CNMV communications

TELEFÓNICA, through its subsidiary TELEFÓNICA DE CONTENIDOS, S.A.U., has completed today the acquisition of the 22% stake in the company that brings together the pay-TV service of PRISA Group (DTS DISTRIBUIDORA DE TELEVISIÓN DIGITAL, S.A.). TELEFÓNICA´s total investment in the aforementioned acquisition is approximately FOUR HUNDRED EIGHTY-EIGHT MILLION EUROS (488 million euro), of which 228 million euro are covered by the cancellation of the outstanding amount of the subordinated loan existing between TELEFÓNICA DE CONTENIDOS, S.A.U. (creditor) and SOGECABLE, S.A. (actually known as PRISA TELEVISIÓN, S.A.U., debtor).

Telefónica, S.A. will hold a conference call with analysts at 4:00 p.m. (Madrid) tomorrow, November 11th, 2010, to announce its 2010 third quarterly financial information.

Telefónica has filed at the CNMV (Spanish Securities Exchange) a Relevant Fact announcing that according to the resolution adopted by the Annual General Shareholders’ Meeting of TELEFÓNICA, S.A., at its meeting held on June 2nd, 2010, the Company will pay on November 8th a dividend to be charged to unrestricted reserves, of a fixed gross amount of 0.65 euro for each Company share issued.

Telefónica announces that the integration of its wireline and wireless businesses in Brazil will generate total synergies with a net present value of at least 3,300 – 4,200 million euros. As previously announced, this acquisition will have a positive impact on Telefónica’s results, as well as in the cash flow generation from year one. Note that under currently effective accounting standards regarding a business combination achieved in stages (IFRS 3 Revised), at the end of the third quarter of 2010 Telefónica will recognise a gain of approximately 3,500 million euros in its income statement. In addition, Telefónica confirms that it will launch a tender offer over the voting shares of Vivo Participações, S.A., that are not held by Brasilcel and which will represent approximately 3.8% of Vivo’s equity, at the end of October. This operation is expected to be completed in February 2011. Following this tender offer the Company will further combine the activities of Telesp and Vivo Participaçoes.

Further to the Significant Event filed on July 28, TELEFÓNICA has acquired 50% of the shares of Brasilcel (company that owns shares representing, approximately, 60% of the capital stock of Vivo Participações, S.A.), owned by Portugal Telecom, today, having made a first payment, as agreed, of 4,500 million Euros. Coinciding with the closing of the transaction, the agreements signed in year 2002 between TELEFÓNICA and Portugal Telecom, in relation to its joint venture in Brazil, (Suscription Agreement and Shareholders Agreement), have been terminated. TELEFONICA confirms that it will launch a Tender Offer over the voting shares of Vivo Participações, S.A., (ONs), for a price equal to 80% of the price paid by TELEFONICA to Portugal Telecom for each voting share owned by Brasilcel.

TELEFÓNICA, S.A., through its wholly-owned subsidiary TELEFÓNICA EMISIONES, S.A.U., EMTN Programme, has launched an issue of Notes guaranteed by TELEFÓNICA, S.A. in the Eurobond market amounting 400 million sterling pounds. These nineteen (19) year Notes pay an annual coupon of 5.445% and have a reoffer price of 100%. Settlement and closing date is scheduled for execution on October 8th, 2010.

Directors and Executive Officers which are beneficiaries of the Purchase Share Plan for Employees of the Telefónica Group, in its first cycle, approved on June 23, 2009.

Today, TELEFÓNICA, S.A. has launched an issue of Notes guaranteed by TELEFÓNICA, S.A. in the Euro market amounting 1,000 million euros. These seven (7) year Notes pay an annual coupon of 3.661% and have a reoffer price of 100%.

Delivery of shares alloted to the beneficiaries for the second cycle (2007-2010) of the Performance Share Plan 2006.

Today, TELEFÓNICA has executed a syndicated facility agreement with several domestic and international financial entities in an aggregate amount up to 8,000 million euro. This Facility Agreement is divided into two tranches: the first one, a three-year term loan facility, in an aggregate amount up to 5,000 million euro and the second one, a five-year revolving credit facility, in an aggregate amount up to 3,000 million euro. The first tranche includes an option to extend the original maturity for an additional year, subject to the lenders consent. The proceeds obtained from this Facility Agreement will be used: (i) some of them, to refinance part of the TELEFONICA’s existing debt and (ii) another part of them, for the acquisition of the shares of Brasilcel owned by Portugal Telecom.

Telefónica, S.A. will hold a conference call with analysts at 4:00 p.m. (Madrid) tomorrow, July 29th, 2010, to announce its 2010 first half yearly financial information.

Today, Telefónica and Portugal Telecom have signed an agreement for the acquisition by Telefónica of 50% of the capital stock of Brasilcel, N.V. The acquisition price for the aforementioned capital stock of Brasilcel, N.V. is 7,500 million Euros, of which 4,500 million Euros will be satisfied at the closing of the transaction, 1,000 million Euros on December 30, 2010, and 2,000 million Euros on October 31, 2011, although Portugal Telecom will be able to request for this last payment to be executed on July 29, 2011, and therefore the price of the acquisition and the closing payment will be reduced in approximately 25 million Euros. This agreement establishes that the closing of this acquisition transaction will occur within a 60 days period since the signature of the agreement. On closing, agreements entered into by Telefónica and Portugal Telecom in year 2002 regarding their joint venture in Brazil shall terminate (shareholders agreement and subscription agreement).

Telefónica hereby confirms that it has reached an initial agreement with Portugal Telecom SG SGPS, S.A. for the acquisition, directly or through any of the companies within its Group, of 50% of its capital stock of Brasilcel, N.V. This agreement will be submitted for approval of the Board of Directors of both Companies, which are expected to be held today.

Further to the significant events released with regard to the binding and unconditional offer submitted by Telefónica for the acquisition, directly or through any of the companies within its Group, of 50% of the capital stock of the Dutch company BRASILCEL, N.V., Telefónica hereby informs that since the Board of Directors of Portugal Telecom, SGPS, S.A. has not accepted the Offer within its deadline, such Offer has expired.

After the Extraordinary General Shareholders’ Meeting of the Portuguese company Portugal Telecom, SGPS, S.A. held, Telefónica informs that a majority of the votes issued in the aforementioned General Shareholders’ Meeting were in favour of the approval of the offer submitted by Telefónica for the acquisition of the Portugal Telecom, SGPS, S.A.’s stake in Brasilcel, N.V., with 73.9% of the submitted votes in favour. Nevertheless, the agreement was vetoed by the Portuguese Government, invoking their rights under the so-called “Golden Share”. Telefónica believes that the veto under the “Golden Share” is illegal, as it infringes, in addition to Portuguese law, European Union Law, in particular, among others, Article 56 of the European Union Treaty. Telefónica extends the period granted to Portugal Telecom to communicate its acceptance of the offer until July 16, 2010, at 23:59h (Lisbon time).

Telefónica hereby informs that it has submitted to Portugal Telecom, SGPS, S.A. an increase in the price of the Offer for Brasilcel so that the new price would amount to Euros 7,150 million.

Telefónica, S.A. has confirmed to the Portuguese Comissào do Mercado de Valores Mobiliários that it has reduced its stake in Portugal Telecom, S.G.P.S. S.A. (“PT”) to 18,122,661 shares, representing 2.02% of PT´s share capital.

On the occasion of the Extraordinary General Meeting called by PORTUGAL TELECOM, SGPS, S.A. for 30 June 2010, TELEFÓNICA, S.A, as owner of approximately 8.51% of its share capital and in compliance with Portuguese law, has requested that an additional item be included on the agenda of said meeting, as specified in the attached proposal. The objective of this proposal is to submit a resolution to PT’s shareholders in the event that the Extraordinary General Meeting decides to accept the offer presented by TEF to acquire PT’s stake in Brasicel, N.V. and, indirectly, in Vivo Participações, S.A, to strengthen the company’s current shareholder remuneration policy through the distribution of a supplemental and extraordinary dividend in the amount of Euro 1 per share, or superior in case the PT´s Board of Directors so proposes, concerning the financial year of 2010.

The Annual General Shareholders’ Meeting of TELEFÓNICA, S.A. held today, June 2nd, 2010, with the participating of shareholders, present or represented, holding 2,583,383,562 shares representing 56.6% of the share capital of the Company, has approved by an absolute majority of votes (an average of 92.47% of the shares at the Meeting placed votes in favor) all the draft resolutions submitted by the Board of Directors for deliberation and vote by the General Shareholders’ Meeting.

Yesterday, on June 1st, Telefónica submitted to Portugal Telecom, SGPS, S.A. a binding and unconditional offer for 6,500 million euros for the acquisition by Telefónica of 50% of the share capital of Brasilcel, N.V., company jointly owned by PT and Telefónica (50% each), and which holds about 60% of the share capital of the Brazilian company Vivo Participações, S.A.. The offer was launched in the terms and conditions provided for in the Offer document, attached hereto.

Telefónica O2 Germany GmbH & Co OHG (“Telefónica O2 Germany”) has been granted two blocks in the 800 MHz spectrum at the German frequency auction. Telefónica O2 Germany also secured one block of 2.0 GHz and four blocks of 2.6 GHz. The total investment in new frequencies by Telefónica O2 Germany is 1,378,605,000 Euros.

Telefónica, S.A. will hold a conference call with analysts at 4:00 p.m. (Madrid) tomorrow, May 13th, 2010, to announce its 2010 first quarterly financial information.

Further to the significant event released with regard to the offer submitted by TELEFÓNICA, S.A. to the Portuguese company PORTUGAL TELECOM, SGPS, S.A. for the acquisition of the shares representing 50% of the capital stock of the Dutch company BRASILCEL, N.V., owned by PORTUGAL TELECOM, SGPS, S.A., it is hereby attached the text of the offer.

On May 6th, 2010 TELEFÓNICA, S.A. submitted to the Portuguese company PORTUGAL TELECOM, SGPS, S.A. a Cash Offer for the acquisition of the shares representing 50% of the capital stock of the Dutch company BRASILCEL, N.V., owned by PORTUGAL TELECOM, SGPS, S.A., for a total purchase price of five thousand seven hundred (5,700) million Euros. The Offer also contemplates that TELEFÓNICA will launch a tender offer over the ordinary shares (ONs) of VIVO PARTICIPAÇÕES, S.A., which are not owned by BRASILCEL, N.V., representing, approximately, 11.1% of the total number of ordinary shares (ONs) and 3.8% of the total capital stock of VIVO PARTICIPAÇÕES, S.A..

Further to the notice sent on April 28th, 2010, and because of the official calling of the Annual General Shareholders’ Meeting of the Company to be held on June 2nd and 3rd, 2010 (on first and second call respectively), the following documents are hereby enclosed to this report: i)Full text of the official calling ii)Full text of the proposals to be submitted for approval of the Annual General Shareholders’ Meeting. iii) Disclosures required under article 116 bis of the Spanish Securities Market Law.

Telefónica has filed at the CNMV (Spanish Securities Exchange) a Relevant Fact announcing the Board of Directors has approved to distribute an interim dividend from 2010 net income of a gross amount of 0.65 euros. The payment of this dividend shall be executed on May 11th, 2010. Additionally the Board of Directors will submit for approval of the Annual General Shareholders Meeting the distribution of a dividend with a charge to unrestricted reserves and to be paid in the second half of 2010, of a gross amount of 0.65 euros.

The Board of Directors of TELEFÓNICA, S.A., has resolved to call the Annual General Shareholders’ Meeting to be held in Madrid, at 1:00 pm on first call, or, in the event that the legally required quórum is not reached and therefore the Meeting cannot be held on first call, on June 3, 2010, at 1:00 pm on second call, at the same place.

Yesterday, TELEFÓNICA, S.A. launched an issue of Notes guaranteed by TELEFÓNICA, S.A. in an aggregate principal amount of 3,500 million US dollars.

Telefónica, S.A. filed March 26th 2010 with the U.S. Securities and Exchange Commission its annual report on form 20-F for the year ended December 31st, 2009.

Today, TELEFÓNICA, S.A., under its Guaranteed Euro Medium Term Note Programme (EMTN Programme) has launched an issue of Notes guaranteed by TELEFÓNICA, S.A. in the Euro market amounting 1,400 million euros.

Telefónica, S.A. will hold a conference call with analysts at 4:00 p.m. (Madrid) tomorrow, February 26th, 2010, to announce its 2009 second half-yearly financial information.

Telefónica, S.A. has completed today, February 16, 2010, the acquisition of the German telecommunications operator HANSENET TELEKOMMUNIKATION GmbH.

Telefónica S.A., announces the impacts on the Telefónica Group derived from its investments in Venezuela and the conclusion of the European Commission with respect to the treatment of goodwill generated from certain foreign investments.

On February 26th, 2010, and in compliance with the conditions stated in the Prospectus for the Debentures Issue “February 90 C” (ISIN code number ES0278430659), registered with the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) on February 1st, 1990, the 12,511 debentures of the Issue will be totally redeemed through the repayment of the 100% of their nominal value of Euros 300.51 each.

On February 26th, 2010, and in compliance with the conditions stated in the Prospectus for the Debentures Issue “February 90 F Zero Coupon” (ISIN code number ES0278430683), registered with the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores) on February 1st, 1990, the 4,671 debentures of the Issue will be totally redeemed through the repayment of the 1,069.47 % of their nominal value of Euros 300.51 each.

At the Italian Commissione Nazionale per le Societá e la Borsas request, with reference to the article published in an Italian daily financial newspaper today regarding the ownership arrangements for TELECOM ITALIA, TELEFÓNICA wish to make clear that the news it refers to is without foundation.

After all the information published these days about the Venezuelan Bolivar devaluation, Telefónica S.A. reiterates its short and medium term guidances and its dividend targets until 2012.