Trevor Healy, Chairman Jajah

JAJAH PRESENTATION

Investor Conference

London, 13 - 14 April 2011

Disclaimer

This presentation contains statements that constitute forward-looking statements about the Company, within the general meaning of the term and within the meaning of applicable securities laws, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations. These statements appear in a number of places in this document and include statements regarding our intent, belief or current expectations regarding our customer base, estimates regarding future growth in our different business lines and our global business, market share, financial results and other aspects of our activity and situation relating to the Company. The forward-looking statements in this document can be identified, in some instances, by the use of words such as "expects", "anticipates", "intends", "believes", and similar language or the negative thereof or by the forward-looking nature of discussions of strategy, plans or intentions.

Such forward-looking statements, by their nature, 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. These risks and uncertainties include those discussed or identified in the documents filed by Telefónica with the relevant Securities Markets Regulators, and in particular, with the Spanish Securities Market Regulator.

Except as required by applicable law, Telefónica undertakes no obligation to release publicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentations, including, without limitation, changes in Telefónica's business or acquisition strategy or to reflect the occurrence of unanticipated events.

Neither this presentation nor any of the information contained herein constitutes an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, or any advice or recommendation with respect to such securities.

Finally, be advised that this document may contain summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by Telefónica. Furthermore, Telefónica may present financial information herein that is not prepared in accordance with IFRS. This non-GAAP financial information should be considered in addition to, but not as a substitute for, financial information prepared in accordance with IFRS. Telefónica has included such non-GAAP financial information because Telefónica's management uses such financial information as part of its internal reporting and planning process and to evaluate Telefónica's performance. Accordingly, Telefónica believes that investors may find such information useful. However, such non-GAAP financial information is not prepared in accordance with IFRS or any other generally accepted accounting principles, and such non-GAAP financial information, as defined and calculated by us, may be different from similarly-titled financial information used by other companies. Investors are cautioned not to place undue reliance on such non-GAAP financial information.

Agenda

Aim to answer the following key questions in the presentation:

What is Jajah and why did Telefónica acquire?
How have we done to-date?
What we plan to do and where we are going?

What is Jajah?

Allows users to make IP calls

Works on landline and mobile

No hardware or software download

Works globally

No headset required

Paid Model

Jajah expanded to be a complete platform

Billing and Payments
Fraud and Security
Global Connectivity
Supports Internet Portals
Supports mobile, web, pc, set top
Scales - 100's millions of minutes

Platform approach led to Jajah as a standard

Large companies adopted Jajah

Why did Telefónica acquire Jajah?

Deliver new products to Telefónica OB's
Be Bold!

Leverage Jajah Core platform and Partners
Be Challengers!

Be an innovation hub for new product develop
Be Entrepreneurs!

Leverage people and r&d expertise in Israel and Silicon Valley
Be Different!

Status: Deliver new products to OB's

NEW: Global Friends for O₂+

O₂

TO THE ENDS OF THE EARTH FOR 15 CENTS

Call up to 5 foreign numbers for just 15 cents/minute – even from mobile phone to mobile phone.

3 Products Launched

US $100m+ run rate of revenue, very healthy margin

Great new customer experience

Avg. 15 € cents per minute

Superb quality over IP from mobile

New rollout across TEF footprint

Rollout in Telefónica Latinoamérica in 2011
New calling card product in UK and April
Phone a Friend launch in Germany
T. Mex launch with same product as T. O2 UK and DE
T. Spain production launch in June

Status: Leverage Jajah Core and Partners

Microsoft Chooses Jajah and Telefónica to power Microsoft global SME product Lync!

Microsoft brings hosted Office platform for SME’s
Telefónica brings over 15 million SME customers globally on best in class network
Jajah brings core technology platform and know-how

"We knew Jajah had the platform, but after Telefónica acquired Jajah – we were then comfortable that company now had the backing for a project of this scale" ... Microsoft Executive