B Communication — Capital/Financing Update 2008

Jul 15, 2008

BUSINESS NEWS

FOR IMMEDIATE RELEASE

“Midrug” Rating Company Reissues An A1 Rating for 012 Smile. Communications’ Series A Bonds, SMLC Will Be Able Issue Up To NIS 320M in Additional Debt At the Same A1 Rating

PETACH TIKVA, Israel, July 14, 2008 – 012 Smile. Communications (NASDAQ Global Market and TASE: SMLC), a growth-oriented provider of communication services in Israel, today announced that Midrug Ltd., an Israeli financial rating company which is affiliated with Moody's, has reissued the A1 rating originally awarded to the Company's Series A debentures that were issued in 2007. Midrug concluded that the A1 rating would continue if the Company issues new debt of up to NIS 320 million (approximately $95 million).

Copies of the complete Midrug report are available in Hebrew at http://www.midroog.co.il.

Commenting on the news, Ms. Stella Handler, CEO of 012 Smile. Communications, said, "We are proud to receive this clear vote of confidence in our company and its prospects. By enhancing our financing capability, this rating is an important step that will help us to enter Israel's mobile market and to execute our long term plan for growth."

About 012 Smile. Communications

012 Smile. Communications is a growth-oriented communication services provider in Israel with a leading market position, offering a wide range of broadband and traditional voice services. Its broadband services include broadband Internet access with a suite of value-added services, specialized data services and server hosting, as well as new innovative services such as local telephony via voice over broadband and a WiFi network of hotspots across Israel. Traditional voice services include outgoing and incoming international telephony, hubbing, roaming and signaling and calling card services. 012 Smile. Communications services residential and business customers, as well as Israeli cellular operators and international communication services providers through its integrated multipurpose network, which allows it to provide services to almost all of the homes and businesses in Israel.

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012 Smile is a 72.4 % owned subsidiary of Internet Gold Golden Lines Ltd. (NASDAQ: IGLD) one of Israel's leading communications groups with a major presence across all Internet-related sectors. In addition to 012 Smile, its 100% owned Smile. Media subsidiary manages a growing portfolio of Internet portals and e-Commerce sites. Internet Gold and 012 Smile are part of the Eurocom Communications Group. 012 Smile's shares trade on the NASDAQ Global Market and on the Tel Aviv Stock Exchange.

For additional information about 012 Smile. Communications Ltd., please visit the Company's investors' site at http://www.012.net.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in the regulatory and legal compliance environments, the failure to manage growth and other risks detailed from time to time in 012 Smile. Communications' filings with the Securities Exchange Commission. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

For further information, please contact:

Ms. Idit Azulay

012 Smile. Communications Ltd

+972 72-2003848

i.azulay@smile.net.il