Independent Assurance Statement

We have been asked to review Telefónica O2 UK’s (O2) Corporate Responsibility Report 2007 (the Report) in order to provide assurance on its contents.  The Report is entirely produced as an ‘online resource’ which is available at www.o2.co.uk/cr2007, O2 is responsible for the collection and presentation of information within the Report. 

Our responsibility in performing this work is to the management of O2 only and in accordance with the terms of reference agreed with them.  We do not therefore accept or assume any responsibility for any other purpose or to any other person or organisation. Any reliance a third party may place on the Report is entirely at its own risk. 

What we did to form our conclusions
Our assurance engagement has been planned and performed in accordance with the Institute of Social and Ethical Accountability’s AA1000 Assurance Standard and the International Federation of Accountants’ ISAE3000 ¹ .  The AA1000 Assurance Principles of Materiality, Completeness and Responsiveness have been used as criteria against which to evaluate the content of the Report.

Our review consisted of the activities outlined below:

1. Visit to O2 ‘s Slough Offices to review the systems and processes in place for managing corporate responsibility issues and to review evidence in support of selected claims made in the O2 corporate responsibility Report. 
   
2. Reviewing the data processes used to collect and report  Safety,  Environmental, Social Investment and Human Resources data and testing supporting documentation for selected data points.
   
3. Testing the scope and balance of the information contained in the Report against:
   
   Internal documents such as Telefónica Europe Board papers, Governance & Risk Committee papers, Risk and Reputation minutes, Corporate Responsibility Forum minutes and issues raised through Telefónica Europe stakeholder dialogue process.
   
4. Test the consistency of selected claims made in the Report regarding O2’s CR performance against the evidence obtained through our work.

Level of Assurance
Our evidence gathering procedures have been designed to obtain a limited level of assurance on which to base our conclusions. The extent of evidence gathering procedures performed is less than that of a reasonable assurance engagement (such as a financial audit) and therefore a lower level of assurance is provided.

The limitations of our review

Our review did not include:

• Conducting external stakeholder dialogue activities.  Therefore, our conclusions on materiality and responsiveness are based on the stakeholder issues raised through Telefónica Europe’s stakeholder dialogue and media commentary provided to us by O2.
  
• Testing the scope of the Report against issues reported on by O2’s peers.
  
• Assessment of the application of GRI G3 Guidelines

Our conclusions
Based on the scope of our review our conclusions are outlined below:

Materiality
Has O2 provided a balanced representation of material issues concerning O2’s corporate responsibility performance?

• We are not aware of any material aspects concerning O2’s corporate responsibility performance which have been excluded from the report.

Completeness
Does O2 have complete information on which to base a judgement of what is material for inclusion in the Report?

• We are not aware of any material issues excluded or misstatements made in relation to the risk and reputation information provided to the Corporate Responsibility Forum on which judgements on the content of the Report are made. 
  
• We have reviewed a sample of the statements on O2’s corporate responsibility activities presented in the Report and we are not aware of any misstatements in the assertions made.
  
• With the exception of the gaps and assumptions noted against the data which affect data quality, we are not aware of any other issues that would materially affect the aggregated data of O2.

Responsiveness
Has O2 responded to stakeholder concerns?

• We are not aware of any issues highlighted in the review of stakeholder concerns provided to us by O2 that are not currently included in the Report’s scope and content. 

Our independence
As auditors to Telefónica Group, Ernst & Young are required to comply with the independence requirements set out in the Institute of Chartered Accountants in England & Wales (ICAEW) Guide to Professional Ethics. Ernst & Young’s independence policies, which address and in certain places exceed the requirements of the ICAEW, apply to the firm, partners and professional staff. These policies prohibit any financial interests in our clients that would or might be seen to impair independence. Each year, partners and staff are required to confirm their compliance with the firm’s policies.

We confirm annually to Telefónica whether there have been any events including the provision of prohibited services that could impair our independence or objectivity. There were no such events or services in 2007.

Our assurance team
Our assurance team has been drawn from the UK corporate responsibility services team.  All members of the team are experienced in social, ethical and environmental assurance having worked on similar engagements for a number of significant UK and international businesses.  
 
Ernst & Young LLP
London, 1st July 2008

¹ International Standard for Assurance Engagements Other Than Audits or Reviews of Historical Financial Information