Telefonica posts a 22.4% increase in net profit in the first quarter to €1,538 million

MADRID — The results from Telefónica (Madrid:TEF)(NYSE:TEF) for the first quarter of 2008 highlight once again the Group’s strong organic growth, bolstering its unique differential profile in the sector, the high value of its geographic and business diversification and the integrated management of the Company.

Total accesses rose 12.9% vs. March 2007 to almost 233.5 million due to the strong growth in commercial activity in all markets. This growth was underpinned by the increase in wireless (+16.3%), broadband (+26.8%) and pay TV (+64.4%) accesses.

                  January - March
             2008      2007     % Chg
          -------   -------   -------
Pay TV    1,881.6   1,144.2      64.4

Pay TV accesses at the end of the quarter exceeded 1.8 million, 64.4% more than a year before, with operations up and running in Spain, the Czech Republic, Peru, Chile, Colombia and Brazil.

Telefónica España

Telefónica achieved an estimated share of more than 13% of the pay TV market in Spain at the end of March 2008, after adding 42,958 new pay TV customers in the quarter (35,591 in the same period of 2007). As a result, its customer base has risen to 554,045 by the end of March 2008.

                               2007
            --------------------------------------       2008      % Chg
            March       June  September   December      March      y-o-y
            -----      -----  ---------   --------      -----      -----
Imagenio    418.6      450.9      469.1      511.1      554.0       32.4

Telefonica Latinoamerica

Regarding Pay TV, Telefónica Latinoamérica already has over 1.2 million pay TV subscribers, with operations in Peru, Chile, Colombia and Brazil, compared to 700,148 customers in March 2007.

Telefónica Latinoamérica managed close to 50 million accesses in Brazil at 31 March 2008, 11.9% more than a year earlier. This growth reflects an 18.2% year-on-year increase in Vivo’s customer base, the expansion of Telesp’s broadband business (+28.2%) and the incorporation of TVA’s MMDS pay TV customers. Telesp’s pay TV business had 282,336 customers at the end of March after registering 51,429 net adds in the quarter.

At the end of March 2008 Telefónica Latinoamérica managed a total of 9.5 million accesses in Chile, 9.3% more than in March 2007, underpinned by growth in wireless accesses (+11.5% to 6.4 million), in broadband internet accesses (+22.7% to 648,120) and pay TV (+79.5% to 231,625) customers.

At the end of March 2008, Telefónica had 11.5 million accesses in Colombia, growth of 14.9% compared to March 2007, underpinned by the notable increase in broadband (+152.8%) and pay TV (x9) customers and the steady growth in its wireless customer base (+16%). Satellite TV, the centrepiece of the Telefónica Telecom’s “Trio” triple play bundle, had 93,012 customers at the end of the quarter, a sharp rise from 9,988 in March 2007, after reaching a net gain in the first quarter of 2008 of 20,082 accesses.

Total access base of fixed line business of Telefónica in Peru at the end of the first quarter of 2008 was 11.6% year-on-year higher at 4.1 million, driven by the positive evolution of the fixed telephony accesses (up 10.2% year-on-year with a quarterly net gain of 24,367 lines), broadband accesses (up 19.4% year-on-year) and pay TV subscribers to 633,410 (up 12.9% year-on-year) mainly due to the strong performance in the DTH subscriber base.

Telefónica Latinoamérica Pay TV subscribers:
Brazil     282,336
Chile      231,625
Colombia   93,012
Peru       633,310

Telefónica O2 Czech Republic

The total number of TV customers increased by 14,008 in the first quarter to reach 87,173.

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