Telefónica España resumed IPTV subscriber growth in 2Q09

Thursday, July 30th, 2009
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MADRID — Telefónica (Madrid and NYSE: TEF) has released its second quarter 2009 results. Revenues in the first half of 2009 stood at 27,588 million euros, showing a solid year-on-year growth of 1.4% in organic terms.

Pay TV accesses reached 2.4 million by the end of June, almost 19.4% more than a year ago. The Company now has pay TV operations up and running in Spain, the Czech Republic, Peru, Chile, Colombia, Brazil and Venezuela.

Accesses (thousands):

                    January - June
          ------------------------
             2009     2008   % Chg
          -------  -------  ------
Pay TV    2,421.6  2,028.0    19.4

Telefónica España (Spain)

Telefónica’s estimated share of the pay TV market exceeded 14% at the end of June 2009. In the first half the company registered a net loss of 2,960 Pay TV accesses, with a total of 609,534 pay TV customers at June end (+5.7% year-on-year). Performance improved in the second quarter, with positive net adds of 4,715 customers.

Accesses (thousands):

                                    2008                  2009
         -------------------------------  --------------------
              June  September   December      March       June  % Chg y-o-y
         ---------  ---------  ---------  ---------  ---------  -----------
Pay TV       576.6      589.6      612.5      604.8      609.5          5.7

Telefónica Latinoamérica

In the pay TV business, Telefónica Latinoamérica now has almost 1.7 million customers (+24.1% year-on-year), with 138,903 net adds in the first half of 2009.

Accesses (thousands):

                                        2008                  2009
             -------------------------------  --------------------
                  June  September   December      March       June  % Chg y-o-y
             ---------  ---------  ---------  ---------  ---------  -----------
Pay TV         1,353.6    1,460.5    1,540.5    1,615.1    1,679.4         24.1
  Brazil         346.9      426.1      472.2      502.4      514.3         48.3
  Chile          240.8      250.9      263.0      262.8      267.6         11.1
  Peru           653.2      646.0      654.5      680.9      703.2          7.7
  Colombia       112.6      137.5      142.3      145.6      143.8         27.7
  Venezuela        0.0        0.0        8.5       23.4       50.4         n.s.

Telesp (Brazil)

Telesp managed 15.6 million accesses at the end of June 2009, virtually unchanged from June 2008. Telesp continued to add broadband and TV accesses in the first half of 2009, focusing on service bundling as a value driver. The Company managed 2.7 million broadband accesses at the end of June 2009, a year-on-year increase of 18.8%.

Pay TV accesses grew 48.3% compared with June 2008 to over 514,300 with net adds of 42,123 accesses in the half year.

Telefónica Chile

Telefónica Chile managed 3.1 million accesses at the end of June 2009, virtually unchanged from June 2008. The broadband business performed better in the second quarter, with net adds of 23,743 accesses in the first half of the year, reaching a customer base of 740,305 which grew 8.9% year-on-year to June.

The number of pay TV accesses stood at 267,648, up 11.1% year-on-year.

Telefónica del Perú

Telefónica del Perú continued to post a good commercial performance across all its services and managed 4.6 million accesses at the end of June (up 7.9% year-on-year). Especially noteworthy was the performance of the broadband business, which added 46,553 new accesses in the half year (25,965 in the second quarter), bringing its total customer base to 744,971 (+18.9% year-on-year).

TV accesses advanced by 7.7% year-on-year to 703,239 and fixed wireless accesses by 74.8%.

On July 13, 2009, Telefónica announced the launch of a pre-pay cable TV service, Cable Mágico Prepaid, in Peru.

Telefónica Telecom (Colombia)

Telefónica Telecom managed 2.8 million accesses at the end of June 2009, in line with the customer base in June 2008. The Company had 427,819 broadband accesses (+45.5% year-onyear), with net adds of 33,948 accesses in the half year and 143,828 TV accesses.

Telefónica Venezuela

Operating cash flow (OIBDA-CapEx) increased by 38.8% in local currency from the first half of 2008 to 753 million euros, despite a doubling of investment vis-à-vis the first six months of 2008 due to the rollout of the GSM and 3G network and satellite pay TV service.

Telefonica Europe

Telefónica O2 Czech Republic

At the end of June, the total number of accesses for Telefónica O2 Czech Republic, including Slovakia, stood at 8.1 million, an increase of 3.0% year-on-year. Fixed telephony accesses amounted to 1.8 million at the end of June 2009.

The total number of O2 TV customers reached 132,639 at the end of June (up 35.5% year-on-year).

Accesses (thousands):

                                        2008                  2009
             -------------------------------  --------------------
                  June  September   December      March       June  % Chg y-o-y
             ---------  ---------  ---------  ---------  ---------  -----------
Pay TV            97.9      108.1      114.5      127.8      132.6         35.5

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