B Communication — Capital/Financing Update 2016

Feb 1, 2016

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B Communications’ update with respect to its ownership interest in Bezeq

Ramat Gan, Israel - February 1, 2016 - B Communica t ions Ltd. ( N ASDAQ Global Select M arket and TASE: B COM) (the “Company ” ) announces the followi n g update w i th respect t o its owners h ip interest in Beze q The Israel T elecommu n ications Cor p . Ltd. (“Be z eq”):

As part of the Co m pany’s acq u isition of t h e controlli n g interest i n Bezeq, th e Company, its parent compan y , Internet G o ld - Golde n Lines Ltd., two of its s u bsidiaries, B Communic a tions (SP1) Ltd. and B Commu n ications (S P 2) Ltd. an d other me m bers of the Eurocom G r oup, (toget h er the “Par t ies”) were granted a Control P ermit, purs u ant to the I sraeli Com m unications Law and C ommunicati o ns Order. Accordi n g to the Co n trol Permit, the Parties m ust hold no t less than 3 0 % of any ty p e of “mean s of control of Beze q . However, a ccording to Article 3(a3) of the Co m munication s Order, whi c h is include d as part of the Con t rol Permit, t he Parties m ay hold less than 30% under certai n circumsta n ces, includi n g that the Parties c ontrol Beze q and mainta i n at least a 2 5% owners h ip interest i n Bezeq.

Accordi n gly, the Pa r ties are entitled to sell a p ortion of t h eir Bezeq s h ares to the extent they w ill retain at least 25 % of the out s tanding Bezeq shares, a n d no amend m ent to the C ontrol Per m it or the In d enture (the “Indent u re”) govern i ng the Com p any’s 7⅜% Senior Secu r ed Notes (t h e “Notes”) i s necessary or required in order for the B-C o m Group to sell Bezeq s h ares in exc e ss of their 2 5 % holding i n Bezeq.

Accordi n g to the ter m s of the In d enture, the n et proceeds of Bezeq sh a res held by t he Compan y and/or its subsidia r ies SP1 an d SP2 (toget h er, the “B- C om Group ” ) which wi l l be sold p u rsuant to th e terms set forth in the Indentu r e will be d e posited int o the Comp a ny’s “Lock b ox Accoun t ” and subj e ct to other customa r y condition s and coven a nts relating t o asset sales and release of liens on s o ld assets. The Co m pany is ev a luating its o ptions and will compl y with the terms of the C ontrol Per m it and the Indentu r e and is currently exami n ing a poten t ial executio n of a sale tr a nsaction, de p ending, am o ng others, on mark e t condition s .

“We see the abovementioned situation in a very positive light and as an improvement for our financial flexibility. We intend to continue to focus on our efforts to improve our debt and equity metrics. We will move forward to our next phase and will try to take advantage of this situation, by executing one selling transaction” said Doron Turgeman, CEO of B Communications.

About B Communications Ltd.:

B Co m munication s is a h o lding com p any with a controll i ng interes t in Israe l ’s largest telecom m unications provider, B ezeq, Th e Israel Telecommunic a tion Corp. (TASE: B EZQ). B Commu n ications sh a res are trad e d on NAS D AQ and th e TASE un d er the symb o l “BCOM. ” For more informa t ion please v i sit the follo w ing Interne t sites:

www.bcommunicati o ns.co.il www.ir. b ezeq.co.il www.eu r ocom.co.il www.ig l d.com

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 B 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:

Idit Cohen – IR Manager

idit@igld.com /Tel: +972-3-924-0000

Investor relations contacts:

ISRAEL

Hadas Friedman – Investor Relations Hadas@km-ir.co.il /Tel: +972-3-516-7620

INTERNATIONAL

Philip Carlson / Brad Nelson – KCSA bcom@kcsa.com / Tel: +1-212-896-1233 / 1217