Cellcom Israel : Periodic Report For The Period Ending June 30 2023

Convenience translation into English of Cellcom Israel Ltd.'s Periodic Report for the period ending June

30, 2023 filed with the Israeli Securities Authority, on August 10, 2023

Cellcom Israel Ltd.

PERIODIC REPORT FOR THE PERIOD

ENDING June 30, 2023

Table of Contents

Chapter A Changes and updates that occurred in the Company's business during the reporting period and thereafter in matters that are required to be described in the Periodic Report

Chapter B Board of Directors' Report on the Company's State of Affairs

Chapter C Financial Statements as of June 30, 2023

Chapter D Report regarding the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to regulation 38C(a) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970

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Chapter A

Changes and updates that occurred in the Company's business during the reporting period and thereafter in matters that are required to be described in the Periodic Report - Update to Cellcom Israel Ltd.'s Periodic report for the year 2022 (Reference No.: 2023-01-025194) ("The Company" and "Periodic Report", respectively), as reported in the Company's periodic report for the period ending March 31, 2023 (Reference No: 2023-01-052770) ("First Quarter Report")

1. Section 8.1.4(1) - Technological changes that could affect the area of activity
2. 1. Further to the description in this section, regarding the 5G generation tender in the 26 GHz frequencies band (the "tender"), the Company updates that in July 2023, after participating in a financial cutoff procedure in the tender, the Company received a notice from the tender committee according to which, among other things, the Company won 8 cut-off bands with a bandwidth of 100 MHz each (a total of 800 MHz) (the "frequencies") at the starting price as determined in the tender. It should be noted that the extension of the license and the allocation of frequencies in accordance with the winning results, conditional on meeting the preconditions set in the tender, including the payment of license fees in the amount of NIS 4,160,000 (which is the initial price as stated) and are subject to the approval of the Israeli Minister of Communications.
   2. Further to the description in this section, regarding a hearing for the allocation of frequencies for a non-public wireless access network to an entity (that does not hold a cellular license or holds a general license to provide domestic operator services) that wishes to provide Bezeq service on a non-public network in a specified geographic area and for a specific project, the Company updates that in July 2023 the Ministry of Communications published a policy document outlining the rules for the allocation of a frequency band in the 26 GHz range (as well as a narrow band in the 2.1 GHz range) for use by entities other than cellular operators or domestic operators, for the purpose of operating private networks on a local basis (area polygon) per project. The implementation of the policy will require regulatory adjustments in the relevant legislation.
   3. Further to the description in this section, regarding a hearing that would allow third parties that are not cellular companies ("Entrepreneurs") to establish an infrastructure of radio centers (cellular sites) to be operated only by the cellular companies, the Company updates that in July 2023 the Ministry of Communications published a decision, correcting the Company's license in accordance with what was stated in the hearing. It was also determined that for the purpose of establishing and renting radio infrastructure as mentioned, the entrepreneurs will be required to obtain an appropriate license from the Ministry of Communications and to comply with conditions and limitations
3. Section 13.2.1(3) - Cellular communications
   Further to the description in this section, regarding the extension of the service period of the 2G network for subscribers with M2M equipment (Machine to Machine), the Company updates that in June 2023 the Ministry of Communications published an

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amendment to the Company's cellular license that allows the Company to continue providing service to such subscribers until December 31, 2028. In addition, as of 1.1.2027, the Company may contact the Ministry of Communications with an additional request to extend the service period for the aforementioned subscribers until 31.12.2030.

3. Section 14.5.1(2) - Rights to use frequencies in the area of cellular communications - Allocation of frequencies

Further to the description in this section, regarding with rights of use frequencies in the field of cellular communications, the Company updates that in July 2023, the Company received a notice from the Israeli Ministry of Communications and the Communications Unit of the Civil Administration, according to which the allocation of 2x5MHz frequency bands in the 1800 MHz range, which were allocated to the Company with the upon the acquisition of Golan Telecom Ltd. (a wholly owned subsidiary of the Company) until the end of 2023, for an additional period starting from January 1, 2024 until December 31, 2025, or until the closing of the 3G network, whichever comes first.

1. Section 19.3.1 - Credit and loans from banking corporations and financial corporations
   Further to the description in this section, regarding a credit facility the Company updates that on August 10, 2023, the credit facility was extended. For details see Note 19.c to the financial statement as of December 31, 2022 and Note 8.c to the financial statement as of June 30, 2023.
2. Section 19.6 - Credit rating
   Further to the description in this section, on August 6, 2023, S&P Maalot ("Maalot") decided to raise the Company's rating and the Company's debentures series to A+ with a stable rating outlook. For details about Maalot's announcement as mentioned above, see the Company's immediate report dated August 6, 2023(reference no. 2023-01- 090111), included in this report by way of reference.
3. Section 22.6.1(4) - Fiber-optic network
   Further to the description in this section, regarding the additional payment imposed on the Company and other required entities at the rate of 0.5% of their taxable income (as defined in the Communications (Telecommunications and Broadcasting) Law, 5742- 1982 and as detailed in the said section), for the incentive areas fund, which is used to participate in financing the deployment of fiber optic infrastructure in areas where Bezeq, the Israeli Telecommunication Corp. Ltd. has chosen not to deploy fiber optic infrastructure, the Company updates that in July 2023, it was published in the records of the Communications Order (Telecommunications and Broadcasting) (Annual Rate of Payment to the Incentive fund until the year 2023) (temporary Provision), 2023, according to which in 2023 the payment rate of a required entity (including the Company) to the incentive fund will be 0% of its taxable income as stated. The installation of the aforementioned order will result in savings in the Company's expenses in 2023 in the amount of approx. NIS 18 million (before tax).

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7. Section 25.1 - Material pending legal proceedings

1. Further to the description in this section, regarding the settlement agreements (in an immaterial amount) reached by the parties in requests to approve class actions filed to the Central District Court, against the Company and a subsidiary company, alleging for waiting times for the Group's call centers that are not in accordance with the Company's license requirements, the Company updates that in June 2023 a judgment was issued confirming the settlement agreements submitted by the parties.
2. On May 30, 2023 a judgment was issued by the Israeli Supreme Court (the "judgment") accepting an appeal filed against a decision on a request for approval of a class action against the Company (which was partially rejected by the Jerusalem District Court). The judgment determined, among other things, that the Company illegally increased the price of a basic plan it provided to its customers, and that the discount period was limited in time, without giving sufficient notices about the end of the discount period. Following the judgment, the class action is expected to be settled in the Jerusalem District Court. In June 2023, the Company submitted to the Supreme Court a request for further hearing in connection with the judgment.
3. Further to the judgment in June 2023, the Company received a request to approve class action, alleging that the Company charged its customers in transactions for a fixed period, without giving them sufficient notice of the price increase. This request is similar to a previous request that was filed against the Company, which is still pending.
   For more details, see Note 7 to the financial statements as of June 30, 2023.

Chapter B

Board of Directors' Report on

the State of the Company's

Affairs

June 30, 2023

44102 - 2566656/13