RAMALLAH, Palestine, August 13, 2012/PRNewswire-FirstCall - MySolutionInfo/ -- Net Income reached US$ 58m while economic activity in the market place is experiencing retraction on the short term Classified by Palestine exchange as the leader company in dividends payout , distributed over 90% of USD 74.2 Million to shareholders this year

The Palestine Telecommunications Company, PalTel announced its financial results for
the first half of 2012.

Consolidated net operating revenues grew by 0.3% to reach US$ 258m at the end of
H1-2012 compared with US$ 257m at the end of H1-2011. In regards to the operating revenues
of each segment, the company achieved a growth in its mobile and data revenues by 0.6% and
68.8% respectively while fixed Line and Media revenues dropped by 9.0% and 11.8%
respectively.

The consolidated operating income reached US$ 83m by the end of H1-2012 compared with
US$ 91m by the end of H1-2011,. The growth rates in revenues and operating results for the
current period have been affected by several external developments, principal of which was
the devaluation of the Israeli Shekel (collection currency) versus the Jordanian Dinar
(reporting currency) where the average exchange rate during the first six months of 2012
was 5.36 ILS/JOD compared to 4.96 ILS/JOD the same period of last year.

The consolidated net income stands at US$ 58m at the end of H1-2012 compared with US$
67m at the end of H1-2011. The decline is mainly attributable to the devaluation of the
Israeli Shekel and as a direct result to the company's decision to postpone the 50% tax
exemption for two years in response to a request by the government in order to alleviate
the public financial crisis; Paltel is entitled for this exemption as part of the law of
encouragement of investment in Palestine. Another exogenous factor is the new income tax
bracket of 20% imposed this year by the government compared to 7.5% the year before. As a
result of the fiscal crisis in the public sector, the tax authorities in Palestine have
declared a new tax scheme raising the corporate tax rate from 15% to 20% starting January
2012.

Sabih Masri, Chairman of PalTel stated that "Throughout the years we have experienced
strong growth in our net operating revenues and our operating revenues in core business
operations in terms of mobile and data services. Although there has been a decline in our
operating income this quarter, it is due to the impact of the revised Tax Law that was
enforced beginning of this year in addition to an economic slowdown in Palestine. Masri
further stated that "by the end of the fiscal year, we hope that our accumulated results
will reflect more positive results in all operational indicators as we continue to work on
the short term plans and continue to develop on the long term vision of the
Telecommunications sector in Palestine."

Ammar Aker, CEO of Paltel Group stated, "we are confident that we will absorb the
sudden interruptions caused by the new tax bracket, the tax exemption waiver plus foreign
currency fluctuations in the short term as we continue to adapt implementing a prudent
strategy of both growing our customer base and preserving our customer loyalty. We believe
the current turbulence and uncertainty is tied to external factors and we are hopeful that
before end of year the economic conditions will stabilize and the impact on our results
shall be diluted by end of the year"

For further information please contact

Ms. Fareeda Diab
Director of Investor Relations
Fareeda.diab@paltelgroup.ps

or

IR@paltelgroup.ps
Tel: +970-2-294-4004
Mob: +970-59-900-00-22