Direct Sales Force: The company’s sales force includes sales and service representatives. Indirect Sales Channels The company has agreements with many traditional dealers that provide over 38 points of sale, selling a range of its products. The private dealer network is an important distribution channel because of its ability to attract existing cellular users to its network. The company’s dealer network focuses primarily on sales to individual customers and, to a lesser extent, small business customers. These dealers specialize in sales for post-paid customers, handset sales, TV, fiber, infrastructure and internet. In addition, the company has agreements with prepaid distributors that specialize in sales for pre-paid customers and distribution of pre-paid plans to sub-dealers. The company also has specific dealers that target different segments of the Israeli population with the appropriate style, language and locations. Online Sales Channels The company’s cellular and fixed-line services are also available to be purchased online. It also manages an online service for the purchase of handsets and other equipment. Suppliers Suppliers for Cellular Network During 2020, the company entered into a maintenance and support agreement with a third party that provides maintenance for Ericsson equipment. For the replacement and upgrade of its EPC (Evolved Package Core) and IMS (IP Multimedia Sub System), the company entered into an agreement with Mavenir Systems Limited in 2019. Handset and Other Equipment Suppliers: The company entered into a non-exclusive agreement with Apple Distribution International effective April 1, 2021, for the purchase and resale of iPhone handsets in Israel for a three-year period. During 2021, the company purchased the majority of the company’s handsets from Apple Distribution International and Samsung. The company also purchases handsets and other equipment, including tablets and laptops, from other vendors. Suppliers for TV Content and Equipment: In 2017, the company partnered with Netflix, the world leading internet entertainment network, to make its services directly accessible through its TV service. Furthermore, in April 2018, the company announced a unique collaboration with Amazon Prime Video, making Partner TV the first and only television service in Israel to offer Amazon Prime Video application on a set top box and the first Over the Top service in the world to support this application on an Android TV set top box. In addition, the company has agreements with suppliers in the industry for the provision of the following: Set top boxes for the company’s TV service manufactured by Technicolor SA; Back office and content management system (CMS) manufactured by SeaChange International Inc.; Video content distribution system (CDN) manufactured by Broadpeak; Encoding systems manufactured by Harmonic & AWS Elemental; and TV application installed on set top boxes, PCs Apple TV boxes, tablets and cellular devices manufactured by I Feel Smart. Suppliers for Fixed-line Network: Bezeq-The Israel Telecommunication Corp. Ltd. (Bezeq) and HOT Groups own the majority of the fixed-line telecommunications infrastructures in Israel. As a result, the company uses interconnection with the Bezeq-The Israel Telecommunication Corp. Ltd. and HOT Groups’ infrastructure. Most of the company’s broadband customers use Bezeq-The Israel Telecommunication Corp. Ltd. and Hot infrastructure, which connects to the company’s ISP network. In addition, for international connectivity to all major Western European countries and the United States, the company uses Tamares Telecom Ltd. and TI Sparkle Israel, who supply the company with transmission services through their submarine infrastructures. Dialogic Inc. and Broadsoft Inc. supply the company with switches for the fixed-line telephony services based on Internet Protocol (VoIP) and circuit switched calls. Intellectual Property The company is the registered owners of the trademark ‘Partner’ in Israel with respect to telecommunications-related devices and services, as well as additional trademarks. It has also registered several internet Web domain names, including, among others: www.partner.co.il. 012 Smile is the registered owner of several trademarks in Israel with respect to telecommunications-related services that include the numbers ‘012’. In addition, 012 Smile has registered several internet Web domain names, including, among others, www.012.net and www.012.net.il. The company is the assignee in a patent application filed in 2012 that claims a method for delivering short messages originated by roaming prepaid subscribers. A Notice of Allowance was issued for the application in 2013 and a patent was issued in 2014. In addition, the company is a full member of the GSMA Association. In conjunction with the promotion and operation of the company’s GSM network, it has the right to use their relevant intellectual property, such as the GSM trademark and logo, security algorithms, roaming agreement templates, and billing transfer information file formats. The company is eligible to remain a member of the GSMA Association for as long as it is licensed to provide GSM service. Regulation The company operates within Israel primarily under the Telecommunications Law, the Wireless Telegraphy Ordinance (New Version), 1972 (the Wireless Telegraphy Ordinance), the regulations promulgated by the Ministry of Communications and its telecommunication licenses. The regulatory framework under which the company operates consists also of the Planning and Building Law, the Consumer Protection Law, 1981, and the Non-Ionizing Radiation Law. In June 2021, the Minister of Communications published its decision regarding the abolition of the split between the infrastructure service and the ISP service. The decision is aimed at ending the split of this segment into two tiers and allowing Bezeq and Hot Telecom to market a unified product (comprised of both infrastructure and ISP components). Pursuant to the company’s license, it has submitted its standard agreement with customers to the Ministry of Communications for their examination. The company’s license allows it to set and change its tariffs for outgoing calls and any other service without approval of the Ministry of Communications. The company is required to provide any service with the same coverage as its existing network. According to its license, the company is required to meet certain coverage requirements for its 3G, 4G and 5G services. In October 2021, the company was granted a license from the Ministry of Energy to supply electricity without means of production. The License will allow the company to purchase electricity for sale to consumers that have online meters. The license is valid until October 2026. Competition In the fixed-line market, the company’s main competitors are Bezeq-The Israel Telecommunication Corp. Ltd., Israel’s largest telecommunications provider and the primary fixed-line operator, Hot Telecom LP (HOT Telecom), and other telecommunication services providers, including Cellcom Israel Ltd. (Cellcom) who operate in the fixed-line market. In the ILD services market, the company competes with Netvision Ltd. (Netvision) from the Cellcom Group, Bezeq International Corp. Ltd. (Bezeq International), Marathon 018 Xfone Ltd. (Xfone), Hashikma Communications Marketing Ltd., Telzar 019 International Telecommunication Service Ltd, Golan Telecom International Ltd. and HOT Mobile International Telecommunications Ltd. In the ISP services market, the company competes with Netvision, Bezeq International, HOT Net from the HOT Group, Xfone, Triple C Cloud Computing Company Ltd., Telzar 019 International Telecommunication Service Ltd, Qwick linq 011 International Ltd., and 099 Primo Communications Ltd. In the TV services market, the company competes with DBS Satellite Services (1998) Ltd. (Yes), a subsidiary of Bezeq-The Israel Telecommunication Corp. Ltd., which offers TV services provided via satellite and via OTT. History Partner Communications Company Ltd. was founded in 1997. The company was incorporated in Israel under the laws of the state of Israel in 1997.