Ezequiel Nieto - Head, IR Santiago Fernández Valbuena - CFO and General Manager of Finance and Shared Resources Antonio P. Viana- Baptista - Chairman and CEO Peter Anthony Erskine - Head, Telefónica O2 Europe Julio Linares López - Managing Director of Coordination, Business Development and Synergies José María Álvarez-Pallete - Head, Telefonica Latin America

Damien Maltarp - Cazenove Terence Sinclair - Citi David Wright - JP Morgan Robert Grindle - Dresdner Kleinwork Wasserstein Mathieu Robilliard - Exane BNP Paribas David George - Credit Suisse Will Milner - Arete StanleyMartinez - Legal and General Investments Management Randall Pollock - Vanguard Group Guy Peddy - Blue Oak Capital Limited James McKenzie - Fidentiis Luigi Minerva - HSBC Jonathan Dann - Bear Stearns Christian Kern - Lehman Brothers

Good afternoon ladies and gentlemen, and welcome to the Telefónica 2007 Third Quarter Results Conference Call. At this time all participants are in listen-only mode until we conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions]. Just to remind you this conference call is being recorded. I would now like to handover to the Chairperson Mr. Ezequiel Nieto, Head of Investor Relations. Please begin your meeting. And I will be standing by. Ezequiel Nieto - Head, Investor Relations: Thank you, and good afternoon, ladies and gentlemen. Welcome to Telefónica's conference call to discuss 2007 third quarter results. Before proceeding let me mention that these document contains financial information and data reported under IFRS. This financial information is unaudited, and therefore is subject to potential future modifications. This presentation may contain announcements that constitute forward-looking statements which are not guarantees of future performance and involve risks and uncertainties and actual results may differ materially from those in the forward-looking statements as a result of various factors. We want you to read the company disclaimer, including the first page of the presentation, which you will find on our website. We encourage you to review our publicly available disclosure documents filed with relevant securities market regulators. If you don't have the copy of the relevant press release and the slides, please contact Telefónica's Investor Relations team in Madrid by dialing the following telephone number 3491-584-4713. Now let me turn the call over to our Chief Financial Officer, Mr. Fernandez Valbuena, who will be leading this conference call. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Good afternoon ladies and gentlemen, and thank you for attending Telefónica's 2007 third quarter results conference call. During the Q&A, you will have the opportunity to ask questions directly to our executive committee members. And I have here today with me Julio Linares, our General Manager for Coordination, Business Development and Synergies; Antonio Viana, Head of Telefónica España; José María Álvarez-Pallete, Head of Telefonica Latin America; and Peter Erskine, Head of Telefónica O2 Europe, who is connected from London. We are keeping our distinctive growth profile in the sector at the closing of September with strong organic growth. Consolidated revenues grew by more than 8% year-on-year to reach more than €42 billion. In organic terms total sales went up by close to 8% year-on-year. Nine months operating income before D&A topped €18.2 billion up 24.5% year-on-year including €2.7 billion related to the Airwave and Endemol capital gains. Organic growth in operating income before D&A, stood at almost 7% showing the efficient cost structure and the net realization of synergies to the integrated management model. Operating income exceeded the €11.2 billion mark for the period which is equivalent to a 51% annual nominal growth rate that translates into a 19.2% organic increase. Operating cash flow ended the period over €13 billion, 38% increase year-on-year that translated in 12% purely organic. The negative impact of ForEx across the P&L during the first nine months of the year has improved compared to the first-half of the year deducting just one percentage point from the underlying performance of revenues. Please turn to slide number 4 for the bottom line and EPS reviews. Where we show that the top line growth floated directly into a very solid 51% in net income increase amounting to more than €7.8 billion in January through September period. Reported earnings per share for the nine months through September reached €1.644, 50% above last year's figure. The strength and reliability of our operating and financial performance put into value the Company's diversification which is drawn in slide number 5. Our commercial drive allowed us to end September with more than 218 million accesses at the group level, 12% above last year's figure which drove net adds across businesses and geographies to 16%, 32% and 59% customers growth rates posted by mobile, broadband and Pay TV, respectively, have to be highlighted. It is also important to mention the significant contribution from our double and triple play commercial offerings across all markets to reach €4.8 billion as of September 2007. From the regional perspective, we continue progressing well in the diversification of our asset base. Our European operations, in both Spain and Europe, represented more than 60% of the group's sales and continued to grow in the middle... in the mid-single digit territory in organic terms that despite servicing increasingly mature and competitive markets. Latin America emergence once again as the main growth engine as the regions revenues increased by almost 13% in organic terms. From a business perspective, high growth services, namely, mobile and broadband are contributing the most to organic revenue growth posting 11% and 23% growth year-on-year, respectively. Turning now to profitability, in slide number six, we show that the expansion of the cost base is trending down despite stronger commercial activity to stand just above the 7% level in the first nine months. In organic terms, OpEx growth kept below revenue increase as a result of cost optimization. Underlying margins stood at 37.2% at the end of September, 30 basis points below last year's figure but 140 basis points higher than in the first half. Organic OIBDA margins for our three regional business units range from the 26.7% posted by Telefonica O2 Europe to the healthy 47.8% achieved at Telefónica España. Please turn now to slide number 7 for a review of our regional business units starting with Telefónica España, where commercial activity, both in wireline and wireless, is driving very sound results. January to September performance remained robust led by customer growth of 5.3% to reach over 45 million accesses. Revenues increased by 5% almost topping the €15.5 billion mark and OIBDA close to 8%, total €7.4 billion. Underlying OIBDA, which excludes their redundancy program, the EU fine and the real estate plan among others, grew by 6% year-on-year. Turning to the Spanish wireline business, the commercial strategy developed by the company is proving to be successful, as slide number 8 shows. Year-over-year access lines lose in the traditional business has been kept at negative 0.7%, maintaining record low figures as in the second quarter of 2007, driven by free connection, free campaigns... fee campaigns. In Pay TV market we reached an estimated 12% share, the company leading market growth and surpassing 450,000 customers. Once again Telefónica has led the broadband market with an intense commercial effort. A new one megabyte lower entry product has been launched. At the same time one megabyte customers have been migrated to 3 megabytes becoming the new reference offer, and finally 10 megabyte too has been launched. We will keep our leadership in the market by tapping all market segments. And this has been the case in this third quarter when our estimated share of net-adds was 63% to keep our total share of the market just over 56%. Please turn now to slide number 9, for a review of the sound 3.7% revenue growth, where expanding broadband penetration is proving the key lever. Broadband penetration of the Spanish households with fixed line has grown 10 percentage points over the last 12 months to reach now 49%. Thanks to a superior quality service and a broad portfolio of value-added services offered, and double broadband connectivity, the company has been able to maintain retail broadband ARPU decline under the 1.5% level. In the highlight, the Internet and broadband revenues account for almost 90% of the revenue growth. Line loss contention together with the monthly fee increase and improving traffic trends are behind the lower revenue decline of the traditional business in this quarter versus the previous one. Please go now to slide number 10 to finalize the review of the Spanish wireline business. The slight decline in the third quarter OIBDA is explained by the higher E.R.E. provision in the third quarter of 2007 and the real estate capital gains registered Q3 of '06 for roughly €80 million. Excluding both affects, that add 1.5 and 4.5 percentage points, respectively, the underlying quarterly OIBDA growth reached 5.6%. Underlying OIBDA growth for the nine months period ending September stood therefore at 5.6%. Note that in both cases the nine month period and the third quarter underlying OIBDA growth outpaced revenue growth with this gap even widening in the third quarter, thanks to the higher efficiencies achieved. Let's now continue with our mobile operations in Spain in slide number 11 which remained focused on value growth. Third quarter '07 performance has been driven by a more intense summer campaign to contain churn among other factors. Third quarter total net-adds increased by 10% versus the previous quarter adding 317,000 customers to a total customer base that has grown 7% annually. It is worth mentioning the solid performance of the contract segment which represented close to 60% of the total base as of September 30th. Top class churn performance and the solid 13% growth of contract gross adds led to close to 342,000 postpaid customers being added in the third quarter. Despite strong competition over 59,000 contract customers were captured through a number of possibility in the July to September period. Please turn to slide number 12 to review mobile usage trends in Spain with continued strong voice and data usage. Despite intense pricing pressure on the back of aggressive competition, tougher retail roaming regulation and summer promotions quarterly outgoing ARPU remained flat. Total ARPU decline has been limited to 2% despite interconnection rate cuts as the company has fostered usage by, first, growing data with data ARPU increasing 6.3% in the quarter to account for almost 15% of total ARPU and the new data pricing schemes are boosting data traffic over nine times those of the third quarter of '06. Second, fostering in 3G take-up. By the end of September, 13% of the customers, of the customer based were 3G clients after adding 800,000 new 3G customers in the quarter to reach 2.9 million. And third roaming, our roamers growth rate was double that of the total mobile subscriber base. To finalize the Spanish mobile business review, let me comment on financials on slide 13. Service revenues showed a healthy 4.9% growth rate on a comparable basis for the nine months through September 2007, backed by the 7.2% advance in customer revenues benefiting from the sound 6.7% customer base growth. Interconnection revenues declined by 3.1% on a comparable terms, the second termination rate cut in the last 12 months is fully affecting the third quarter revenues. Despite the sharp cut in roaming prices, new initiatives limited the roaming revenue dropped to 14% year-on-year. OIBDA growth remains unchanged at the 7% level with margins improving slightly to 45.8% on efficiency improvements. Let me now continue with a review of our Latin American properties on slide number 14. A strong commercial activity and price declines have strongly pushed up both mobile penetration, over 11 percentage points, and usage in the region. In this context Telefónica Latin America is proactively accelerating the transformation of its wireline operations. Let me further develop this topic in the next slide. During the quarter, customer growth accelerated by one percentage point from the second quarter growing by almost 15% to reach 127 million accesses. This strong operating performance explained the solid revenue evolution that increased almost 11% year-on-year in currency rates. Operating income before D&A expansion exceeded the 10% mark and the operating cash flow reached €3.4 billion for the January to September period, an 11% increase in constant currency in comparison with the nine months of '06 figure. Revenues and operating income before D&A performance across the different countries are shown on slide number 15. At the top-line level almost all countries grew during the first nine months of 2007 in double-digit terms with only exception of Brazil and Ecuador both posting single-digit growth. In terms of operating income before D&A, most of the countries showed a positive performance. Brazilian operating income before D&A declined by 0.4% excluding the one-off impact of PIS/COFINS during Q3 '06, as the significant improvement of the VIVO is not sufficient to offset lower profits at LSE, which are impacted by higher bad debt provisions, lower traditional business revenues and higher workforce restructuring costs. Mobile operating income before D&A growth in Peru was not enough to compensate the lower revenues in the wireline division putting some pressure on the total country operating income before D&A. To me, further develop our view on how we are accelerating the transformation of our wireline operations is in slide number 16. Progress on broadband development is key for our strategy, both foster and bundles and increasing broadband speeds to enhance the use of the value added services. During the third quarter broadband net adds grew by 8.3% annually to surpass total retail connections 4.7 million mark as of September, up 24% year-on-year. Let me highlight Colombia where we have increased our broadband connection by almost four times. Pay TV customers went up by 53% year-on-year. DTH represents, already, over 37% of the Pay TV base, with this product offered now in four countries after the recent launch in Brazil. Pay TV is enabling us to offer triple play solutions that are shown to be key to limit the planned erosion and keep our market share. Let's now continue on slide 17 with the performance of VIVO. VIVO's biggest distribution network allowed us to carry on with a strong commercial activity during the third quarter of '07 with a focus in value and GSM. GSM accounted to... for close to 80% of the total customer adds in the quarter with 22% of the client base now already using this technology. Churn evolution has been very positive during the first nine months of the year and nearly 0.6 percentage points versus the first nine months of '06 and doubling net adds despite only increasing gross adds by 25%. Hence VIVO's customer base expanded by 9% year-on-year topping 31.3 million. These strong fortunes [ph] and value can be seen in ARPU evolution which posted an annual growth of 8.9% excluding the Bill & Keep effect. As a result service revenue in the first nine months of the year increased by 8.1% annually on comparable terms, mainly due to the very strong outbound services, 17.8%. Revenue improvement coupled with strict control measures resulted in a 23.2% OIBDA growth on a like-for-like basis, expanding margins by almost 4 percentage points. Let me now continue with our Mexican operations in slide number 18. Net additions and churn continued to trend very positively. Commercial campaigns are yielding strong results leading us to add more than 2.5 million new clients since the beginning of the year, or 2.3 times above last year's figure. And Churn for the quarter improved 0.6 percentage points to hit a 2.5% level, better than the market leader. Last year, one third of gross adds was translated into net adds. While this year the ratio improved to over 50%. So, churn is key in our operating performance and our trend is outstanding. Turning to key financial metrics, service revenues went up to 70% on a cumulative basis pushed by outgoing service revenues up 89% as quarterly MoU increased by almost 66% to drive quarterly ARPU up by 14%. Despite the strong commercial activities OIBDA passed the €110 million mark in the first nine months of the year benefiting from the increased scale reached with more than 11 million customers. In the next slide we present a snapshot of the remaining mobile operations in the region. In Argentina, Venezuela, Central America and Uruguay our operations excelled combining the strong customer increase with service revenue growth and margin expansion. In Columbia we are focused in reshaping our distribution network. ARPU expansion is driving service revenue growth while profitability is improving to reach 17% margin. Peru delivered another strong quarter. Well, obviously the August earthquake has slightly restricted our commercial activity. Despite this, customer growth keeps growing at a 60% pace with a superb over 81% increase in outgoing service revenues. OIBDA improved at 20% local currency diluting margin by 4 percentage points. Chile posted high double-digit service revenue growth outpacing customer growth. Higher efficiencies drove margin expansion by more than 4 percentage points year-on-year. Let me finish with Ecuador, where the turnaround of operations is starting to show up us a new commercial offer is paying off in terms of usage. As such the service revenue trend changed in the third quarter mainly due to the improvement in contract outgoing service revenue. Let me now move to Europe in slide number 20. Operating revenues went up by 14.2% year-over-year in the first nine months to top the €11 billion mark. The UK remains the main growth engine driven by a focus on higher value customers with a positive contribution from both Ireland, growing at 3% on a like-for-like basis and the Czech Republic also growing at around 3% in local currency. OIBDA reached almost €2.9 billion excluding the gain from the disposal of Airwave and included restructuring charges from the second quarter that actually related O2 Germany. These charges and the costs of the Slovak operations meant OIBDA margin declined just over 3 percentage points on an annual basis which is an improvement from the first half. In the UK we are successfully managing the growth in margin balance with customer in ARPU growth along with an improving margin. In Germany we are proactively taking the segmented approach using new brands to address both mobile and fixed segments and re-launching our own O2 DSL product with continued positive results from the New Guinean SML Tariffs. And in Eastern Europe broadband, for us broadband connectivity revenues are offsetting the decline in the traditional things businesses in the Czech Republic. Although TV users increased to 53,000 at the end of the quarter while mobile revenue growth remained healthy at over 5% focused on postpaid. The business in Slovakia has shown a solid progress servicing nearly 500,000 clients at the end of September. Please turn now to slide 21 for a summary of O2 UK's performance. The UK business maintained its momentum in the market in both customer and ARPU growth were once again behind the healthy 10.2% rise in total revenues in the first nine months. O2 UK ended September leaving the market just 17.9 million mobile subscribers, up 3.2% on an annual basis. In 4Q some timed retention and contract customer growth has been at the forefront of the commercial strategy, pushing the contract customer base to 36.5% of the total base by the end of September, an increase of 1.4 percentage points. Blended ARPU went up by 5.2% in the third quarter with positive evolution of both usage and data ARPU growing by 10.2% and 4.2%, respectively. Within data ARPU non-SMS data grew at over 20%. January to September operating income before D&A margin stood at 25.7% showing a steady increase over the year, as expected. Underlying OIBDA margin, excluding the €14.8 million one off head count restructuring cost was 26%. Margin in the core business will continue to improve with new products such as O2 broadband launched on the 15th of October and the iPhone, launched just last Friday, help the margin in the fourth quarter. In slide number 22, we present O2 Germany's result. From an operating standpoint O2 Germany achieved the highest customer net additions for the September quarter at 610,000, ending with a base of over 12 million customers up 14.5% versus September '06. Client growth was biased towards the prepaid segment which posted a 15.6% annual increase helped by both T-mobile now with over 1 million customers and our new Fonic brand which has had a very successful launch. Genion SML Tariffs continues to progress well with more then 1.7 million customers already signed up, delivering higher minutes of use and an ARPU around 10% higher than average. Operating income before D&A margin stood at 17.5% during the first nine months impacted by the restructuring charge of €96.5 million in the second quarter, excluding this charge, operating income before D&A margin was 21.1%, a clear improvement from Q1 as expected. With our segmented approach in both mobile and fixed broadband, utilizing both the O2 brand and those of our partners, the businesses are well positioned to capture growth opportunities going forward. In Czech Republic, in the slide number 23, the business continues to grow with a healthy rate of 3% driven mainly by the mobile business but also helped by growing broadband revenues in the fixed business, offsetting the decline in traditional access and voice revenues. The trend in line loss is encouraging helped by growth in broadband connections driven by speed upgrades and bundled offers such as Duos and Trios. Our total TV customers exceeded 50,000 at the end of September. In mobile, the proportion of contract customers in the base continues to grow now at 43.5%, an increase of 6.1 percentage points with blended ARPU increasing by over 3% year-on-year in the third quarter driven by both increased usage and data ARPU, up 5% year-on-year. Operating income before D&A margin declined by just over three percentage points for the first nine months with around two points due to the impact of the Slovak operation which reached nearly 500,000 registered customers at the end of September. Operating income before D&A margin in the fourth quarter will be stronger due to the impact of the costs associated with the launch of the O2 brand and personnel restructuring cost which took place at the end of last year flowing out of the base. Please turn to slide number 24, to have an overview of the evolution of the Group synergies. All initiatives to further integrate operations are running on track, building synergies of just more than €1 billion in 2007 which come across to 9% of our guidance of €1.3 billion. More than 65% of the synergies have been generated in Latin America. As the regional management of its operations are started in 2004. In addition, let me highlight that close to 40% of the synergies achieved came from global horizontal, cross regional actions leveraged by the coordination of the cost to develop [ph] and the sharing of knowledge and experience. Moving now to our financial profile, I want to highlight its stability in the middle of the financial turmoil. We have been able to keep our cost of debt below 5.4% of the total net debt plus commitments which some basis points savings versus the first half of the year. So, our nine months 2007 interest expenses were close to €2.1 million. On the foreign exchange front, we have kept our liability portfolio broadly unchanged except for two factors. First, for the Endemol disposal we have been repaying euro debt, and secondly, we have increased our Czech Koruna liabilities towards a more neutral stance as it depreciated 4% versus the euro during the quarter. Finally, we have been relatively quiet in the financing front in the third quarter, after having completed our refinancing exercise. However we have issued Japanese yen bonds for around €190 million equivalent and our Brazilian subsidiaries have raised more than 2 billion reais locally, and we have fully refinanced our commercial paper in euro with... in euros with no impact in either margin or term. This fact, coupled with net debt reduction, has allowed us to keep the average debt maturity above the midyear level at 6.8 years despite the passage of time. Please turn now to slide number 26 to comment on our debt position. As of the end of September we have reached our de-leverage commitment set in May 2006 for the medium term as our debt income have been dropped to 2.25 tons annualized OIBDA, excluding extraordinary results from divestments. This ratio stands well below the 2.5 limit just in the middle of the new target range. Debt has been cut more by more than €8 billion in the first nine months of the year pushed by first €2.7 billion free cash flow retained after shareholder remuneration, and second, €4.9 billion of net divestments, and third, financial effects including the 420 million foreign exchange savings mainly due to US dollar and the sterling depreciation versus the euro, accrued interest €270 million below payments, mark-to-market effects, and debt fee consolidation following disposals. We expect some leverage increase in the last quarter as we have already paid €2.3 billion for our stake in Italian Telco and we will pay more than €1.6 billion of dividends this Wednesday, on November 14th. This dividend will add up to the €3.2 billion already dedicated to shareholder remuneration to approach a total close to €4.9 billion paid during the year. We have devoted €1.8 billion for buying back shares in the first nine months of the year, and so we can say that our commitment has been fulfilled. To sum up, first, our commercial momentum continues across countries and businesses with total Group accesses increasing by almost 12%. Second, we are retaining benchmark organic growth from top to bottom posting a 7.6% increase in sales and a 50.4% earnings per share. Third, we are keeping efficiency improvements with OIBDA margins standing at 37%. And finally we reiterate our fiscal year 2007 guidance. With this I thank you very much for your attendance. And now we are ready to take your questions.

[Operator Instructions]. The first question comes from the line of Damien Maltarp [Cazenove]. Please go ahead with your question. Damien Maltarp - Cazenove: Thanks very much, Damien Malta from Cazenove. Two questions, firstly just on the restructuring provision that you guided for the full year, you previously indicated €630 million in Spain. Should we still be thinking about that number, if not, if its lower why might it be low, is there any slippage in terms of I guess signing people up to the redundancy plan? And the second question, just looking at your balance sheet, the short term provisions and other liabilities is gone up by about €1.6 billion over the quarter alone, is there any thing in particular within, that you can point to? Thanks a lot. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Damien, this Antonio Viana; good afternoon. On the redundancy plan, as you saw we have seen in the previous years, normally the fourth quarter is the stronger quarter in terms of closing most of the redundancies. I remind you that this is the end of a four-year program with a overall target of 15,000 headcount reduction. We are already... from those 630 million... have already accounted for 116 million until now, and we expect to have a stronger than the other previous quarters activity in the last quarter. Nevertheless, we may be short of the overall targets since, as I was telling you, this is an overall program for four years and this is the final quarter of this four-year program, but be sure that we'll have a more stronger activity in this quarter, and we're still committed to try to reach that target although it seems difficult and we'll probably fall a bit short of that. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Yes on the second question, the balance sheet, we're unsure. Would you mind repeating the question so that we can locate the answer, please? Damien Maltarp - Cazenove: Sure. Just looking at the short term provisions and other liabilities in your balance sheet, to say with course of the quarter looks to have gone up quite materially by over €1.5 billion, just wondering if there's anything in particular you could point to, that was driving that increase. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Can I ask you to... I'll ask the question later on in the call because we're double checking the numbers, okay. Damien Maltarp - Cazenove: Okay. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: I'll get back to you on the question during the call. Damien Maltarp - Cazenove: Thanks very much.

Your next question comes from the line of Terry Sinclair [Citigroup]. Please go ahead with your question, announcing your company name and location. Terence Sinclair - Citi: Hello. It's Terry Sinclair from Citi. Two things; first of all. I noticed there was some strike activity in Argentina, is that something that should be very concerned to? Are there any other... is there any other industrial action elsewhere in the group? Secondly, can you help me understand, what's happened with Chilean margins, they are poor, tend to be falling in fixed and going up in mobile? Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Yes. I'm seeing your question about the strike in Argentina. You know that the strike ended, and we're now underway of rating a normal operational activity in Argentina, and that is progressively happening and we have no other strikes going in around in regions, so we can tell you that negotiations came to an end at month's or something ago, and now we're trying to recover the normal operation on 20 in Argentina. Though it's taking us a while to recuperate that activity because we have a pending, waiting list both in traditional lines and in broadband, therefore we are accelerating this deployment. So, nothing on that front and with regards to the Chilean margins, I mean in terms of the wireline addition we are now entering... into our new business which is a TV business which has lower margins, that's affecting this first month, we started last year and it keeps affecting us this year, but we are progressively improving as we are achieving critical mass and that's the main effect on the wireline. And on the wireless, I mean the commercial activity as we are reaching higher I am very I would say high degrees of penetration on the wireless, the commercial activity is more reduced. And then we are focusing more on loyalty programs on prepaid to postpaid migrations, and that's why margins are improving on the wireless, actually. Those are the main comments. Terence Sinclair - Citi: Thank you very much. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Thank you, and next question please.

The next question comes from the line of David Wright [JP Morgan]. Please go ahead with your question announcing your company name and location. David Wright - JP Morgan: Hello, its David Wright at JP Morgan, in London. I have three questions please. First of all on Latin America, the margin in Venezuela looked fairly exceptional with a very... looked exceptionally good, I should say, with a low number of additions, is that the kind of benchmark for underlying margin we should now be looking at for your Latin American mobile operations, in perhaps, the two player dominated market? Is that the kind of midterm margin you are looking for all of those operations to had to? Secondly, in the O2 business we saw strong net-adds in Germany but it dipped once again in service revenues, now, is this the case of most of those adds coming in late in the quarter, so perhaps we should see some kind of rebound in Q4? I think, Peter, you have mentioned in the past that you expect service revenue trends to go positive in Q4, is that still the case? And then just finally maybe some Santiago you could give us a bit of guidance on full year P&L tax, given that very low rate then normal? Thanks. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Well I will take the question of Venezuela, and the answer is that each country has its own specialty, and therefore I don't think we can extrapolate one margin from one country to the other. In the specific case of Venezuela, you need to take into account the fact that there is a lower intensity in terms of handset subsidy in that country, and on top of that the beyond net effect traffic affecting our own network is very significant, and that's the two main leaders of why the margins are what they are in Venezuela. So therefore we, in Venezuela, we see no major movement that can allow us, that to change, but I don't think that we can extrapolate that to the rest of the region because each country has its own specific effect in terms of subsidies and in terms of traffic evolution. David Wright - JP Morgan: Okay. Peter Anthony Erskine - Head, Telefónica O2 Europe: As far as the German question, David, it's Peter Erskine here. Obviously, a business takes a while to swing around on its net adds throughout the year to drive it, so its not so much that they were net adds towards the end of the third quarter, its just that it was a very big number, three quarters the way through the year. I think we still stick with the guidance which allows either flat or ever so slightly minus for the whole year, but that will give us we believe in the last quarter, a quarter's total revenue and that includes the DSL business as well as the mobile business which is looking positive. But as to actually whether the service revenue or mobile will go positive. I think it will be around the guidance number for the year end. And I just put Germany in the context. It's going to shoot, it's a good number, it wasn't just 610,000 customers that were full quality within that place to 40% were contract customers, and I think that plus our improving DSO performance, start to say that signs are slightly encouraging but obviously we will no more as subsequent quarters come along. David Wright - JP Morgan: Okay. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Yes, David, in terms of the taxes, we do not provide any taxes guidance. The one significant number that we have produced this quarter is this tax shield increase as a consequence of Endemol disposal which is going to result in an increased tax shield going forward, and therefore lower cash taxes not this year but in the coming future, once the tax shield gets depleted again. But we don't have any specific... we don't expect, by the way, any big impact on the cash side of taxes until the yearend, and so we can make a best guess as to what the cash taxes is going be from now until the end of the year. David Wright - JP Morgan: And in terms of the P&L tax, is that the kind of level, we are looking at the for full year, the nine months level or blended off a little. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Well Q3 P&L effective tax rate is very low as a consequence of the very large tax credit coming from the Endemol sale again. So you should not expect a 13.7% to be happening again. We should reverse back to an average more commensurate with the first half of the year. David Wright - JP Morgan: Okay. Super thanks. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Your next question comes from the line of Robert Grindle [Dresdner Kleinwort Wasserstein]. Please go ahead with your question, announcing your company name and location. Robert Grindle - Dresdner Kleinwork Wasserstein: Yes, hi, there, it's Robert Grindle from Dresdner Kleinwork, in London. Just on the Iceland and the UK, will your Iceland revenues be reported net or gross of payments to Apple and roughly what would that difference be. The second question is what's the plan for funding Telco, the holding company for Telecom Italia? Are you expecting still to contribute your share of any capital increase? And then just on mobile data in Spain... sorry if I missed it.... but is it possible just to know the absolute number for mobile data in Spain in Q3? Thanks very much. Peter Anthony Erskine - Head, Telefónica O2 Europe: Thank you, Robert. Regarding your iPhone, I am sure you haven't intended it, but your question could reveal our revenue share. And I am not willing to do that. As to currently how we report the number, we're currently working with our auditors to make certain that as the revenues flow we report it properly. So, we will be telling you more of that to the end of this quarter. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Yes in terms of the integral increase in Telco, Bob, what's going to happen is that before the yearend the Telco deal has been completed, Telco will have to go through a couple of markets to fund an increase in shares. We are determined to contribute our shares, and whether it's going to be through a capital increase or it is going to be through further debt is not something which has been decided at the Telco level, where we are indifferent, either way it fits us and suites us but we'll have to discuss that with our Italian partners to understand what's best for all the Telco partners. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: And on the mobile data in Spain, Robert, the revenues for the quarter on mobile data in Spain was €325 million to reach a cumulative of €930 million for the whole of the year. The growth in mobile data revenues has been on the range of 13%, if I am not mistaken, on that quarter compared to the same quarter of last year. Robert Grindle - Dresdner Kleinwork Wasserstein: That is very clear, thanks very much, indeed. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Thank you. Ezequiel Nieto - Head, Investor Relations: Thank you. And next question please.

Next question comes from the line of Mathieu Robilliard [Exane BNP Paribas]. Please go ahead with your question, announcing your company name and location. Mathieu Robilliard - Exane BNP Paribas: Good afternoon. Mathieu Robilliard, Exane BNP Paribas. I had two questions please. First, in terms of your performance at the EBITDA level in Spain-Mobile. Could you give us a little bit more color as to what is behind the good progression of the margin, is it the lower FRC per unit or is there some structural improvement in cost efficiency? Second question has to do with the Telco deal, is that behind house and the fact that Telecom Italia mentioned potential synergies of up to €500 million annually? I was wondering when in year-over-year we should start to see those synergies flow your side? Thank you. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Mathieu, this is Antonio. On the mobile evolution in the case of Spain, both we have stated from the beginning that you would see as the year would go by the impact of the different interconnection rate decreases, and as a consequence if you add up the two decreases into one in October 1st and one in April. That has led to a decrease in the range of 14% on a cumulative basis. So, obviously that affects the level of revenue growth, and as a consequences of margin as well in terms of the third quarter. And on the other side you see also that this is the quarter where we have a stronger impact in terms of the roaming tariffs, but apart from that we do not see any structural relevant change. Julio Linares López - Managing Director of Coordination, Business Development and Synergies: This is Julio Linares. Regarding your question in relation with the synergies with Telecom Italia, we had some exploratory discussions at the beginning of the year in order to identify the potential areas for synergies and to identify in each area the amount, readily the amount of synergies that we could reach both companies together. At that time we identify yearly range between €100 million and €500 million for both companies. Now that the deal is closed we have to go deeper in each area and with the right information and with the right people to analyze more closely. The potential synergies before we are able to close the program for the next year. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: If I can come back for a minute, this is Santiago, I want to come back to Damien's question in the beginning. I can now confirm that the €1.6 billion increase in short term provisions is fully related to the payment of the dividend this Wednesday of €1.67 billion. And the reason why it is sitting there is because what the dividend is announced and it was announced. It is no longer freely available for the company. So, it will be adjusted after the payment is completed this Wednesday. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Your next question comes from the line of David George. Please go ahead with your question, announcing your company name and location. David George - Credit Suisse: Yes, thank you. It's David George at Credit Suisse, in London. A couple of questions, firstly on Spanish broadband, we heard some comments from Auna recently that they were seeing some more aggressive competition from yourselves in Spain, I think matching them a bit more closely on pricing and speed. We did see, I think, a fairly weak net sales figure for cable broadband in the quarter. I wonder is there a sort of particular change of strategy in terms of how you view cable in Spain, as compared to... can we see that trend continue. Secondly, just in Germany, Peter, I wanted to. Firstly, I am not sure if we got an exact number of the Fonic brand adds in Q3, and also wanted your expectations on the upcoming termination rate cuts in Germany. Is there a danger we could see the current amount of asymmetry in German termination reduce? Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: David this is Antonia Viana, on the Spanish broadband, I will not comment on Auna performance, I would rather comment on our performance, in the sense that what we have strived is to deliver what we promised our customers with probably a consistent delivery in terms of service, we have expanded our range of products going, as Santiago pointed out in the presentation, from the 1 megabit entry offer to the core offer at 3 megabits and to the upgraded offer at the 10 megabits. I think that also the number that we are providing in terms of in Endemol [ph] and the level of net assets we are having in Endemol on a market that is not growing as fast probably in the third quarter, due to all this soccer distribution wars that have occurred during that period in Spain, have also contributed for us to have a better performance than others. So, we are pleased with our performance, we want to keep on growing not only in the cable areas but all over Spain with an offer that is inconsistent in the rest of the country. And so while we are positive about the way our operations are growing. As I told you I would not make any comment on the overall performance. Peter Anthony Erskine - Head, Telefónica O2 Europe: And David on your questions on Fonic, etcetera. We did 70,000 net charge with Fonic in September... it was only launched in September. And in fact since then, it continues to do very well, it is pretty close at the end of October to around a 100,000 mark. So it's going very well. It is also showing that in the quarterly cheapo [ph] operations hit 1.1 million customers, and actually did 191,000 net adds in the quarter. So as far as your question on German termination rates, we would... we will know at the end of November, we think, and we would certainly anticipate lower than last year's 20%, precisely, how much lower but we think significantly lower than last year's level is what we are anticipating but it's currently company ore is still in the melting pot. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Your next question comes from the line of Will Milner [Arete]. Please go ahead with your question, announcing your company name and location. Will Milner - Arete: Thanks. This is Will Milner from Arete, in London. Within your longer term EBITDA growth forecast in Latin America, are you forecasting to less EBITDA returning to growth in the years 2010. And what should we expect to derive this return to growth? And then secondly on Spanish wireline, what percentage of your broadband base in Spain do you expect to ultimately take the lower €30 offer? Thanks. Julio Linares López - Managing Director of Coordination, Business Development and Synergies: On the long-term OIBDA brand of Latin America, we are considering slightly increasing... positive increasing their OIBDA from Telesp, and therefore... and that's why we were saying, during the slide that we are accelerating the transformation of the wireline. You need to take into consideration of the fact that, out of Telesp evolution of this quarter you have one significant event that was positively affect us here, were feel [ph] which was behind direct tax of fiscal fees effect, which was more than 300 million reais, and that significantly affected year-on-year comparison. On top of that this year you have this [indiscernible] that we have been out during the whole year of the bad debt evolution. And those two are non-recurring events. And therefore we think that this jointly would affect that we are accelerating the transformation of Telesp in terms of deploying a network upgrade and in terms of diversifying the different platforms in other two offered... triple play offers, now we have the TV agreement being signed. We have the global contents and therefore we are very competitive in terms of the content, the content part of our TV offer in Brazil, and the continuous efficiency effort that we are carrying out effectively having reducing more than 800 people in the workforce here. We think that we should be able to turnaround the Telesp situation in the short run. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: On the broadband base and the 1 megabyte I think that the one megabyte offer has a very clear purpose which is to expand our broadband customer base. That is clearly the purpose of launching the 1 megabyte offer. From thereon what we want is that the customer has new sort of customer experiences using increased speeds. So, as we pointed out in the Investors Day, our target is to have around 6.1 million, 6.8 million customers on broadband by the year 2010. And I can't tell you what would be percentage of 1 megabyte but by 2010 having 1 megabyte will be the same as having narrowband today. So, it is really an entry product to increase the customer base and then the customer will by itself as it becomes a heavier user will require extra speeds. Will Milner - Arete: Okay. If I can just follow-up you don't than see any canalization risk of your existing broadband base from this product? Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Well obviously if a customer decides to abandon our service, this is also retention product to retain some of those customers, but as I told you the core of our offer is centered around the three megabit offer. Will Milner - Arete: Okay. Thank you. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Your next question comes from the line of Stanley Martinez [Legal and General Investments Management]. Please go ahead with your question, announcing your company name and location. StanleyMartinez - Legal and General Investments Management: Thanks. Good afternoon. It's Stanley Martinez from Legal and General Investments Management, in Chicago. I have two questions, if I might please, first to Pallete on Latin American ARPU; can you discuss the pricing power you have in local currency terms within Latin American countries with high inflation. Last quarter in Argentina, we saw some impressive ARPU growth in TASA and TEM Argentina, but less so in terms of Venezuela where ARPU is a higher percentage of per capita income. I am wondering if there is a further spike in local price inflation in these two countries or elsewhere in Latin America, say in the order of magnitude of 10%, for instance. To what extent you feel your local managers can pass along those costs so as to minimize any dilutive impact on Telefónica's Group results in euros? And then I have a question for Mr. Valbuena on debt targets. When I look beyond the Q4 commitment and even when incorporating the new dividend policy announced in London three weeks ago, Telefónica has the potential to be sustainably below two times net debt to OIBDA over the next couple of years. Now you have been clear about targeting high BBB plus minimum ratings rather than trying to return to the A ratings you had prior to the mmO2 acquisition, should I presume that any excess debt capacity below two times leverage will divert to acquisition or might we actually see Telefónica's leverage below two times for a few quarters into the new fiscal year? Thanks very much. José María Álvarez-Pallete - Head, Telefonica Latin America: Taking the first part of your question, in terms of the ARPU and the linkage with local inflation in each of the countries. I would like to say that, yes, of course we're influenced by the local inflation but in most of the cases this is much more linked to effort in terms of minutes of usage that we're doing every, in every single country. In order to be used an example, what you have stated about Argentina and Venezuela is true but ARPU is also growing, for example, in Brazil or Chile where inflation is much more contained, and that's much more linked to the fact that we have been able to put in the market an offer that is attractive to the customer in terms of elasticity, in terms of number of minutes versus price per minute. And therefore we have room playing with the elasticity and the value proposition that we're making to each of the countries to drive that up. So, yes, of course, it is affected by inflation but it is not directly affected, I mean, you're finding cases where lower inflation are low enough to have ARPU that's significantly above the inflation in each of the countries. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Okay, Stan, on the debt targets. We are very happy to have been able to reach the target that we had set for ourselves of bringing total debt leverage ratios below 2.5 and this has been accomplished already. We have said during the call that there might be a small pickup in that leverage ratio in Q4 of this year, as a consequence of paying the dividend and the recent payment of Telco. And medium term we feel very comfortable with a BBB plus rating that we have secured for the time being. And we see this is broadly compatible with a 2.5 times that of our OIBDA leverage ratio. Should we have any reason to think that that ratio ought to be adjusted in permanent conversations with the rating agencies, we would review it, but we think this is not likely to happen. A revision to those targets, I mean, over the next couple of quarters. So while we get there, the priorities that we've set for ourselves in London were quite clear. Any excess cash flow, any excess free cash flow, I should say, is going to revert back to the top priority which is shareholder remuneration. And we will go down that ladder again by increasing shareholder remuneration in its various incarnations, then dealing with debt if that is needed and then attending the acquisitions. Shareholder remuneration continues to be our top priority once we have completed the latter. StanleyMartinez - Legal and General Investments Management: Fair enough. Thank you. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Your next question comes from the line of Randall Pollock [Vanguard Group]. Please go ahead with your question, announcing your company name and location. Randall Pollock - Vanguard Group: It's Randall Pollock, Vanguard Group, Philadelphia. Just a follow-up, do you expect to issue new debt next year in any market or to refinance or whatever and also second question, can you discuss how you are obtaining content for non-sports content for broadband in mobile phone and any comment on costs and its impact on margins? Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Yes, on the debt issue, we have net maturities of €2.7 billion next year. It is not impossible but it's not set plan and more visited, more market that will crucially depend on the characteristics, the features and the timing. We have been calling on the capital markets since we financed the O2 acquisition, with just an intend to keep it otherwise, but the point I want to across is, we are under no pressure to dissolve because free cash flow generation would be more than enough to accommodate, plus the cash at hand to accommodate those maturities. But we want to be perceived as frequent benchmark issuers in the various capital markets, so again no set plans, but yes, a strong likelihood that if the markets are reasonably open we will be there in the major currencies including euro, sterling and certainly the dollar. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: Would you mind to repeat your second question please. Randall Pollock - Vanguard Group: Could you discuss how you are obtaining your plans to obtain entertainment content for mobile and broadband and any comment on costs and backlog costs? Julio Linares López - Managing Director of Coordination, Business Development and Synergies: Well, this is Julio Linares. Regarding your question on content, first of all we decide the kind of content we need depending of local markets. But in addition to that we have joined negotiations based on a centralized unit that this curve of all the content negotiations for any platform regardless it is Internet platform, TV or mobile platform. In our negotiations basically we are trying to reach agreements with the content providers based on revenue sharing or based on cost of the subscribers, user basis rather than to pay upfront content. We have just those kind of upfront agreements in very special cases like it could be soccer rights or some movies for our video-on-demand offer. So, basically we are always trying to reach agreements with the content providers based on sharing with them the risk we have in those markets. Randall Pollock - Vanguard Group: Is there a central purchasing or is there separate purchasing in each country? Julio Linares López - Managing Director of Coordination, Business Development and Synergies: There is central purchasing unit that these curve of all the negotiations for the different countries, in collaboration with local market but there is a central unit in our corporate center. Randall Pollock - Vanguard Group: Thank you very much. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Our next question comes from the line of Guy Peddy [Blue Oak Capital Limited]. Please go ahead with your question announcing your company name and location. Guy Peddy - Blue Oak Capital Limited: Yes, hello, gentlemen, it's Guy Peddy from Blue Oak, in London. Three very quick questions. I note in Telefonica Espana's Waters business a dramatic increase in prepay usage in the quarter, but actually a decline in contract. I wonder if you could explain what was driving prepay that wasn't driving contract usage growth? Secondly, interpreting Peter's comment about the O2 Germany turnaround, it would appear as if you are signaling, Peter, the big things like this don't turnaround quickly, so perhaps we should be waiting well into 2008 before we actually see a discernible turnaround of O2 Germany, is that the case? And finally in Telesp, it seems like I'm reading your talk that there is an ongoing value shift from Telesp to VIVO, which from a Telefonica perspective is clearly the wrong way. I'm just wondering what you can do to actually reverse this, because it's fair to say that in IPTV, and triple play bundles in most countries haven't have the discernible change on any wireline operator? Thank you. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Okay. This is Antonio Viana. Let me address the usage issue on Spain. What you see the third quarter had nothing of a long term trend, it is nothing but what occurs in the summer. What you have in the summer was a campaign clearly directed at prepaid, whereby by paying a small fee, you would be able to talk every night during the summer from 10 PM on at a flat rate. So, as a consequence that has increased, probably, the usage in the summer. We are extremely happy with the kind of results that they have achieved in terms of the acceptance of the customers for that sort of campaign, and for the results that they have... that those have in terms of maintaining a better churn, in terms of the prepaid side. The comparison that you are making with the contract side is that, obviously, in August, here in Spain, the consumption from corporations drops dramatically and if you would look at other third quarters in previous years, you would probably see a similar trend but there's nothing else but that that's just the effect of the summer, since there is a doubt in that front and there's nothing drastically different or structurally changing. Peter Anthony Erskine - Head, Telefónica O2 Europe: Guy, Peter Erskine; regarding your German question. No, I didn't mean to say, well into 2008, I'm sorry, if I misled. It's an encouraging quarter we've just had, as well as a headline 610,000 net adds. Perhaps Fonic as a new brand kicking in, in its first six, seven weeks of 100,000 net adds but that does go into October at 70,000 in September is encouraging to have DSL now starting to give us an order bank of about 4,500 a week that we now need to be quicker to install on DSL is encouraging to have the Genion base. Now on the new tariffs we got about 1.7 million customers within our post-pay base who have a 40% more minutes produced and a 10% ARPU is encouraging. I think the fourth quarter is on the back of quite a good fourth quarter last year which had some big numbers in there, will be challenging. I think we, we definitely start to see continued improvement but zero debate. This isn't well into 2008, we have to see a quarter-on-quarter improvement. And I remain very confident that we're doing all the right things and by early next year we'll be starting to say yes it's well on the road to recovery and we're getting back to good revenue growth, and obviously working at improving the margin. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: I guess with regards to your third question about Telesp and the competitive environment in Sao Paulo and VIVO, I would rather say that we think we have the two best platforms in telecommunications, is how probably, both Telasp and VIVO. The competitive scenario in Sao Paolo is very aggressive in terms of pricing for... to the voice and from the mobile side, and we have been able to be fully prepared for that thanks to a turnaround of VIVO. So right now, compared with a year ago or two years ago, we have the opportunity to share that upward trend at a level of VIVO. And at the same time in Telesp, and that's a trend a bit unavoidable because that market competition scenario in Sao Paolo. But we have all the elements that were needed or that are needed to turnaround Telesp, that were not there a year ago. Remember that during the last year we have been able to complete this year-on-year process. We have been able to reach the agreement as of the content provider that is differential and that we need to have that for the offer to be compared, and we are delivering broadband in Sao Paulo. So we really think that we have the best platforms in the most attractive state of Brazil in order to be competitive and in order to be able to take advantage of what's happening there in terms of market dynamics. So, I think that we should be able to take the best out of the two worlds. Guy Peddy - Blue Oak Capital Limited: Okay. Thank you. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Our next question comes from the line of Chris Kern. Please go ahead with your question, announcing your company name and location. This question appears to be withdrawn. Our next question comes from the line of James McKenzie [Fidentiis]. Please go ahead with your question announcing your company name and location. James McKenzie - Fidentiis: Okay, it's James McKenzie calling from Fidentiis, I am afraid. This question on LatAm fixed volume generally. You seem to have seen a big fall in EBITDA margins this year. Not just in the third quarter which is obviously motivated by the tax recovery, but generally margin seem to fall from sort of high-forties to the low-forties this year. Now, I know it's something that you don't specifically guide upon, but what do you, I don't know if you can give us any idea of what you are expecting for these margins going forward? Particularly considering that in the two biggest countries you haven't actually rolled out any Pay TV as yet? Julio Linares López - Managing Director of Coordination, Business Development and Synergies: Well, thanks for the question James. The margins of the wireline this year have been affected, and I would suggest, also to correct those by the bad debt impact of Telesp this year, which is supposed not be recurring and that we have been carrying out during this three quarters of the year. So, that's one of the effects. And the other effect, and probably the most, longer lasting one is the fact that we are entering into new markets, into new products like the one in broadband has a different margin and also, namely, in Chile, and starting to appear in Columbia, and also starting to appear in Brazil has lower margins, so I think that we need to, we need to focus on the kind of margins that the blended margins that we are getting these days. And we are able to sustain those and able to trying to do those margin, thanks to regionization effort that we are carrying out. Most of the signatories [ph] are directly diverted to sustain the margins, necessarily on the wireline side. And also the efficiency effort that we have been carrying out during the year, and that either way has been fully reflected in terms of the OIBDA margin, those are included in the OIBDA margin has also there, and have also impacting the margins. So I guess that, the transformation effort that accounts for both the new offer of products and the efficiency effort that we are carrying out, jointly with the non-recurring event of the bad debt evolution at Telesp, are the key strength to margin evolution on the wireline. James McKenzie - Fidentiis: Sure, do you have any sort of feeling for us going forward of whether margins are going to stabilize, rise or even fall from this point? Julio Linares López - Managing Director of Coordination, Business Development and Synergies: I am afraid not, you are going to have different affects... one is as the peak operator, the peak client base which include... margins are improving and that's happening, for example, that's the case in Chile. Also churn is reduced, you will see that churn, both, in traditional and in broadband is slight favorable along this year in Latin America, and basically due to the royalty effect of the bundles of product. So, you have on that part margins being sustained. On top of that you need to add the fact that the regionalization efforts was in terms of central management supervision that is facing Telesp or the ITF, or that we have been carrying multi-nineties [ph], is also going to payoff, payoff during this coming months. So, I would say that we are continually focusing on that but I don't think we can guide you on the long term. James McKenzie - Fidentiis: Fine, that's fine. Thank you. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Our next question comes from the line of Luigi Minerva [HSBC]. Please go ahead with your question, announcing your company name and location. Luigi Minerva - HSBC: Yes, good afternoon. Luigi Minerva from HSBC. I just wanted to have an update on your discussions with the Spanish regulator on the NGA program you announced at the Investors Day; you told us that November was going to be the time for a first feedback. Thank you. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Thank you. Luigi, for your question. Well, we have put our points of view as did other operators to the regulator in terms of how we think that the regulation of the new generation networks should be established in Spain, differentiating it clearly from the traditional network and also having a differentiation depending on the alternatives regarding different networks or alternative networks in specific regions upstream and as a consequence that, that sort of segmentation should be required while considering how to address regulation in that front. We are still waiting for the view of the regulator, we know that others have tendered their opinions and now we still have to wait for the, a regulator to come back with his own views. So I think that we better wait for his final view on this issue. Luigi Minerva - HSBC: Okay. Thanks. Ezequiel Nieto - Head, Investor Relations: Thank you. Next question please.

Our next question comes from the line of Jonathan Dann [Bear Stearns]. Please go ahead with your question, announcing your company name and location. Jonathan Dann - Bear Stearns: Hi, it is Jonathan Dann from Bear Stearns, in London. And two questions. The first was could you disclose the year-on-year change in gross additions in the German mobile business? I think you have disclosed it for the others. And secondly, could you comment on when you'd expect the UK DSL business to be posting the type of weekly DSL adds that Germany is currently doing? And I guess, thirdly, do you think German DSL adds can accelerate for the O2 broadband brand? Peter Anthony Erskine - Head, Telefónica O2 Europe: I'll take those in reverse order. The Germany DSL, yes, we are very certainly can accelerate, but we really only started to sell this pro-actively July, August. That also ran into the Deutsche Telecom strike which slowed it down a little bit on insulations of the usual sort of getting the systems refined. So we remain quite confident that we can ramp up the German DSL. We are not saying when the UK can get to those levels. I am to put it in a context, we have been selling DSL in UK now three weeks. We committed that we will do more than a million customers by 2010 and we remain very confident in that, but I think exactly when we'll start to hit the kind of run rates that we are getting in Germany, no, we are not the position to say. I've got people rapidly giving me the gross... sorry, hang on one second please... The gross year-on-year increased 79%. Luigi Minerva - HSBC: Thanks very much. Ezequiel Nieto - Head, Investor Relations: Thank you. We have time for a last question, please.

The last question comes from the line of Christian Kern. Please go ahead with your question. Christian Kern - Lehman Brothers: Hello, it's Christian Kern from Lehmann, in London. Three questions, if I may, the first one would be on the roaming revenues. You pointed that domestic roaming revenues have been down 14%, that implies given the drastic price cuts you've seen, quite a strong elasticity, could you confirm then what you seen around that trend. Secondly, what do you expect from Brussels tomorrow and the final one does OT look more or less attractive after the transaction last Friday? Thank you. Antonio P. Viana- Baptista - Chairman and Chief Executive Officer: Well Christian, on the roaming, what I mentioned regarding the 14% drop in terms of prices was really to termination, not to roaming, was really the termination prices. On the roaming front what we have seen in the third quarter is that you have clearly two different markets on the roaming in market. It has been traditionally a very competitive market with a different operator sharing Spain, trying to compete for the traffic of major operators in Europe. So it was already a competitive market to that extent. So the impact has been not that strong as probably one could expect. On the roaming, I think that's the integral point dealt in one of the slides, that the major effect that it has was that they have now more roamers, more of our customers are doing roaming out, that is, that the number of roaming out customers has grown at a rate that this the double of the growth on the customer base, and that's quite a positive sign to the extent that people are getting used to roam out, to use their mobiles when they are out of the country. So, that has changed or is starting to change the perception of people that roaming is too expensive and people are starting to behave differently and that's obviously is translating into a better traffic. Usability higher than one throughout, for the time being now, but the, if the overall affect I think that it's already included in the kind of growth that we have provided, and that we feel comfortable with the economic scenario that it is translated on this roaming front. Julio Linares López - Managing Director of Coordination, Business Development and Synergies: This is Julio Linares. Regarding your question on tomorrow's announcement of Euro Bank Commission [ph]. We believe that they are going to announce a new proposal for the review of their current telecommunication directives that will include new policy for a spectrum management, they will include some stressing of the European commission regulatory power... we don't know yet to what extent... and they will include some expansion of privacy and consumer protection rules. In addition to that they are going to review the European recommendation on relevant markets. You know that today there are 18 relevant markets and it's very difficult right now to see whether that number, it is going to be reduced to 7, 8 or 9, we don't know right now, but we are expecting a significant reduction in any case. In addition to that is may happen that they announce a set of initiatives for 2008 regarding guidelines for optical fiber, the growing on investment month, guidelines or some national segmentation and guidelines for universal service. That's the kind of announcements that we are expecting tomorrow. Santiago Fernández Valbuena - Chief Financial Officer and General Manager of Finance and Shared Resources: I know your last question of having to those correctly [ph], we do not see anything changing in the landscape relative towards the year or other target. We were quite clear in our Investor Day that the time has now come for us to strengthen the markets that we already have. We have already built on the strength, and it is building on that strength that has taken us to where we are, the scale is enough. And so I'm sure there will be very good, well, assets but those are going to be for many others to explore. Let me with this bring this call to an end. Thanking you all for having attended, and expecting you over the next full year results which will take place in early 2008. Thank you.

Ladies and gentlemen thank you for your participation today. This concludes today's conference. You may now disconnect your lines. Thank you.