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NASDAQ GM / TASE – 100 INDEX symbol: IGLD

Internet Gold Leading Israeli communications and Interactive media Group. NASDAQ GM / TASE – 100 INDEX symbol: IGLD. Eli Holtzman, CEO Doron Turgeman, CFO Q4 2006. Forward-Looking Statement.

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NASDAQ GM / TASE – 100 INDEX symbol: IGLD

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  1. Internet Gold Leading Israeli communications and Interactive media Group NASDAQ GM / TASE – 100 INDEX symbol: IGLD Eli Holtzman, CEO Doron Turgeman, CFO Q4 2006

  2. 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.

  3. History • April 92’ - Euronet Golden Lines when Communications market starts liberalization process. 1st line of activity – Audio text. Terminated after 2 yrs. • 1993 - EDC - Euronet Digital Com. – private data lines via satellite • - EIC - Euronet Int’l Com. – limited service via call back • - EDC / EIC terminated ~ 1996 • Jan 96’ – commence ISP service • Aug 99’ – leading Israeli ISP. Public on NASDAQ • 2000 – subsidiaries - GoldMind / GoldTrade / IGI / MSN Israel • Q1 2000 – 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 05’ – Dual listed on TASE (Dec. 06 – enters TA100 index) • Jan 06’ – re-org & re-brand to Smile - GT => SCL / GM => SML • Aug. 06’ – acquisition of 012 Golden Lines from the Fishman Group • January 2007 – 012 deal closing. Actual merger starts

  4. Corporate Structure

  5. Committed to growth…2007 - crossing the 250 M$ revenue line Primary drivers: 2006 • Build-out of InternationalVoIP Telephony services • Expansion of InternetAdvertising • Expansion of BusinessServices • 012 acquisition to be completed and operations to be consolidated - Q4/06 2007 • 1st full year of the merged operation • Continued growth expected in all lines of business (under both ‘smile’ and ‘012’ brands) in us $ millions Organic CAGR = +20% M&A CAGR = +47% * post-merger

  6. Israel’s telecommunications market In US$ Billion 2005 total – US$ 5.3 B Source: Israeli MoC

  7. Business Overview and Strategy cont. Relative strength Relative strength Relative strength Market share % * company’s estimates • 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

  8. 2006/07: Leveraging Strong Positioning

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

  10. Rationale for the 012 acquisition communications activities only In US$ millions 2006* F/Y - 2007** Total SCL * unaudited ** company’s goals for the 1st full year of merged communications operations

  11. = cash generator ILD – growing in volume and revenue terms International voice traffic from Israel - up 9.1% in 2006 vs. 2005 (Source: Israeli MOC) International voice revenues for H1 2006 up 3% vs. H1 2005 (Source: IDC) 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.)

  12. 072 - additional growth driver Fixed telephony • Total fixed telephony market in Israel - US$ 1.2B in 2005 • 012 currentlyhave only ~ 15k 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 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.)

  13. * 2006/2007: Growth of Online Advertising continues Israel Internet Advertising CAGR = +38% 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 (~ $900M in 05’) - growing fast SEARCH - additional growth potential: US search revenues - 40% of total e-Adv. much higher than in Israeli market in US$ millions * Q3/06 - Media market affected by war conditions Source: Market surveys & IGLD estimates US Internet Advertising CAGR = +19% in US$ billions estimated Source: PWC IAB Internet Advertising Report, Sept. ‘05 & company's estimates

  14. Smile.Media – Content & Portal Brands

  15. Leading e-Commerce Brands

  16. Two pure-play subsidiaries Quarterly Growth Revenues EBIT US$ in millions US& in millions

  17. Two pure-play subsidiaries Annual Growth US$ in millions Revenues EBIT * Ebitda goal for 2007 ~ 71 / estimate for finance exp. ~ 9.5

  18. Effective Balance sheet overview* in US$ millions * Post bonds issuance

  19. Comparables Interesting market opportunity… KCSA to send new slide

  20. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1996 Goal: to become Israel’s Leading Full Suite Alternative Service Provider IPTV IP seamless mobility VoWi-Fi / Wi-MAX VoB & business integration Technology Value added services e-Commerce & paid content Portals & e-Advertising International Long Distance (ILD) & Internet Access

  21. Strong Shareholders / Dedicated Management • Public ~ 37% • Eurocom Communications ~ 63% • 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

  22. Investment highlights Thank you!

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