Cellcom Israel Ltd. has entered into an agreement with Pelephone Communications Ltd. and Golan Telecom Ltd. for the construction and operation of a shared 4G radio network, an agreement with Pelephone for the sharing of passive elements of cell sites for existing networks and an indefeasible right of use, or IRU, agreement with Golan, regarding the company's 2G and 3G radio networks. The three operators will cooperate in obtaining frequencies for the 4G network. The 4G radio network is to be constructed and operated by a separate, newly created entity that will be equally owned by the Company and Pelephone and overseen by a steering committee comprised of representatives of all three operators and which shall make the strategic decisions regarding the 4G network by majority vote.

Each operator will be required to purchase and operate its own core network. Costs shall generally be divided equally among the three operators, subject to certain conditions and limitations set in the agreement. The agreement is generally for a period of at least fifteen years.

The newly created entity, equally owned by the company and Pelephone, will manage and maintain all of the passive elements of cell sites and unify passive elements of cell sites of the company and Pelephone, currently used for the 2G and 3G networks and will also manage and maintain the radio networks for the company and Pelephone, generally for a period of at least fifteen years. Costs shall be divided generally between the company and Pelephone, subject to certain adjustments. Each operator shall bear its own costs for such services and will continue to operate its own core network.

Golan will be granted aright of use to the Company's 2G and 3G radio network, which will be replacing Golan's current national roaming agreement with the company. Golan shall continue to operate its own core network. Effectiveness of the agreements are all subject to the approval of the Ministry of Communications and the Israeli Antitrust Commissioner to all the agreements.

The company expects the sharing agreements, if will be executed, to result in substantial operating expenses and CAPEX savings to the company, dependent on the amount and terms of passive cell site sharing that the newly created entity succeeds in accomplishing and the 4G radio network roll out.