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Safe Harbour

This presentation discusses T-DataCorp's business model, infrastructure, customer base, and plans for future growth in domestic and new markets. It also highlights the company's focus on data services, internet access, and value-added services.

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Safe Harbour

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  1. Safe Harbour This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situation relating to the Company . Such forward looking statements 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. Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. 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 presentation, including, without limitation, changes in Telefónica´s business or acquisition strategy or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged to consult the Company´s Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission.

  2. Strategic focus • Capture the Data Services/VAS growth opportunity leveraging on massive client base in domestic markets • Strengthen position from selective expansion in new markets: attractive customer bases and focus on Corporates and NEPs • Leverage infrastructure/presence to serve multinational customers

  3. Messages A ROBUST BUSINESS MODEL BUILT AROUND CUSTOMERS Growing operating and financial results A reality today; a plan for future growth

  4. The key points of T-DataCorp business model • Own infrastructure of data/ IP network equipment and “hosting” centers (T-DataCorp Internet Centers) • Selective deployment of basic infrastructure, mainly international network through Emergia • Corporates and NEPs directly in domestic and new markets • Other corporate customers through Telefónica WLOs in domestic markets and through third parties in new markets • Telefónica Group companies • Leverage infrastructure/presence to serve MNCs • Data Services, Internet access and Value Added Services Services Infrastructure Customers T-DataCorp Geographical areas • Domestic markets: Spain and LatAm • Selective expansion: Europe and LatAm

  5. Direct Sales Force Non-direct Sales Force T-DataCorp customer model in domestic markets DEMANDED SERVICES COMMERCIAL TREATMENT CUSTOMERS 2000 • Personal solutions for their requirements. • Basic communication services and Internet • Internet access and presence • Dedicated and direct from T-DataCorp • Non-direct: WLO and other channels • Non direct: WLO and other channels 5,200 Corpo- rations - Large Companies New Economy Players* 24,500 SMEs The largest direct sales force for data services in Spain and Latin America (more than 400 people) * ISPs, Portals, ASPs B2Bs, B2Cs...

  6. Strengthening position in new markets: Latin América Today, Brazil and México represent within Latin América 60% of data market and 81% of Internet homes • Brazil out of Sao Paulo: Total market 2000 (E): 1 Bill-1.3 Bill €; 2004 (E): 3 Bill-4 Bill€ • Starting operations in January 2002 • National offer to current Sao Paulo corporate customers • Selective expansion to the principal Brazilian cities to capture local and national corporate and NEPs • México: Total market 2000 (E): 1 Bill-1.5 Bill €; 2004 (E): 4 Bill-5 Bill€ • Leveraging on existing operating company Optel • Building on the local presence of the global T-DataCorp customers • Expanding the total market through the development of public data networks, capturing additional corporate and NEPs • Other countries: Filling the gaps to complete the offer to local and regional/multinational customers

  7. Strengthening position in new markets: Atlanet • Merge between Acea-Telefónica and Telexis (Fiat Group telecom company). • Atlanet’s current customer base: more than 300 large companies and corporations from Fiat/Ifil and Acea Groups. • Focus on becoming the second integrated data service provider to corporate customers and NEPs in Italy: • Main provider of value added services for the NEPs. • More than 20,000 customers expected by 2004 ranging from large corporations to SMEs companies. • Revenues CAGR 2001-2004: 70%-80%

  8. Strengthening position in new markets: mediaWays • Second IP-based network services provider in Germany • Extensive capillary IP network in Germany (270 POPs, more than 200,000 IP ports and 2.6 Bill. minutes of internet access traffic per month) • Extensive value-added product offering (switched access to internet, Web-hosting/ASP, VPNs, Broadband and value added services). • Solid customer base (e.g. AOL, Lycos-Europe, RTL, Deutsche Bank, Bertelsmann, Bosch, Xerox, Novell and Daimler Chrysler) • Strong, industry knowledgeable management. Staff of less than 200 employees; revenues 2000 above 300 M€. • Synergies with UMTS for the transport of IP traffic and value added services

  9. Leveraging infrastructure/presence to serve MNCs: AOL Significant international footprint, IP services experience, sophisticated services portfolio and recognized quality of services are the key factors considered by AOL to select T-DataCorp. • Telefónica began conversations with AOL, as it was the number one customer of mediaWays. • In December 2000, Telefónica&AOL entered into an agreement to provide IP access and transmission capacity through the T-Data international network, in Latin America and Europe. This agreement will run for several years. • The agreement represents an additional step in the consolidation of the NEPs customer strategy approach as well as in the international expansion process of T-Data.

  10. Financial Institutions Other First Class Customer Base New customers NEPs Recent agreement with AOL to provide IP access and transmission capacity through T-Data’s international network, in Latin America and Europe.

  11. Ascending the value chain: The benefits of broadband IP solutions & Systems integration: • Tailored solutions • Networks, sistems and applications outsourcing Hosting & Value Added Services: • Hosting&Housing Data Services and Internet: • Virtual Private Networks (X.25, FR, ATM, IP) • Internet access Complementary revenues Value added services create loyalty

  12. Global Internet Traffic International Internet traffic T-DataCorp concentrates international Internet traffic of the entire Telefónica Group leveraging on Emergia’s broadband infrastructure Local Internet traffic in Spain Internet backbone International Internet traffic Local Internet traffic in Brazil International Internet traffic International Internet traffic Local Internet traffic in Argentina

  13. Infrastructure model Owned Mainly leased Internet Centers (TICs) 100% owned by T-DataCorp Packet switching nodes and Management Centers (IP, X.25, FR, ATM) • Mainly leased to WLO in domestic markets. Basic infrastructure (LD transmission and access) • T-DataCorp will leverage on the strong infrastructure capacity of Telefónica Group. Focus on infrastructure efficiency

  14. TIC TIC TIC TIC TIC TIC TIC Atlanet NYC - - NS NYC NYC LON LON AMS 4 4 FRA BRU BRU HOU PAR PAR MIA_SD MIA_SD ZUR ZUR MTY VIE VIE MIL MIL MAD MAD SAL SAL SJU SJU ROM ROM SAM SAM - - 1 1 BOG BOG Emergia/Others Infrastructure T. DataCorp Col Telef Perú TeleSP LUR LUR • Management SAO SAO SCL_FL SCL_FL • Local in national networks SCL_PR SCL_PR MON MON Data Infrastructure • Centralized for international backbone BUE_BA BUE_BA BUE_C1 BUE_C1 (*) Includes IPnetwork, X.25, FR and ATM International Presence and Internet Centers International bandwidth 2001(*): 16,4 Gbps (3,5 Gbps in 2000)

  15. Uruguay Geographical deployment of T-DataCorp T-DataCorp’s strength in domestic markets: • large customer base • wide local networks London México Brussels Germany Austria Paris Zurich Colombia Italy Spain • Strategic expansion guide-lines: • Strategic areas • Previous customer existence: • Local • Multinationals • Focus expansion on areas where the Telefonica Group has other business lines Brazil Perú Sao Paulo Chile T-DataCorp dominant player T-DataCorp new entrant Support to the Data business line POP Argentina

  16. T-DataCorp positioning in domestic markets Corporations Large Revenues Revenues Direct and companies 2000 (MM€) CAGR sales NEPS and SMEs Proforma (01-04) force SPAIN 2,580 18,000 860 (*) 20-25% 166 SAO PAULO (1) 1,440 2,300 65 42-48% 140 ARGENTINA 730 1,800 125 13-17% 53 PERU 450 1,350 60 30-35% 51 (*) Telefónica Sistemas (12 months) included (1) Out of Sao Paulo not included

  17. T-DataCorp positioning in new markets Estimated revenues ( Mill. €) 2001 CAGR 2001-2004 Second data network in the country+BBVA network. Data licence starting operations July 2000. OPTEL acquisition (4th data operator in México). Deployed a Viena fiber ring. Second IP-based network services provider with 30% market share of Internet traffic. Acquisition of Telexis (more than 1,000 customers) and merger with ACEA-TEF. Ownership Present position 35-40 3- 5 20-25 40-50 550-600 175-200 LatAm 35-45% 70-80% 85-95% 30-40% 30-40% 70-80% Colombia 50% 100% 85% 100% 100% 34% Uruguay México Europe Austria Germany Italy

  18. Messages A robust business model built around customers GROWING OPERATING AND FINANCIAL RESULTS A reality today; a plan for future growth

  19. Deployment of Local IP Networks CAGR (00-04) 55-60% 1,175,000 420,000 Switched Access Ports 194,636 Local IP Networks 2000 2001 2004 CAGR (00-04) 315-325% 96,000 Dedicated Access Ports 18,000 300 2000 2001 2004

  20. TIC’s 39,000 CAGR (00-04) 110-120% 22,000 TICs leased m2 1,792 2000 2001 2004

  21. Financial Highlights Revenue Breakdown by Region % CAGR (01-04) 35%-40% 1,487 Mill.€ Proforma 45-55% 20-25% 35-40% 2000 2001 2004 Europe Spain América EBITDA Breakdown by Region % CAGR (01-04) 190-230% 59 Mill.€ Proforma 85-95% 25-35% 95-105% 120-135% 2000 2001 2004 Europe Spain Int’l network América

  22. Financial Highlights Revenue Breakdown by Service 35-40% 1,487 Mill.€ Proforma 2000 2001 2004 Data & Internet Hosting & ASPs IP Solutions Other %CAGR 30-35% 95-105% 35-40% 0-(5)% (01-04)

  23. T-DataCorpFinancial Targets PROFORMA 2000 (M€) % CAGR 00-04 T-Data Group • Revenues 1,487 35%-40% • EBITDA 59 85%-95% • % EBITDA 4.0% 4pp-5pp • Cumulative Capex (Mill.€) 428 400-500 (annual increase) (annual average)

  24. Messages A robust business model built around customers Growing operating and financial results A REALITY TODAY; A PLAN FOR FUTURE GROWTH

  25. Summary • A reality today with 920 Mill. € in sales (1,487 Mill. € proforma) and 45 Mill.€ positive EBITDA (59 Mill. € proforma). • For the period 2001-2004 we are aiming at 35%-40% revenue CAGR and 85%-95% EBITDA CAGR. • To get there we will focus our efforts on : • Extracting the full value of our current massive customer base in our domestic markets • Building our presence in new markets where we have selectively invested T-DataCorp

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