Axalto Supplies Telefonica Moviles with Spain's First 128KB USIM Cards.

Business Editors/High-Tech Writers

3GSM World Congress 2004

CANNES, France--(BUSINESS WIRE)--Feb. 24, 2004

Axalto, a Schlumberger company, and Telefonica Moviles Espana (TME) have signed an agreement making Axalto the supplier of the first dual (GPRS/UMTS) 128 KB USIM cards which Telefonica Moviles is already providing to corporate customers.

Telefonica Moviles Espana has recently launched 'Oficin@ MoviStar UMTS', the first 3G service to be marketed in Spain by a mobile telephone operator, which provides high-speed data transmission. The product comprises a PCMCIA UMTS/GPRS card, which includes the 128 KB USIM card supplied by Axalto.

Telefonica Moviles is the first Spanish operator to launch this type of card on the market. The new USIM cards can also be used in current GSM handsets and so provide TME customers with new advanced functions in their mobile phones such as roaming service facilities, more short text message (SMS) storage capacity and the integration of the MoviStar menu.

"Telefonica Moviles Espana is in a prime position to confirm its leadership of the Spanish operator marketplace with the introduction of commercial 3G services", explains Philippe Vrignaud, director mobile communications of Axalto. "In our discussions, TME showed high expectations in terms of local support, technological requirements as well as demonstrated the importance to them of sustainable return on investment from the applications. With this Spanish 3G network initiative by TME, Axalto is happy to sustain and pursue an historical partnership with the leading operator"

"Axalto is most experienced supplier of 3G cards in the marketplace and a highly reliable partner to be delivering 128 KB cards in volume; as we embark on this important communications initiative in Spain, it is key to have the support, expertise and experience of Axalto behind us", says Luis Ezcurra, general Manager of Services at Telefonica Moviles Espana. "In addition, its solution features all the advantages of interoperability and compliancy with the latest industry standards".

About Axalto

Axalto, formerly known as Schlumberger Smart Cards & Terminals, is the world's leading provider of microprocessor cards (Gartner 2003, Frost & Sullivan 2003) -- the key to digital networks -- and a major supplier of point-of-sale terminals. Its 4300 employees serve customers in more than 100 countries, with worldwide sales reaching 3 billion smart cards to date. The company has more than 20 years' experience in smart card innovation and leads its industry in security technology and open systems.

Axalto continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Smart card solutions provide convenience, security and privacy to public and private services operators, their customers and end users. For more information, visit us at www.axalto.com

About Telefonica Moviles Espana

Telefonica Moviles Espana (www.empresa.movistar.com) is the operator of Telefonica Moviles Group in the Spanish market, where it has more than 19.66 million active customers at the end of 2003 and offers a comprehensive portfolio of data services and applications using the latest mobile technologies, including GPRS, MMS and UMTS. Telefonica Moviles, S.A. manages all the Telefonica group's mobile operations throughout the world. It is one of the world's largest mobile telephony companies and leader in the Spanish- and Portuguese-speaking mobile telephony market, with an active customer base of over 52 million. The company reported net profit of euros 1.607,9 billion in the end of 2003. Telefonica Moviles' shares are traded on the Spanish and New York Stock Exchanges with the ticker TME.