Cell Phone Handsets Cell Phone Handsets &&Cross Border Top-UpCross Border Top-Up

Mundo MovistarMundo Movistar

Telefonica Movistar Background

Telefonica as a Worldwide leader…

Telefonica has experienced huge enterprise growth in the last twenty yearsFrom Local to Global!

ACCESS 8.9 million

212* million

1984

2007

Today

FINANCEIncome: €2.3 BnAssets: €10.3 BnMkt. Cap: €1.6 Bn

SpainCOVERAGE

HUMAN RESOURCE

S

67,000jobs

More than 224,000 jobs

SERVICES

Different products and services

Voice and data basic services

@

* Number of Access as of 2Q 2007. Updated information includes Cesky Telecom, O2 and Colombia Telecom.

**Capitalization as of 09/18/07

24 countries

Income: €57.1 BnAssets: €109 BnMarket Cap: €97.5 Bn**

Today

Today

Today

Today

Telefonica: remarkable presence in 24 countriesTelefonica: remarkable presence in 24 countries

CHINA

MEXICO

GUATEMALA

EL SALVADOR

NICARAGUA

COLOMBIA

ECUADOR

PERU CHILE

BRAZIL

PANAMA

ARGENTINA

URUGUAY

SPAIN

VENEZUELA

MOROCCO

CZECH REPUBLIC

UNITED KINDOM

IRELAND

GERMANY

ESLOVAQUIA

PUERTO RICO

USA.

Telefonica plays an important role in Mexico as an integrator of communication services and solutions

Internet Access and Content

• Since 1999

• The second site in Mexico focused on companies and real time finance information• More than 400 employees• Earns more than 50 million dollars a year (2006)

Mobile Solutions for Voice and Data

• Since 2001

• Second telecommunications operator in Mexico• More than 22,000 employees (directly and indirectly) • Earns more than 1,200 million dollars per year (2006)

Contact Service Center

• Since 2001

• First Mexican operator of contact centers• Earns more than 134 million dollars per year (2006)• More than 12 thousand employees

Also, they have the support ofFundacion Telefonica and Telefonica I+D, among others

Also, they have the support ofFundacion Telefonica and Telefonica I+D, among others

Movistar Mexico ¡We are 12 million now!Movistar Mexico ¡We are 12 million now!

The growth rate of Movistar customers in Mexico in The growth rate of Movistar customers in Mexico in 2007 is 49% higher, compared to 2006 growth2007 is 49% higher, compared to 2006 growth

5.97

7

6.55

9

7.44

3

9.34

7

6.36

8

6.86

6

8.55

3

10.2

64

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07

10%

5% 8%15%

9%

49%

3%7%

CustomersCustomers

Movistar coverage in Mexico

38%

22%

21%

10%9%

Centre RegionCentre Region

Middle North RegionMiddle North Region

Border StatesBorder States

Mexico ValleyMexico Valley

South and South EastSouth and South East

Main regions with immigrants Main regions with immigrants traveling to the USA:traveling to the USA:

Nationwide coverage

Telefonica Mundo Movistar

www.movistar.com

Mundo MovistarMundo Movistar• Creation of the largest Hispanic telecommunications community• Telefonica as the leader of the Spanish speaking market, supported by its

international presence, is launching two innovative new products:

MOVISTARMOVISTAR Cell Phone Handset PacksIncludes a cell phone handset & minutes

MOVISTARMOVISTAR Cross Border Top-Up (iTop-Up) International refills for prepaid phones in other countries

Packs

Int’l Top-Up

Mundo MovistarMundo MovistarInternational Store:

Customer buys a cell phone or pays for an international refill which will be delivered to its friend or relative in another Movistar country.

Movistar countries in this first phase: USA, Mexico, Colombia, Ecuador and Peru. Other countries will eventually join this project.

$

INTERNATIONAL TOP-UP

Refills from $10 to $70 USD paid by a customer in one country. The equivalent amount will become minutes at the destination country

INTERNATIONAL PACKS

Prepaid phones sold in any Movistar country, which are delivered to any Movistar country, excepting USA

Features and Benefits

• Keep in touch with your family & friends• Real time: refilled minutes appear on

your loved one’s phone immediately• Safer, cheaper and more convenient

PeruPeru

1. Sender wants to refill a family member’s cell phone in another Movistar country

2. Sender goes to a location that provides Movistar refills

3. Clerk enters the Top-Up amount and the recipient’s cell phone number to the iPayStation Network interface

4. The iPayStation Network processes the transaction and prints a receipt

Monument Market Los Angeles 91026 213-390-2168

Date: 01/01/05Time: 10:01am

SALE

Transaction# 1221Entry ManualSALE $40.00

Mundo Movistar53-2876-1234

iPayStation Ref#1234567Site ID: 7654321

Questions? Call iPayStation(978) 632-6798

GRACIAS POR SU VISITA !

Monument Market Los Angeles 91026 213-390-2168

Date: 01/01/05Time: 10:01am

SALE

Transaction# 1221Entry ManualSALE $40.00

Mundo Movistar53-2876-1234

iPayStation Ref#1234567Site ID: 7654321

Questions? Call iPayStation(978) 632-6798

GRACIAS POR SU VISITA !

Receipt

5. Cell phone is immediately topped up. A text message is sent to the recipient advising them of the transaction

Top-Up Transaction Flow (Refills)

Handset Sales Flow for MEXICO

1. Sender wants to buy a mobile phone for a family member in a Movistar country. He goes to a store that sells Movistar phone PACKS.

5. Sender calls recipient and provides PIN order number and Movistar contact number

3. Clerk enters the sale by selecting the desired phone listed on the POSA terminal

2. Sender decides which phone to purchase

6. Recipient or sender calls Movistar number and speaks to agent

4. Customer Purchases a PACK CARD w/ Hand set Specifications and a PIN ORDER Number

7. Agent obtains PIN and shipping information

9. Phone isdelivered atrecipient’s home address

8. Movistar distributor in Mexico ships the phone to recipient

Movistar Mexico PacksAll packs in Mexico include:

Minutes for $350 pesos, in which the first equivalent $50 pesos are loaded when the handset is activated. The remaining additional $300 pesos will be charged as the customer makes subsequent refills

Example: If the customer refills $200 pesos, this amount plus another $200 pesos will be added to his/her credit, up until it reaches the $300 pesos limit

Pack prices are in USD, although minutes are expressed in Mexican pesos, as minutes will be used in Mexico

Prices include taxes (IVA 15%) Sender pays for the Pack, whose price

includes the delivery fee, so the recipient does not have to pay anything when receiving the handsetPACK CARD

Starting at$110 USD

HIGH END

Movistar Mexico Mobile Handset Models

Mundo Movistar offers different models and different brands to choose from:

Starting at$170 USD

PREMIUM

Starting at$70 USD

BASIC

J100

OT550 K310

Z3

U6

5300

Z550X686

C261 L6

Models and pack prices may change every 3 to 6 months, in order to keep pace with the Market:

• Competitive prices

• Up to date models

• Each country offers different models

Special Edition Phones coming soon

$62 Usd $62 Usd $97 Usd $97 Usd

Delivery fee included

Sony Ericsson J110 (Chivas)

Sony Ericsson K200 FMF (Mexican National

Soccer Team)

Movistar International LD ratesRates per minute from Latam to USA(1) as of Nov/07

Colombia Rate per minute to a preferred international number. Includes taxes.

Rate applies all day, any schedule. Includes taxes.

Rate per minute to destination. Includes taxes.

Rate per minute to destination. Includes taxes.

Rate applies to prepaid customers and those with the “Movistar per Call” plan.

For those customers with a better international long distance rate, the best rate will be applied accordingly with their plan hired. Rate includes taxes. All Mundo Movistar customers will have their service activated with the plan “Pagamenos” when first receiving their pack. If they wish to migrate to another plan, the first change will be free of charge. For the second and further the fee is $23 pesos.

Rate per minute to destination. Includes taxes.

Rate per minute to destination. Includes taxes.

Customers with lower rates, will have the best rate applied.For post paid customers, this rate applies only to additional minutes.

This rate applies to a fixed cellular phone previously hired. Includes taxes.

Rate per minute to a preferred international number. Includes taxes.

Rate applies all day, any schedule. Includes taxes.

Rate per minute to destination. Includes taxes.

Rate per minute to destination. Includes taxes.

Rate applies to prepaid customers and those with the “Movistar per Call” plan.

For those customers with a better international long distance rate, the best rate will be applied accordingly with their plan hired. Rate includes taxes. All Mundo Movistar customers will have their service activated with the plan “Pagamenos” when first receiving their pack. If they wish to migrate to another plan, the first change will be free of charge. For the second and further the fee is $23 pesos.

Rate per minute to destination. Includes taxes.

Rate per minute to destination. Includes taxes.

Customers with lower rates, will have the best rate applied.For post paid customers, this rate applies only to additional minutes.

This rate applies to a fixed cellular phone previously hired. Includes taxes.

Ecuador

El Salvador

Guatemala

Mexico

Nicaragua

Panama

Peru

0.26

0.44

0.10

0.17

0.03

0.17

0.18

0.20

$ USD$ USD NOTESNOTES

(1) Rates may change periodically, please check for recurrent updates

Movistar “Pagamenos”

Because not all your calls are the same, the new Movistar “Pagamenos” - it’s for you.

If your calls are short (less than 2 minutes) they are billed per minute, and if they last longer (up to 30 minutes) they are billed per call.

Because not all your calls are the same, the new Movistar “Pagamenos” - it’s for you.

If your calls are short (less than 2 minutes) they are billed per minute, and if they last longer (up to 30 minutes) they are billed per call.

“¡ Per minute or per call ! ”

30 Minutes

$11.50 pesos

~ $1.03 usd

Bruce Burkebruce@ipaystation.com Director of Business DevelopmentiPayStation, LLCwww.ipaystation.com 6262 142nd Ave N # 201Clearwater, FL 33760T: (727) 474-3025M: (727) 612-5775