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As of 13 May, Telefónica had completed 35.7% of its share buyback programme thanks to the company’s increasing cash generation enabling it to step up the programme

• Organic growth in revenue (+7%), OIBDA (+8.2%) and OI (+17.2%) underscores the improvement in Telefónica’s efficiency and profitability ratios, underpinned by the Company’s high level of diversification and integrated management
  
• The strong growth in commercial activity over the first quarter drove a 13% increase in the customer base to 233 million accesses (171 million wireless, 10.8 million broadband and 1.8 million TV accesses)
  
• The Company posted strong cash flow generation, with operating cash flow (OIBDA-CapEx) of 4,057 million euros in the year’s first quarter
  
• Telefónica Spain continues to drive sector growth, with like-for-like increases in revenue and OIBDA of 2.6% an 6.4%, respectively, fuelled by improvement in the broadband business and a marked increase in wireless data revenue
  
• Telefónica Latin America delivered healthy organic growth in both revenue (12.6%) and OIBDA (11.8%) thanks to the sharp growth of the wireless business and the penetration increase of broadband and pay TV
  
• Telefónica Europe reported robust organic growth in revenue (+6.4%) and OIBDA (+5.3%), in a quarter featuring a strong commercial effort in all the markets
  
• The Company’s robust financial position is also reflected in its net debt/OIBDA ratio of 2.2x, thanks to the reduction in its debt and the increase in OIBDA. This level is in line with the Company’s established targets

The results for the first quarter of 2008 highlight once again the Group’s strong organic growth, bolstering its unique differential profile in the sector, the high value of its geographic and business diversification and the integrated management of the Company.

Total accesses rose 12.9% vs. March 2007 to almost 233.5 million due to the strong growth in commercial activity in all markets. This growth was underpinned by the increase in wireless (+16.3%), broadband (+26.8%) and pay TV (+64.4%) accesses.

By access type, the Telefónica Group’s wireless accesses topped 171 million at the end of the first quarter, with net adds of around 4 million customers. The main contributors were Brazil (839,446), Mexico (724,548), Peru (632,114) and Germany (535,994).

Retail internet broadband accesses surged 26.8% year-on-year to over 10.8 million at the end of March, driven by: the strong take-up for ADSL, TV and voice bundles, making significant contributions to developing the broadband market and forging customer loyalty. In Spain, retail broadband accesses surpassed 4.8 million (up 20.2% year-on-year), in Latin America, 5.2 million (+29.5% year-on-year) and in Europe, 800,000 (+58.4% year-on-year). Net adds in the third quarter stood at nearly 222,000 in Spain, while this figure amounted to 201,300 and 129,900 in Latin America and Europe respectively.

Pay TV accesses at the end of the quarter exceeded 1.8 million, 64.4% more than a year before, with operations up and running in Spain, the Czech Republic, Peru, Chile, Colombia and Brazil.

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