Israel’s Partner Communications, which operates under the Orange brand name, has signed a four-year contract Ericsson for the upgrade of its existing infrastructure, and the deployment of a high-speed mobile broadband network in the country. The replacement of the operator's switches and radio equipment is scheduled to be carried out by the end of 2012. The network rollout is subject to the allocation of the relevant frequencies by the Ministry of Communications.

Partner Communications Company Ltd. ("Partner" or "the Company") (NASDAQ and TASE: PTNR), a leading Israeli communications operator, announced today that it has entered last night into an agreement with LM Ericsson Israel Ltd. ("Ericsson") for the upgrade of its existing networks and the deployment of fourth generation network in Israel (the "Agreement"). The Agreement includes the upgrade, replacement and the expansion of certain parts of the Company's existing cellular and fixed line networks and the maintenance of the networks, including  enhancement of Partner's abilities with respect to the cellular and fix line ISP services it provides. The commercial operation of the fourth generation network by Partner is subject to the allocation of the relevant frequencies by the Ministry of Communications.

The term of the Agreement will be effective from the date of signature and until December 31, 2014, whereas the replacement of the Company's switches and radio equipment is scheduled to be carried out by the end of the year 2012.

The transaction will result in accelerated depreciation of the replaced equipment, throughout the replacement period, whereas the main impact of the accelerated depreciation will occur during the years 2011 and 2012. As of September 30, 2010, the fixed assets, which the Company intends to replace, minus the accumulated depreciation, are approximately US$ 40 million. The transaction will facilitate in the preplanning of the multi year budget.

The total net amount, following all discounts and settlements, some of which are conditioned, that Partner will be required to pay, in quarterly instalments throughout the term of the Agreement, for the capital expenditure and maintenance services is approximately US$ 100 million.

Commenting  on the Agreement, Mr. Gelbard, Partner's CEO, stated: "Since the Company was founded, it has led the communications market in Israel in establishing the first GSM network in Israel as well as establishing the first third generation network that was launched in Israel. The content of the Agreement signed, will enable Partner to continue leading the technological arena in the communications market while upgrading its technological abilities and establishing the first fourth generation network in Israel. The new network is intended to meet Partner's needs with respect to its cellular and fixed line networks and will bring a significant improvement and enhancement in the level of Partner's network performances and the services that Partner provides and intends to provide to its customers in the coming years, noting, inter alia, the anticipated growth in Partner's customers consumption of communication services – both data (content) services and fixed line and cellular services".