Daniel Arias of Telefonica Internacional argues that Latin America is a major success story in telecom and currently undergoing revolutionary progress in both fixed and mobile broadband in terms of deployment and penetration. Content is increasingly becoming available driven by many creative cultural reasons in Latin America and the Hispanic approach. Governments have been active in setting national broadband policies - and countries such as Brazil and Chile have placed substantial emphasis on these - but he points out broadband success will continue to come from a competitive private sector environment and although there is a role for government intervention it should be limited to those areas beyond the reach of the private sector.

1. Daniel Arias Director, Regulatory Affairs, Latin America Telefónica Internacional SA 1st. December 2009 Considering intervention in BB markets in Latin America

2. Telefónica: one of the leading Telco players in Latin America and Worldwide * Total accesses (as reported by companies) = Fixed lines + Mobile subscribers + Narrow and Broad Band Internet + Pay TV. America Movil + Telmex + Telmex international Total accesses worldwide Top 10 Million accesses as of September ‘09 Total Accesses (Sep ‘09) 163.7 million Argentina : 21.4 million Brazil : 64.2 million Central America : 6.1 million Colombia : 11.5 million Chile : 10.4 million Ecuador : 3.5 million Mexico : 16.8 million Peru : 15.7 million Uruguay : 1.6 million Venezuela : 11.9 million 2 1 1 2 2 1 1 1 2 2 1 1 1 2 2 Wireline market rank Mobile market rank

3. Telecoms in Latin America: A Success Story Years of delay between USA and Latin America in time-to-market USA Latin Am. FO 1970 +21 Dig.Line 1980 +13 Cell. 1983 + 6 IP Net. 1992 + 6 Opt. Net 1993 + 2 Wireless Data 1999 + 1 3G 2004 + 2 Source : ITU Wireless Penetration 0,0% 20% 40% 60% 80% 100% 120% 140% USA Europa Argentina Brasil Chile Colombia México Perú Venezuela

4. Telecoms in Latin America: Looking forward ICT Market CAGR 2009-2013 Western Europe Asia Pacific North America Latin America World Source: Gartner Dataquest Market Databook (Sept 09) Source: Gartner Dataquest Market Databook (Sept 09) Asia Pacific Latin America North America Europe + 100% Wireless Penetration 2009-2013E Mobile Broadband 2009-2013 Fixed Broadband 2009-2013 Latin America Latin America Europa Asia Europa USA USA Asia Source: OVUM (July 09) Source: Pyramid (Feb 09)

6. Broadband in Latin America relies on private initiative Monopoly 2 operators 3 operators 4 or + operators Competitive pressure has driven the growth in Latin America markets Source: Pyramid Research