B Communication — Investor Presentation 2014

May 29, 2014

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The Bezeq Era

Investors presentation, May 2014

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Forward-Looking Statement

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts and may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include the factors indicated in our filings with the Securities and Exchange Commission (SEC). For more details, refer to our SEC filings and the amendments thereto, including our Annual Report on Form 20-F and Current Reports on Form 6-K. We undertake no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

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BCOM’s Profile

• B Communications Ltd. (TASE and Nasdaq: “BCOM”) is a telecommunications oriented holding company which is a subsidiary of Internet Gold.

• BCOM holds the controlling interest (approximately 30.89%) in Bezeq, The Israel Telecommunication Corp. (“Bezeq”), Israel’s largest telecommunications provider (TASE: BEZQ).

• BCOM decreased its net debt from more than NIS 5 billion as of the date it acquired its controlling interest in Bezeq (in April 2010) to just NIS 2.8 billion as of March 31, 2014.

• On February 19, 2014, BCOM announced the completion of a private offering of US$ 800 million senior secured notes to fully refinance its bank and institutional debt that was incurred to acquire its controlling interest in Bezeq.

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Eurocom Group Overview

• Founded in 1979

• One of Israel’s largest holding companies with a strong presence in Israel and a growing international presence Eurocom Group overview

• • Owned by Shaul Elovitch, Chairman of the Board of Directors (80% ownership) and Yossef Elovitch, Director (20% ownership)

• Solid financial base and strategic partnerships ensure the strong backing necessary to accelerate growth

• Diversified portfolio with investments in telecommunications, media, real estate, consumer electronics and financial services

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----- Start of picture text ----- Eurocom CommunicationsTelecom Consumer Investments &Telecom Services Media Satellite Services Real EstateElectronic Products FinanceGolden Lines Ltd.Internet Gold  YES – D.B.S. Satellite Services (1998) Ltd. Communications Ltd.Space  Eurocom Cellular Communications Eurocom RealEstate Ltd. Enlight energy Ltd. (Nokia) B Communications  Walla Satcom Sys Ltd. Eurocom CapitalEurocom Digital Midtown Finance Ltd. Satlink CommunicationsBezeqCommunications Ltd. (Panasonic)Walla ShopsPelephoneEITAG Ltd.D.M. EngineeringLtd.Bezeq InternationalBezeq On-Line----- End of picture text -----

• Traded on TASE

• [Traded on NASDAQ]  Traded on TASE and AIM

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Eurocom: Israel’s Largest Communications Footprint

	Relative strengthCompanywithin thegroup
Internet access	5
Internet Services
Internet VAS residential	5
Internet business	5
e-Advertising	5
e-Commerce	5
Date Services	5
ILD	5
Fixed telephony	5
Mobile	5
Multi channel TV	5
Telecom & consumer electronics.	5
Satellite services	5

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BCOM - Experienced, Disciplined Leadership

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 Shaul Elovitch Founder & Chairman Over 30 years experience building leading communications businesses and other major investments businesses

Proven capabilities in:

• Strategy creation & strategic planning

• Marketing & brand development

• Operational & financial management

• Management of mergers & acquisitions

• Creation of partnerships

• Capital raising: 13 major transactions

  • 2 IPOs – IGLD and BCOM

  • 10 bond issues

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• $800 million Rule 144A offering

Doron Turgeman

CEO since 2011 & CFO from 2001 till 2011 19 years experience in management 17 years experience in communications

 Chairman of the board of directors of Bezeq and it’s subsidiaries

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Key Milestones for BCOM From small entrepreneurial business to large holding company

• Israeli telecom market commences privatization process

• Eurocom participates in the privatization process and forms a corporate vehicle for that purpose

• Goal: to become one of Israel’s leading telecom service providers

• 1995  Internet emerges as a major commercial service  IGLD decides to focus on ISP activities

• To  Expansion into content and Value-Added Services

• 2000  Successful listing on NASDAQ (IGLD) (TASE dual listing 2005)

• 2000  Continuous organic growth  Restructure of IGLD into a holding company owning Smile Communications and Smile Media

• to  Acquisition and merger with 012 Golden Lines to form 012 Smile Communications

• 2007  Successful IPO and listing of 012 Smile Communications on NASDAQ and TASE (SMLC)

  • Restructure of IGLD into a holding company owning Smile Communications and Smile Media

• 2007  Continuous organic growth  Crystallization of the strategy to become a leader in the Israeli telecom market

• to  Preparation for the next major M&A transaction while examining several opportunities

• 2009  Sale of legacy 012 Smile.Communications assets  Acquisition of the controlling interest in Bezeq – Israel’s telecom market leader

• 2010  From April 2010 through March 2014, BCOM decreased its net debt from more than NIS 5 billion as of the date it acquired its controlling interest in Bezeq (in April 2010) to just NIS 2.8 billion as of March 31, 2014.

• to  On February 19, 2014, BCOM announced the completion of a private offering of US$ 800 million senior

• 2014 secured notes to fully refinance its bank and institutional debt that was incurred to acquire its controlling interest in Bezeq.

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Group Structure

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----- Start of picture text ----- Eurocom Group Private~79%• M.cap (Mil. NIS) - 712Free float ~21% Internet Gold •• NAVNet debt (Mil. [(2)] (Mil. NIS)NIS)- 991- 744Golden Lines • Net debt / EBITDA – 5.12• Listed - TASE, NASDAQ~68%• M.cap (Bil. NIS) – 1.9~32% • NAV [(3)] (Bil. NIS) - 2.55Free float BCOM • Net debt (Bil. NIS) – 2.8• Net debt / EBITDA – 4.25• Listed - TASE, NASDAQ~31%~69% • M.cap (Bil. NIS) – 17.3Free float •• TTM EV/EBITDA -Net debt / EBITDA 6.3– 2.01• Listed - TASEFixed-line, broadband 100% 100%Mobile telephonyinfrastructure, data comand data100% 100% ILD, ISP,Call centreenterpriseservicessolutions~50% ~100%Pay-TV (DTH) InternetWalla!portal----- End of picture text -----

Source: Company’s information, Bezeq’s investors’ presentation.

(1) All figures are as of March 31, 2014, while Net debt of BCOM and Bezeq was adjusted for the dividend distributed by Bezeq on April 2014.

(2) IGLD’s NAV is defined as value of IGLD’s shares according to BCOM’s NAV, based on Bezeq stock price as of May 28, 2014 less IGLD’s net debt.

(3) BCOM’s NAV is defined as value of BCOM’s shares according to Bezeq market cap, based on Bezeq stock price as of May 28, 2014 less BCOM’s adjusted net

debt.

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Bezeq Overview

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Bezeq: Israel’s Most Comprehensive Communications Infrastructure and Service Provider

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----- Start of picture text ----- Bezeq GroupLevel B2013 Rev. NIS 9.bn2013 EBITDA NIS 4.13bn100% 100% 100% 49.8%¹  100% 100%Level BFixed-Line Bezeq Int’l Pelephone yes Bezeq on line Walla!Fixed-line, broadband ILD, ISP, Mobile telephony Pay-TV Call centre Internet portalinfrastructure, data com enterprise solutions and data (DTH) servicese – Commerce2013 Rev. NIS 4.48bn 2013 Rev. NIS 1.43bn 2013 Rev. NIS 3.81bn 2013 Rev. NIS 1.64bne - Advertising2013 EBITDA NIS 2.68bn 2013 EBITDA NIS 357mm 2013 EBITDA NIS 1.07bn 2013 EBITDA NIS 530mm----- End of picture text -----

¹ 50.2% held by Eurocom. Following a Supreme Court decision which prevents Bezeq from acquiring control of yes, as of August 21, 2009, Bezeq ceased consolidating yes’ s financial results and began accounting for its investment in yes according to the equity method

Listed on TASE

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Bezeq’s Results (NIS Millions)

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----- Start of picture text ----- Revenues11,37310,2789,5632011 2012 2013----- End of picture text -----

EBITDA

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----- Start of picture text ----- 43.0% 40.8% 43.5%4,6374,471 4,1302011 2012 2013----- End of picture text -----

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----- Start of picture text ----- Net income attributable to shareholders2,0741,8611,7712011 2012 2013----- End of picture text -----

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----- Start of picture text ----- Free cash flow *----- End of picture text -----

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----- Start of picture text ----- 3,2362,7791,5492011 2012 2013----- End of picture text -----

Source : Bezeq’s press release

• Free cash flow is defined as free cash flows from operating activities less net capex paymants

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Bezeq Overview

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Level B

Bezeq Fixed-Line

Pelephone Mobile telephony and data

Fixed-line, broadband infrastructure, data com

Fiscal year ending December 31CAGR2011A2012A2013A11–13Revenue4,6484,6304,478-1.85%% growth-11.7%-0.4%-3.3%EBITDA2,3462,6892,6816.90%% margin50.5%58.1%59.9%Capex937658485-14.49%% of rev.20.2%14.2%10.8%FCF11,1691,3511,78923.71%% of rev.25.2%29.2%40.0%NISmm	Fiscal year ending December 31CAGR2011A2012A2013A11–13NISmm
	Revenue5,5484,4683,809-17.14%% growth-3.2%-19.5%-14.7%EBITDA1,9211,4231,065-25.54%% margin34.6%31.8%28.0%Capex, net382381315-9.19%% of rev.6.9%8.5%8.3%FCF14181,3471,27674.72%% of rev.7.5%30.1%33.5%

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Bezeq International

	ILD, ISP, enterprise solutionsFiscal year ending December 31	ILD, ISP, enterprise solutionsFiscal year ending December 31	ILD, ISP, enterprise solutionsFiscal year ending December 31	CAGR
NISmm	2011A	2012A	2013A	11–13
Revenue	1,354	1,340	1,433	2.88%
% growth	-1.9%	-1.0%	6.9%
EBITDA	350	355	357	1.00%
% margin	25.8%	26.5%	24.9%
Capex, net	288	173	97	-41.97%
% of rev.	21.3%	12.9%	6.8%
FCF1	(44)	99	191	-
% of rev.	-3.2%	7.4%	13.3%

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• Leading provider of broadband services (ADSL/VDSL) in Israel with over 1.25 million subscribers offering up to 100 Mbps.

• FTTC, all IP, infrastructure for consumer and business customers.

• Provides customers with high speed data transmission and ultra-fast Internet services over existing copper lines and fiber.

• 2.6 million cellular customers

• HSPA (High Access Packet Speed) cellular technology offering 3.75 G speed.

• Essential to accessing higher value segments of the market.

• Strong platform for rising smartphone demand and advanced data services.

  • Leading broadband Internet service in Israel Approximately 39% Internet market share.

  • Israel’s largest data center.

  • New high- speed submarine cable system deployed between Israel and Europe.

  • Increasing bandwidth at affordable rates.

• 99% of Israeli households covered.

1 Free cash flow is defined as cash flows from operating activities less net payments for investments

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Bezeq’s Dividend Policy

distribution of 100% of its after-tax profit on a semi-annual basis

Dividend Yield from 2006 to 2013

Dividend yield (%)¹

• Based on its ownership interest, BCOM will receive ~ 31% of Bezeq’s annual dividends

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----- Start of picture text ----- 26.4%17.6%16.7%15.8%12.8%12.0%10.4% 8.1%2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013ASource: Bezeq----- End of picture text -----

• Since 2006, Bezeq has paid over NIS 20.7 billion (US$ 5.9 billion) in dividends

• Bezeq has paid all six equal special dividend payments which were declared by the Board of Directors and approved by the Israeli Court. The special dividend of NIS 3 billion in aggregate was paid on a semi-annual basis from 2011 to 2013.

¹ Based on the sum of regular and special dividends paid during the fiscal year divided by Bezeq’s market cap as of December 31.

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BCOM’s Cash Position

As of March 31, 2014, BCOM’s unconsolidated liquidity balances (including dividend receivable) totaled NIS 766 million and its unconsolidated total debt was NIS 3.45 billion.

BCOM’s Unconsolidated Balance Sheet Data As of March 31, 2014*

Debentures and loansSenior Secured NotesSeries B DebenturesTotalLiquidity balancesDividend receivable **Lockbox accountUnrestricted CashTotal	NIS millions
	2,754695
	3,449
	248204314
	766

• Does not include the balance sheet of Bezeq.

• ** The dividend was received on April 2014.

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Projection of Future Debt Repayment

(NIS millions)

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----- Start of picture text ----- 446450 434400350217205300 275250 4620120023150229 229 2291001785002014 2015 2016 2017Series $144A Debentures Series B Debentures----- End of picture text -----

• All amounts include future estimated interest payments

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Introducing the Bezeq Era

Thank you

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