NASDAQ GM / TASE – 100 Index- symbol: IGLD Eli Holtzman, CEO Doron Turgeman, CFO Q Internet Gold Leading Israeli communications and Interactive media Group

Forward-Looking Statement The statements contained herein that are not purely historical are forward-looking statements. These forward-looking statements, and especially those regarding the 012 merger, involve risks and uncertainties and actual results could differ materially from the results discussed in these statements.

History  April Euronet Golden Lines emerges as Eurocom Communications services subsidiary (Information/Satellite/Int’l comm. Services)  January 1996 – commence ISP service  August 1999 – leading Israeli ISP. Public on NASDAQ  2000 – subsidiaries - GoldMind / GoldTrade / IGI / MSN Israel  Q – signed partnership with MS / April 2000 – msn Israel is up  Mid 2001 – turn & remain profitable / growth throughout almost all Q’s  August 2004 – ILD service is launched with 015  April 2005 – Dual listed on TASE (Dec. 06 – enters TA100 index)  January 2006 – re-org & re-brand to Smile - GT => SCL / GM => SML  August 2006 – acquisition of 012 Golden Lines from the Fishman Group  December 31 st 2006 – 012 deal closing. Actual merger starts

Corporate Structure

Committed to growth… crossing the 1B NIS revenue line 2006 –Build-out of International VoIP Telephony services –Expansion of Internet Advertising –Expansion of Business Services –012 acquisition completed Dec operations to be consolidated – Q1/07-Q4/ –1st full year of the merged operation –Continued growth expected in all lines of business (under both ‘smile’ and ‘012’ brands) Primary drivers: in NIS millions Organic CAGR = +26% M&A CAGR = +63%

Israel’s telecommunications market Source: Israeli MoC 2005 – NIS 23.2 B

Competition  Market is rough on new entrants & small players  ILD – x-fone 018 / Netvision’s 017 and also 015  ISP – many micro ISP’s who never expanded * Partner is the only independent cellular player / Eurocom was a co-founder / excellent working relations Internet Access (k subs) Internet VAS Residential Internet Business e-Advertising (US$ M’) e-Commerce (US$ M’) DATA ILD (m’ $) incl. hubbing Fix telephony (VOB) Cellular * Multi Channel TV Radio stations Residential Comm. Equip. Satellite services Relative strength Smile Group Related companies

Leveraging Strong Positioning Access Services Major market share in a stable market Stronger emphasis on biz sector VoIP/VOB/TDM Telephony Two strong brands to drive growth in market share Commercial penetration of domestic VoB Online Advertising We expect our advertising revenues will grow as media budgets continue to shift to the Internet Efficient merger = 3… Significant savings on opex / capex Efficient management of the two brands Conservative estimation of 50-60M NIS/yr savings* *Run-rate following completion of operational merger

1 + 1 = 3 Multiple Synergies between the two companies  Global data networks  Roaming services  Call centers  Fixed domestic telephony  Pre/post paid cards  TDM platform  Value Added Services  Biz services  Hi level integration  Hi level data security  Dealer network  e-Media & e-Commerce

The Merged Company: A Communications Powerhouse Revenues % 1,150 EBIT ** % EBITDA ** % Employees (March 31) 1,6592,039Synergy Q F/Y * * company’s goals for the 1st full year of merged communications operations ** Non-GAAP EBIT & EBITDA - excluding non-cash amortization with respect to the 012 acquisition. *** 2006 figures are on a pro-forma basis communications activities only In NIS millions Q %YoY + ***

Leveraging state of the art telephony infrastructure To drive further growth  Most sophisticated VoIP platform  World class TDM platform  Auxiliary platforms (anti-fraud / billing / CRM etc.) ILD – growing in volume and revenue terms International voice traffic from Israel - up 9.1% in 2006 vs (Source: Israeli MOC) International voice revenues for H up 3% vs. H (Source: IDC) cash generator

State-of-the-art telephony infrastructure  Solid investment in class 5 fixed telephony  No further significant investments required  Auxiliary platforms (anti-fraud / billing / CRM etc.) Fixed telephony  Total fixed telephony market in Israel - NIS 5.3B in 2005  SCL received a VOB license during February  012 currently have only ~ 17k subscribers’ lines  Our goal ~ 5% market share of this significant segment within 2-3 years  Future marketing to rely on existing customer base of ~ 800 k subscribers additional growth driver

2006/2007: Growth of Online Advertising continues Source: PWC IAB Internet Advertising Report, Sept. ‘05 US Internet Advertising CAGR = +26% Source: Market surveys & IGLD estimates & company's estimates Israel Internet Advertising CAGR = +48% * * Q3/06 - Media market affected by war conditions in US$ billions in US$ millions estimated Israel’s broadband penetration is among the highest in the world ~70% of Israeli households have Internet access ~ 95% are connected via broadband! >40% of users are online >10 hours per week. 2.7M users per day! Israel’s online ad budgets are low compared to exposure – ad budgets always follows rating Internet Advertising in Israel is currently > 6-7% of overall media spending (~ $900M in 05’) - growing fast SEARCH - additional growth potential: US search revenues - 40% of total e-Adv. much higher than in Israeli market

Smile.Media – Content & Portal Brands Property IGLD’s ownership Description msn-Israel 50.1% SML (49.9% MS Corp.) Hebrew language portal Messenger, Hotmail Israel & MSN Search Israel start100% General portal & Search engine nirshamim100%Academic portal zahav.ru100%Russian language portal V-games100% Games content portal TheMoney100% Lead-generation financial portal tipo52%Children’s portal seret51% Cinema portal yahala51%Arab-language portal Radius100FM50%Leading Israeli radio station portal SML Network Exclusive marketing rights E-advertising network in 4 portals netex Search engine & directory goopYouth portal

Leading e-Commerce Brands PropertyIGLD’s % Description P %  One of Israel’s top 4 e-Commerce sites  Outlet for >100 of Israel’s largest consumer product suppliers  Growing revenues, positive EBIT  Low-risk commission model with fulfillment directly from suppliers LMT 50%  Leading Israeli on-line travel site getprice 51%  Leading Israeli price comparison site dbook 50%  Leading Bookstore Paid content marketing rights  Online magazines, newsletters, recruitment & jobs search and other content services

Revenues NIS in millions EBIT Quarterly Growth NIS in millions Two pure-play subsidiaries ** Presented on carve-out basis with respect to group’s reorganization * Non-GAAP EBIT - excluding non-cash amortization with respect to the 012 acquisition.

Revenues NIS in millions EBIT Two pure-play subsidiaries Annual Growth * Ebitda goal for 2007 ~ 300 / estimate for finance exp. ~ 40 *** Presented on carve-out basis with respect to group’s reorganization **Non-GAAP EBIT - excluding non-cash amortization with respect to the 012 acquisition.

Balance sheet overview As of March 31,2007 Total assets 1,455 Total liabilities 1,178 Total shareholders’ equity 277 in us$ millions Total Debt Short-term 366 Total Debt Long-term 436 Total finance Debt (including NIS 165M convertible bonds) 802

Comparables Interesting market opportunity… KCSA to send new slide

Goal: to become Israel’s Leading Full Suite Alternative Service Provider Technology Value added services VoB & business integration VoWi-Fi / Wi-MAX IP seamless mobility IPTV e-Commerce & paid content International Long Distance (ILD) & Internet Access Portals & e-Advertising

Strong Shareholders / Dedicated Management  Public ~ 42% (updated May 20, 2007)  Eurocom Communications ~ 58% Focused, communications-oriented controlling parent group Leading Israeli private communications group representing exclusively Nokia, Panasonic, GE and more Also holds equity in radio stations, DBS TV service provider, satellite communications, cellular and more  Closely-knit, results-oriented management team Most all level of management grows from within Experienced upper level management

Investment highlights Leading Communications Group Today: controls 1/3 of its markets with a continuously growing market share Tomorrow: entering new markets Positioned to lead rapidly growing media markets over 30 portals & e-Commerce sites High rate of market growth Working from strong cash generating platform All activities in both companies are major cash generators Merger anticipated to save ~ NIS 50-60M in exp/inv No difficulty in servicing loan (fin. exp. ~15% of Ebitda) Proven management & ownership Both company's management teams, working together with Eurocom (as controlling shareholder), have proven capable of carrying out aggressive growth / leadership strategies Thank you!