Alon Blue Square (BSI) Will Enter CEllular Communication Market by Becoming MVNO

Alon Holdings Blue Square-Israel Ltd. (NYSE: BSI) reports that further to the MOU which was signed on March 23, 2011 between Alon Cellular Ltd. controlled by the Company ("Alon Cellular") and Partner Communication Company Ltd. (Nasdaq: PTNR), as reported by the Company on 24 March, 2011, and in connection with the Company's plans to enter the cellular communication market by becoming a Mobile Virtual Network Operator ("MVNO"), Alon Cellular and Partner have entered into an agreement ("the Agreement"), for launching cellular services in an MVNO model, which will enable Alon Cellular to offer cellular services to end users. The launch date of such services shall be coordinated between Alon Cellular and Partner.

Under the Agreement, the payments by Alon Cellular to Partner (except for certain payments of immaterial amounts) shall be in accordance with the actual usage of traffic (i.e, calls, SMS's, MMS's and data) by Alon Cellular's end users, as elaborated in the Agreement.

The term of the Agreement is for 3 years, with an option of Alon Cellular to extend the term by one additional year. In addition, Alon Cellular has the option to terminate the Agreement, at any time, against payment to Partner of an immaterial amount.

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