The Company has consolidated the improvement of its quarterly returns in all regions and,

between January and September, has recorded year-on-year growth rates of +10.7% and

+19.6% in OIBDA and operating income, respectively.

 The Company's earnings per share mark a turning point and rise to 0.98 euros per share

in underlying terms (0.36 euros in the third quarter), picking up significantly from the

previous quarters.

 The greater cash generated in the third quarter (€ 2,541M, € 4,268M since January) and

the execution of the divestment programme and asset portfolio management, including

events following the close of the quarter, have enabled almost 5,500 million euros to be

trimmed from its net financial debt since the end of June to 52,823 million euros. This is

in line with the Company's objective to cut the leverage ratio (net debt over OIBDA) to

2.35 times by the end of the year.

 Thanks to an active financing policy (€ 13,000 million so far this year), Telefónica has

already covered its debt maturities until after 2014, with a net liquidity position of

€18,000 million.

 The revenue generated by Telefónica Latin America exceeded for the first time in history

the weighting of revenue from operations in Europe and now represent 49% of the

Company's total turnover, which has remained stable at 46,519 million euros. Both Latin

America (+5.9%) and mobile data (+14.2%) continue to be growth drivers for the Group.

Both aspects underline the value of diversification as Telefónica's strength.

 In the first nine months of the year, the greatest efficiencies stemming from the

transformation initiatives and from the benefit of Telefónica's scale have driven OIBDA to

15,782 million euros. The operating result has reached 8,009 million euros.

 In operational terms, 78% of the Group's clients are mobile accesses, amounting to 246

million (+6%), supported by the sustained growth in contract users (+7%; especially in

Latin America, +12%). Mobile broadband access has grown at solid rates of +40% yearon-

year and already accounts for 47.7 million accesses. In Telefónica's European

Madrid, 7 November 2012 operations, one third of mobile clients are already using mobile broadband thanks to the

increasing adoption of smartphones.

 The Company is advancing in its transformation process to become a "Digital Telco" with

major milestones such as the launch of the best convergent offer in Spain, the new IPTV

platform in Brazil and the development of new M2M services.

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