Independent Assurance Statement

To the Management of Telefónica O2 UK

We have been asked to review Telefónica O2 UK (O2) Corporate Responsibility Report 2008 (the Report) in order to provide assurance on its contents.  The Report is available at www.o2.com/cr 2008, 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 any such 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 (2003) and the International Federation of Accountants’ ISAE3000 .  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. Interviews with a selection of O2 management and functional staff at O2 headquarters to understand the current status of corporate responsibility activities and progress made during the reporting period.
2. Reviewing the data processes used to collect and report the KPIs submitted to Telefónica Group and incorporated into the Report by reviewing
   - selected underlying documents for the data entered in the Credit 360 reporting tool and
   - selected testing of the application and consistency of calculation methodologies used.
3. Testing the scope and balance of the information contained in the Report against material corporate responsibility issues highlighted  from Ernst & Young’s review of:
   - internal documents such as Board papers, Governance Committee papers and Corporate Responsibility Forum minutes and papers
   - interviews with selected O2 management
   - a selection of external media sources relating to O2’s management of corporate responsibility issues
   - selected outputs from internal and external stakeholder engagement on O2’s corporate responsibility performance

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 review of outputs of stakeholder dialogue provided to us by O2.
- testing the scope of the Report against issues reported on by O2’s peers.

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 information O2 management use to form judgements in respect of the topics covered in the Report. 
We have reviewed information or explanation for a limited number of material statements on O2’s corporate responsibility activities presented in the Report and we are not aware of any misstatements in the assertions made.
We have reviewed the collation of the data and are not aware of any errors that would materially affect the aggregated data presented in the Report.

Responsiveness
Has O2 responded to stakeholder concerns?
We are not aware of any issues highlighted in the outputs of stakeholder dialogue 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 2008.

Our assurance team
Our assurance team has been drawn from our 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, 30 June 2009