Telefonica Moviles' Net Income Rose 24% in Third Quarter 2005.

MADRID, Spain -- Telefonica Moviles (NYSE:TEM):

--Quarterly net income totalled 614.9 million euros, bringing the figure for the first nine months of 2005 to 1,543 million euros. This represents an increase of 8.8% over the same period in 2004, much higher than the 0.6% rise posted in the first half of the year.

--Consolidated revenues rose 45.9% in the third quarter and 45.3% in the first nine months of the year to reach 12,050 million euros.

--The pace of OIBDA growth increased, as it totalled 1,648 million euros in the third quarter (+31.4%) and 4,227 million euros in the first nine months of the year (for a year-over-year increase of 21.1%).

--In Spain, the commercial efforts made throughout the year by Telefonica Moviles Espana continue to produce positive results. Service revenues increased 7.1% during the first nine months. Likewise, Telefonica Moviles Espana showed a strong improvement in its OIBDA margin, which reached 49.1% in the third quarter, or 5.9 percentage points higher than in the second quarter of 2005.

--Revenues from the Latin American operators rose 150.4%, to represent 45.2% of Group revenues. The Group's Latin American operators achieved an OIBDA margin of 26.2% in the third quarter (an increase of 8.6 p.p. over the 17.6% posted in the second quarter) and made a positive contribution of 286 million euros to Group Operating Cash Flow during the first nine months of 2005.

--Contributing to the Latin American operators' performance was the rapid and efficient achievement of synergies from the integration of the BellSouth assets, which has been obtained in less than a year. These synergies are already having a very positive impact on all the items in the Group's income statement.

--Telefonica Moviles' managed customer base surpassed 89 million in September, for a year-over-year increase of 52%, after registering net adds of 2.6 million during the third quarter and 11 million in the year to September 30.

--The customer base in Spain rose 5% from September 2004. Net adds in the third quarter totalled 251,000, or four times the number in third-quarter 2004. Managed customers in Latin America also showed strong growth, reaching 65.6 million, for a year-over-year increase of 75.7%.

NOTES ON THE PRESENTATION OF RESULTS

This document contains financial information/data reported under International Financial Reporting Standards (IFRS). These are preliminary, unaudited data, as full compliance with IFRS is not totally applicable until 31/12/2005. As a result, this is not definitive information as it is subject to potential future modifications. This financial information has been prepared based on the principles and regulations known to date and under the assumption that IFRS principles presently in force will be the same as those that will be adopted to prepare the 2005 full year consolidated financial statements. Consequently, this document does not represent a complete and final adoption of these regulations.

With respect to the comparability of financial information and changes in the perimeter of the consolidated Group, it should be noted that:

On 23 July 2004, the company acquired 100% of Telefonica Movil Chile. Since that date, Telefonica Movil Chile is integrated within Telefonica Moviles' consolidation perimeter through the full consolidation method.

Following the voluntary tender offers for Tele Sudeste Celular (TSD), Tele Leste Celular (TBE), Celular CRT (CRT) and Tele Centro Oeste (TCO) launched by Brasilcel, directly and indirectly through its subsidiary Telesp Celular Participacoes (TCP) in October 2004, Brasilcel's stakes in the mentioned companies' share capital have increased.

The capital increase carried out by Telesp Celular Participacoes (TCP) in January 2005 was fully subscribed for an amount of approximately 2,054 million reais. The stake held by Brasilcel in TCP stands at 66.1%.

In July 2005, Brasilcel capitalized the tax credits used by TCO, CRT, Telesudeste and Teleleste resulting from the goodwill in those companies. This capitalization did not entail any cash outflow for Brasilcel, but it has caused an increase in Brasilcel's shareholdings in those companies. Brasilcel's stakes in the companies' share capital have increased to: 91.0% in TSD, 50.7% in TBE, 66.4% in CRT and 34.7 in TCO %.

Following the acquisition of 100% of BellSouth Group's stake in the mobile operators in Ecuador, Colombia, Guatemala, Panama, Nicaragua, Peru, Uruguay and Venezuela, these companies have been integrated within the Telefonica Moviles' consolidation perimeter since November 2004 through the full consolidation method.

In January 2005 the acquisition of 100% of BellSouth Chile and BellSouth Argentina (Movicom) was completed. Since January 2005, these companies are integrated within the Group's consolidation perimeter through the full consolidation method.

Following the tender offer launched for 0.1516% of Comunicaciones Moviles del Peru, S.A.'s share capital in April 2005, and concluded in May, Telefonica Moviles's stake in the company increased to 99.89%.

In June 2005 the merger between Comunicaciones Moviles Peru, S.A. and Telefonica Moviles Peru, S.A.C. was carried out. Telefonica Moviles's stake in the resulting company, Telefonica Moviles Peru, S.A., now stands at 98.03%.

During 2005, Telefonica El Salvador Holding, S.A., fully-owned by Telefonica Moviles, S.A., has acquired an additional stake in Telefonica Moviles El Salvador, S.A.. Following the acquisition, Telefonica El Salvador Holding, S.A.'s stake increased to 99.02%.

On April 20, 2005, once the permission of the relevant regulatory authorities was obtained, Telefonica Moviles, through its 100% controlled subsidiary TEM Puerto Rico, Inc., carried out the conversion of the promissory notes which on that date represented 49.9% of the share capital of of the Puerto Rican company New Comm Wireless Services, Inc. After this transaction and a capital increase, the Telefonica Moviles Group's participation in that company is now 49.3%. This investment is provisioned in the Group's financial statements and did not involve any cash outflow.

Following the acquisition of an additional 0.40% stake in Telefonica Moviles Panama in 2005, as a result of the tender offer launched in 2004, Telefonica Moviles' stake in that company increased to 99.98%.

The financial statements for fiscal year 2004 and 2005, and the corresponding comments regarding our operations included herein, reflect the current composition of Telefonica Moviles Group at each point in time. As a result, given the changes in the consolidation perimeter over the last 12 months, the consolidated results and those of some of our operators are not comparable between each period.

As a consequence of the evolution in Venezuelan economy during this year, Telefonica Moviles has suspended the inflation adjustment of its subsidiary Telcel's financial statements, with retrospective application from January 1, 2005. This decision is in line with the consensus reached by the main auditing firms indicating that Venezuela should not be considered as an hyperinflationary economy.

For an easier understanding of Telefonica Moviles' financial statements, the economic stakes held by the Company in each of its subsidiaries, along with the consolidation method used in its consolidated financial statements in each period, are provided.

Madrid, 3 November 2005 - Telefonica Moviles reported net income of EUR 615 million in the third quarter of 2005, a year-over-year increase of 24% (EUR 496 million in 3Q04), leading to net income of EUR 1,543 million in 9M05 (+8.8% vs. 9M04).

The Telefonica Moviles Group operators continued to carry out intense commercial activity during the third quarter of the year. As a result, despite the seasonality typical of the period and the adjustment of the pace of growth to the different market conditions -namely in Brazil, Colombia and Mexico- net adds in 3Q05 stood at 2.6 million customers. The lower level of commercial activity compared to the second quarter of 2005 was due to seasonal factors and to the significant impact of the launch of the movistar brand during 2Q05.

Telefonica Moviles ended September with over 89 million managed customers (+52% vs. 3Q04 and +3% vs. 2Q05). Of the total customer base, 65.6 million corresponded to Latin American operators (+75.7% vs. 3Q04), 19.6 million to Telefonica Moviles Espana (+5%) and 3.8 million to Medi Telecom (+49%).

Telefonica Moviles recorded a sharp year-over-year growth in revenues of 45.9% in 3Q05 and 45.3% in 9M05 (compared to +44.9% in 1H05). Organic growth of consolidated revenues (including the consolidation of Telefonica Movil Chile and of BellSouth's Latin American assets in Argentina, Colombia, Chile, Ecuador, Guatemala, Nicaragua, Panama, Uruguay and Venezuela from 1 January 2004 and assuming constant exchange rates) stood at 15.2% vs. 9M04.

Noteworthy was the solid performance of service revenues, with a 44.2% year-over-year increase vs. 3Q04 and a 43.8% rise in the nine-month period, to EUR 10,642 million.

Handset sales reached EUR 495.9 million in 3Q05 (+60% vs. 3Q04) and totalled EUR 1,588 million in 9M05 (+56% vs. 9M04).

By geographical areas, Telefonica Moviles Espana recorded revenues of EUR 6,621 million in the first nine months of 2005 (+8.2% vs. 9M04). The significant increase in traffic stands as the main driver of the Company's service revenue growth. As a result, service revenues grew by 6.8% year-over-year in 3Q05 and by 7.1% in 9M05.

The consolidated Latin American operators recorded operating revenues of EUR 5,446 million in 9M05 (+150.4%), representing 45.2% of the Group's total revenues (vs. 26.2% in 9M04). Organic growth of these operators' revenues was 25.7% vs. 9M04.

Telefonica Moviles posted a sharp acceleration in the growth rate of consolidated operating income before depreciation and amortisation (OIBDA), which reached EUR 1,648 million in 3Q05 and EUR 4,227million in 9M05. OIBDA advanced 31.4% year-over-year in 3Q05 and 21.1% year-over-year in 9M05, compared to 15.3% in 1H05.

As a result, OIBDA margin in 3Q05 showed a sharp improvement compared to 2Q05 at the majority of the Group operators, with the consolidated OIBDA margin standing at 38.4% (a 7.5 p.p advance vs. 2Q05). The OIBDA margin in 9M05 stood at 35.1%.

The trend in OIBDA compared to 2004 is explained by the increased commercial activity in 2005 and more intense competition in our markets of operation.

OIBDA at Telefonica Moviles Espana stood at EUR 1,143 million in 3Q05, recovering sharply from previous quarters and remaining virtually unchanged year-over-year. Thus, OIBDA for the first nine months reached EUR 3,090 million. We would highlight the positive evolution in Telefonica Moviles Espana's OIBDA margin, which stood at 49.1% in 3Q05 (+5.9 p.p. vs. 2Q05) and 46.7% in 9M05. Stripping out the impact of the rebranding, the OIBDA margin would have reached 47.3% in 9M05 (vs. 51.7% in 9M04).

OIBDA for the consolidated Latin American subsidiaries, in euros, reached EUR 517.4 million in 3Q05. This led to a margin of 26.2%, which represents an 8.6 p.p. advance from 2Q05, driven mainly by lower commercial costs.

The consolidated OIBDA of the Latin American operators stood at EUR 1,201 million in 9M05, three times their contribution to the Group during 9M04. In organic terms, OIBDA from these operators increased 11% vs. 9M04.

Regarding the rest of the main items, we would highlight:

The increase in depreciation (+59% vs. 9M04), primarily due to changes to the Group's consolidation perimeter, including EUR 229 million of amortisation of allocated intangible assets in 9M05 related to the acquisition of Telefonica Movil Chile and the 10 Latin American operators acquired from BellSouth in 2004 and early 2005.

The improvement in income from associated companies, as net losses from companies consolidated by the equity method declined by 67% in 9M05 to -EUR 10.4 million, and remain stable vis-a-vis those recorded in the first half of 2005. Losses attributable to the Group from its stake in IPSE 2000 decline by 17% vs. 9M04, while Medi Telecom maintains its positive contribution to the Group's results in 9M05. Losses attributable to the Group from its stake in IPSE 2000 decline by 17% vs. 9M04, while Medi Telecom maintains its positive contribution to the Group's results in 9M05.

The year-over-year increase of 25% in negative net financial results, substantially lower than the increase of 90.3% in the average net debt balance for the period.

Consolidated net financial debt was impacted by the acquisitions made in 2H04 and January 2005 (Telefonica Movil Chile, BellSouth's Latin American operators and the voluntary tender offers for shares in Brasilcel's subsidiaries). Moreover, on June 15th the dividend approved at the Shareholders' Meeting (EUR 836 million) was paid.

At the end of 3Q05, consolidated net debt stood at EUR 9,463million, 6.0% lower than the previous quarter, thanks to cash flow generation in the period. Proportionate net debt stood at EUR 9,601 million.

The 31.7% effective tax rate in 9M05, mainly affected by the application of certain allowances for export activities in 2Q05, although the fact that there is no tax consolidation in various countries in Latin America detracts from this benefit, increasing the marginal rate.

Consolidated capex, excluding licenses, totalled EUR 1,422.7 million in 9M05. EUR 39.2million were recorded in 9M05 for the acquisition of licenses in Mexico.

Telefonica Moviles reiterates its growth targets for the Group for full year 2005. Assuming constant exchange rates compared to 2004 and excluding changes to the Group's consolidation perimeter, except for the acquisitions of BellSouth Chile and BellSouth Argentina in January 2005, the company expects to achieve:

--Year-on-year growth in consolidated 2005 revenues(1) of 33%-36% in 2005 (43.8% in 9M05 vs. 9M04);

--Consolidated OIBDA annual growth in 2005 in the 23-26% range (19.5% in 9M05 vs. 9M04);

--Year-on-year growth in consolidated operating income in the range of 10-13% in 2005 (4.1% in 9M05 vs. 9M04);

--Consolidated capex, excluding the acquisition of licenses, in 2005 of approximately EUR 2,000MM.

(1) 2005 forecasted revenue growth is based in EUR 11,744MM revenues for 2004. In calculating our forecasts, operating income and operating income before depreciation and amortisation (OIBDA) exclude other unforeseen extraordinary charges and extraordinary revenues for 2005. In 2004, these totalled EUR 100.2MM, and are therefore also excluded. Therefore, operating income and operating income before depreciation and amortisation used as a basis for the Company's forecasts were EUR 4,677.9MM and EUR 3,154.9MM, respectively. Personnel and real estate restructuring costs are included as operating costs/revenues.

SPAIN

At the end of September, 2005 the Spanish market had surpassed 41.5 million lines, equivalent to an estimated penetration rate of 93.4%. This amounts to year-over-year market growth of 1.5% in 3Q05 and 9% in 9M05.

The third quarter was marked by intense commercial activity - particularly in customer adds-, by the positive net portability balance -overall, but especially notable in the contract segment- and the sharp increase in managed traffic.

As for commercial activity, Telefonica Moviles Espana leveraged in 3Q05 on the strong commercial activity carried out during the previous quarter, leading it to post net adds of over 250 thousand, more than four times the 3Q04 figure (58 thousand customers), fuelled by the positive performance of the contract segment.

As a result, by the end of 3Q05 the weight of the contract segment over the total customer base increased to 52.5%, showing a growth of 5 p.p. vs. 3Q04 and 1.6 p.p. vs. 2Q05. This trend reflects both the increase in contract gross adds (more than 500 thousand in 3Q05, setting a quarterly record for Telefonica Moviles Espana) as well as the high number of migrations from prepaid registered in the quarter -almost 300 thousand, 27% more than the previous quarter and 34% more than in 3Q04.

These factors drove the Company's customer base to 19.6 million, a year-over-year increase of 5%.

We would also underscore the performance of number portability, which showed a positive net balance of almost 40 thousand lines in 3Q05, the best figure recorded since 4Q02 and 136% higher than 2Q05. This performance was driven by the increasing positive balance in the contract segment, which stood at almost 84 thousand lines, around 50 thousand more than recorded in 3Q04 and clearly far superior to the 2Q05 figure.

Meanwhile, Telefonica Moviles Espana upgraded close to 1 million handsets during 3Q05, bringing the total for the first nine months of the year to over 3.4 million (+28% vs. 9M04).

Telefonica Moviles Espana's successful commercial results have been heavily underpinned, both in acquisition and retention activities, by the price initiatives implemented last quarter, which have been very well received by our customers. In this regard, we would point out that by the end of 3Q05 around 3 million movistar customers had signed up for "Mi Favorito" (My favourite number) and almost 1.5 million for "Mis Cinco" (My five numbers), thus reinforcing and consolidating our customers' sense of belonging to the largest community of mobile users in Spain.

Continuing with Telefonica Moviles Espana's pricing initiatives, 3Q05 was highly shaped by the summer promotion known as "100x1", which has achieved over 2.3 million gross adds in the period.

In addition, the "Anticipame Saldo" (Upfront credit) campaign was launched in 3Q05, and has already been used on more than 5 million occasions.

As a result, the commercial initiatives launched in 2Q05 and reinforced during 3Q05 drove MOU to 158 minutes in 3Q05, 2.7% higher than in 2Q05 and 15.0% more than in 3Q04, marking the highest figure in the company's history. MOU for 9M05 rose to 149 minutes (+16.3% vs. 9M04), bringing total traffic carried to almost 14,000 million minutes in 3Q05 (+24.4 vs. 3Q04) and almost 38,000 million minutes in 9M05 (+19.9% vs. 9M04), both record highs for Telefonica Moviles Espana. Despite the sharp increase in traffic, Telefonica Moviles Espana's networks' quality indices are maintained, improving relative to last year.

All of the above drove TME's voice ARPU to EUR 32.4 in 3Q05 and EUR 30.9 in 9M05 (+9.2% vs. 9M04). Excluding the impact of traffic promotions, year-over-year growth in voice ARPU would have been 3.2% in 9M05. Thus, even despite the fact that the Company is clearly in the process of cutting prices, Telefonica Moviles Espana continues to show a positive trend in ARPU.

Con respecto al negocio de datos, y teniendo en cuenta el significativo crecimiento de las comunicaciones interpersonales sobre voz, el ARPU de datos de Telefonica Moviles Espana alcanzo los 4,5 euros en los nueve primeros meses de 2005, con un crecimiento interanual en el entorno del 7,2%, elevandose hasta el 7,3% al excluir el efecto de las promociones.

In terms of data services, bearing in mind the significant growth in P2P voice traffic, Telefonica Moviles Espana's data ARPU reached 4.5 euros during the first nine months of 2005, for a year-on-year increase of 7.2%, which would be 7.3% if the effect of promotions were excluded.

We would point out that non-SMS data services are becoming the main driver of this growth. Revenues from non-SMS data services grew by almost 45% year-over-year in 9M05, representing almost 42% of the Company's data revenues in 3Q05.

In the year through September, the weight of revenues from downloads, browsing and data transmission over total data revenues reached 17% (compared to 12% in the first nine months of 2004). SMS represented 62% (during the first nine months of 2004, its weight was 72%).

Finally, Telefonica Moviles Espana's total ARPU stood at EUR 37.1 in 3Q05 (+6.0% vs. 3Q04) and EUR 35.4 in 9M05 (+9.0% vs. 9M04). Excluding the impact of promotions, total ARPU would have been EUR 34.2 in 3Q05 (+1.9% vs. 3Q04) and EUR 33.0 in 9M05 (+3.7% vs. 9M04).

Highlights of Telefonica Moviles Espana's financial results include:

Revenues show 8% year-over-year growth in 3Q05 and +5% compared to 2Q05, to over EUR 2,300 million, and maintain cumulative year-over-year growth in 9M05 over 8%, to EUR 6,621 million.

Revenue growth continues to be driven by the increase in service revenues, which in 3Q05 registered year-over-year growth of 6.8% and were up 9% over 2Q05. This brings year-over-year growth in 9M05 to over 7%. In addition, we would highlight that customer revenues continue to consolidate as the Company's growth driver, registering year-over-year rates for 3Q05 and 9M05 of over 9% and 9.2%, respectively.

Handset sales fell vis-a-vis the previous quarter, but were up 17% year-over-year in 3Q05, totalling EUR 241 million. The percentage of commercial costs (including SAC, SRC and advertising) over service revenues ex-loyalty points fell by more than 30% compared to 2Q05 and by 5.5% vs. 1Q05, standing at 13.3% in 3Q05 and 15.5% in 9M05. The year-over-year increase is the result of increased commercial activity vs. 3Q04.

Telefonica Moviles Espana's OIBDA stood at EUR 1,143 million in 3Q05, representing an OIBDA margin of 49.1%, up 5.9 p.p. vs. 2Q05. OIBDA surpassed EUR 3,000 million in 9M05, representing a margin of 46.7% (and around 47.3% if we strip out the impact of the rebranding campaign).

Capex totalled EUR 507 million in 9M05. Telefonica Moviles Espana continues with the deployment of its UMTS network in order to provide an increasing number of customers with enhanced service and a wider range of technologies.

Finally, we must point out that the telecommunications market regulator (CMT) introduced modifications on termination rates for the three Spanish market mobile operators. The new tariffs will be effective from 31 October, and in the case of Telefonica Moviles Espana they represent a reduction in the average price per minute of 10.57%.

MOROCCO 

At the end of 3Q05 Medi Telecom's customer base stood at over 3.8 million (+49.2% vs. September 2004), with net adds of 399 thousand in 3Q05, 82.4% more than in 2Q05.

Financial results continue to show a solid performance, with revenues in 9M05 of EUR 298 million (+22% vs. 9M04).

The OIBDA margin in 9M05 stood at 38.6% (41.3% in 9M04), despite the sharp rise in net adds of 79% in 9M05 vs. 9M04. OIBDA was nearly EUR 115 million in 9M05 (+14% vs. 9M04).

LATIN AMERICA

BRAZIL

In line with the seasonality typical of the quarter and following a strong second quarter marked by intense commercial campaigns, the pace of growth in the Brazilian market slowed down in the third quarter, even while maintaining its solid expansion trend.

As a result, at the end of September 2005 the total market stood at 80 million customers, equivalent to a penetration rate of 43.4% (46.5% in Vivo's areas of operation.).

Against a backdrop of continued intense competition, Vivo has targeted its commercial initiatives at high-value customers, raising entry barriers in the prepaid segment, fostering prepaid to contract migration and increasing its customer retention efforts. This strategy resulted in a significant drop in subscriber acquisition actions in 3Q05, while customer retention initiatives have allowed monthly churn rate to remain practically flat compared to 3Q04, despite competitors' increased aggressiveness.

In this context, Vivo's customer base stood at 28.84 million at the end of September (+17% vs. 3Q04). We would highlight the increasing contribution of the contract segment to total net adds, representing 35% in 3Q05 versus 14% in 2Q05 and 10% in 3Q04.

In terms of customer usage, MOU in 3Q05 was 76 minutes (87 minutes in 3Q04), impacted by trends in incoming MOU. ARPU in 3Q05 was 28.2 reais (32.1 reais in 3Q04).

The trend in these indicators continues to be shaped by the impact on outgoing revenues of the repositioning of prices in the contract segment in the face of aggressive competition, as well as by the negative impact of lower incoming traffic from fixed line operators.

However, in line with the Company's focus on high-value segments, we would highlight the positive performance in contract ARPU, which in 3Q05 showed growth, both compared to 2Q05 and to 3Q04.

Regarding Vivo's financial results, service revenues grew 5% year-over-year in 9M05 in local currency, in line with the growth registered in 1H05.

The slowdown in total revenue growth (+4% year-over-year in 9M05 in local currency) was due to the decrease in handset sales in 3Q05 (-5% vs. 3Q04).

Growth in data revenues continued, to represent 6% of service revenues in 9M05.

The decrease in commercial activity in the quarter, together with lower acquisition costs as a result of higher entry barriers after the Father's Day campaign in August, have led to a quarter-over-quarter growth in OIBDA margin after management fees of 28.9% in 3Q05 (28.5% in 9M05).

The year-over-year trend in margins despite the slowdown in net adds is due to higher commercial and customer care costs caused by stiffer competition and Vivo's focus on high-value customers.

NORTHERN REGION

MEXICO

The third quarter of 2005 was marked by lower seasonal commercial activity in the Mexican market. This factor, combined with higher entry barriers at Telefonica Moviles Mexico and the lack of strong commercial campaigns by the operator, have resulted in a slowdown in the pace of growth of net adds compared to 2Q05.

On the other hand, improvements in credit scoring systems for contract customers have led to a reduction in churn rates in this segment compared to previous quarters, resulting in positive net adds in the contract segment for the first time this year.

Net adds in 3Q05 stood over 129 thousand compared to 86 thousand in 2Q05 (excluding the adjustment of 300,000 inactive lines which were eliminated from the customer base in 2Q05) , bringing Telefonica Moviles Mexico's total customer base at the end of September to 5.98 million an increase of 33% vs. 3Q04.GSM customers represent 84% of the total customer base.

In terms of customer usage, MOU in 3Q05 stood at 47 minutes while ARPU was 124 Mexican pesos.

As for financial results, we would highlight the positive evolution in service reveneus, driven by the increase in billable traffic in the quarter. However, the reduction in interconnection fees implemented in 2Q05 continue to impact the evolution of service revenues in local currency in 9M05 (+13.6% vs. 9M04).

Despite the slowdown in gross adds, higher entry barriers pushed up handset sales, which grew 40% in 3Q05 in local currency compared to 2Q05.

As a result, 2005 revenues stood at EUR 563 million in 9M05, representing year-over-year growth of 21.4% in local currency.

The increase in quarterly revenues, combined with lower commercial activity in 3Q05, have reduced OIBDA losses in 3Q05 to EUR 33.6 million (vs. EUR 48 million in 2Q05), and to EUR 130 million in 9M05.

By the end of September Telefonica Moviles Mexico had deployed 4,300 GSM base stations in the country, allowing the company to extend the coverage to areas which represent close to 90% of the urban population.

ANDEAN REGION 

VENEZUELA

Telefonica Moviles Venezuela's customer base ended September at over 5.3 million, with net adds of 122 thousand in 3Q05 and 993 thousand in 9M05.

The strong growth in the customer base boosted the operator's solid financial results in local currency. We would highlight the positive performance of service revenues (+12.6% vs. 2Q05) driven by the larger customer base, higher traffic and the sharp increase in data revenues.

The quarter-over-quarter decrease in total revenues in local currency (-1.7% vs. 2Q05) is due to lower handset revenues (-43.1% frente al 2Q05), following the commercial activity of the previous quarter, when the launch of the new brand and Mother's Day campaigns took place.

The operator recorded total revenues of EUR 993 million in 9M05, while OIBDA stood at EUR 408 million.

Lower commercial activity in the quarter led to an increase in the OIBDA margin, which stood at 42.8% in 3Q05, bringing the overall margin for 9M05 to a solid 41%.

The company has redoubled its efforts in the area of customer care. This has been reflected in a significant improvement in the indices of service quality.

COLOMBIA

Telefonica Moviles Colombia's major milestone during 3Q05 was the commercial launch of its GSM service at the end of July.

As a result, the Company's commercial efforts in 3Q05 began to focus on capturing GSM customers, with less commercial activity in CDMA.

Thus, at the end of September, Telefonica Moviles Colombia's customer base stood at 5.17 million, with net adds of 414 thousand in 3Q05, despite the limited growth in GSM customer acquisition due to the ongoing deployment of the network. Focus on GSM customer acquisition is reflected on the weight of GSM gross adds over total gross adds in 3Q05, which stood at 61%, meaning GSM customers already represent 11% of the total customer base.

Regarding financial results, accumulated revenues totalled EUR 536 million in 9M05. The decline in revenues in 3Q05 vs. 2Q05 in local currency is due to lower handset sales as a result of lower commercial activity.

On the other had, we would highlight the significant recovery in the OIBDA margin, due to lower commercial costs, to 23% in 3Q05. The OIBDA margin in 9M05 stood at 11.2%.

Finally, capex through September was EUR 166 million, reflecting the ongoing rollout of the GSM network, with coverage of 66% of the population as of September.

PERU

At the end of September 2005 Telefonica Moviles Peru's customer base stood at 3.2 million, boosted by the positive performance of net adds, with 141 thousand during 3Q05, 61.7% more than in 2Q05.

Regarding financial results, we would highlight the growth in revenues during 3Q05 in local currency (+1.1% in 3T05 vs. 2Q05), driven by the favourable advance in customers and traffic, which offset the impact of the reduction in interconnection rates in the quarter.

In addition, revenue growth was accompanied by the stability of the OIBDA margin at around 32% in 3Q05.

SOUTHERN CONE REGION

ARGENTINA

The strong advance in the Argentine cellular market continues to be one of the main growth drivers of the Group's customer base in 3Q05. Telefonica Moviles recorded net adds of 664 thousand in 3Q05 (+15% over 2Q05), boosted by the successful Father's Day campaign and the operator's efforts to contain churn.

The total customer base at the end of September was almost 7.4 million (+10% vs. June), with GSM customers representing 41% of the total.

Regarding financial results, we would highlight the acceleration in the pace of growth in service revenues in local currency (+12.9% in 3Q05 vs. 2Q05 and compared to +5.4% in 2Q05 vs. 1Q05), driven by growth in ARPU and in the customer base.

Of particular note is the performance of data revenues, which rose 36% vs. 2Q05 to represent 15% of service revenues.

Despite higher activity and ongoing competitive pressure, commercial costs remained under control as a result of higher entry barriers and lower integration costs. This enabled operating margins to improve to 21.7% in 3Q05 (+10.9 p.p. vs. 2Q05). The OIBDA margin in 9M05 stood at 15.2% (16.4% excluding integration costs).

Finally, capex through September was EUR 86 million, driven by the ongoing rollout of the GSM network.

CHILE

Telefonica Moviles Chile ended September with over 5.2 million customers.

In a quarter where commercial activity has slowed down after the positive performance in 2Q05 (boosted by the launch of the new brand campaigns), the customer base decreased by 27 thousand customers. However, contract net adds continue showing an increasing trend, growing 37.3% vs. 2Q05, to 29 thousand.

In addition, the number of GSM customers continued to increase, representing almost 43% of the total customer base at the end of September.

With regard to financial results, revenues totalled EUR 172 million in 3Q05 (EUR 459 million in 9M05), while lower commercial and integration costs in 3Q05 led to a 7 p.p. increase in the OIBDA margin vs. 2Q05. The OIBDA margin stood at 38.8% and 32.5% in 3Q05 and 9M05, respectively.

Capex through September stood at EUR 95 million, boosted by the deployment of the GSM network.

This document contains and the oral presentation of it may contain, statements that constitute forward looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), intentions, projections, expectations or forecasts made by the company on the date of said document. These may refer to different aspects of the company's business, such as its client base and development; the growth of the company or of its different lines of business, market share, financial results and other aspects of the activity and situation of the Company. Such intentions, expectations, projections or forecasts are by their very nature subject to risks and uncertainties which may cause them to change. Telefonica Moviles undertakes no obligation to release publicly the results of any revisions to these forward looking statements should unforseen events occur, or even if the alteration is the result of a change in strategy.

A complete version of this press release, including related tables, is available on the company's website, at www.telefonicamoviles.com