Telit Wireless Solutions and Telefonica Spain Announce Strategic Alliance.

Telit's Modules to be Embedded in Telefonica Spain's Smart M2M Platform

BARCELONA, Spain -- The M2M specialist Telit Wireless Solutions and the Spanish network operator Telefonica Spain today announced a groundbreaking strategic alliance to provide customers with a turnkey M2M solution based on Telit's innovative modules and Telefonica's 'Mundo Maquina' and Smart M2M Platform. As part of the alliance, Telefonica will embed Telit modules into its M2M projects, which will result in enhanced performance for Telefonica customers looking to deploy their M2M project on time and within budget.

Telefonica selected Telit's new UMTS/HSDPA module, announced at 3GSM. Both companies are currently working on the integration of Telit products into Telefonica's M2M Smart Platform, a dedicated server for users of M2M technology.

"Telefonica is Spain's leading network carrier and one of the world's largest telecom companies with a strong focus on the M2M market," explained Roger Dewey, President and CEO of Telit Americas. "Telefonica's constant commitment to generating new services and supporting systems integrators in developing innovative applications is of high importance for us. This perfectly matches Telit's strategy of offering its customers the latest M2M technology worldwide."

As a result of this partnership, users will benefit from the close cooperation of these two leading players in M2M, securing solutions that include Telit's M2M modules with corresponding support bundled with Telefonica's data transmission and services. Customers benefit from Telit's three core values: business scalability, ease of integration and investment protection.

"This is an important advantage for us. Through this close cooperation with Telit we can respond flexibly to our customers' requests," said Raquel Perez Serrano, Product Manager of M2M at Telefonica.

Both companies will benefit considerably from this strategic alliance. Telefonica will make its laboratories available to Telit for testing the new UMTS modules. At the same time the cooperation provides Telefonica with constant access to Telit's innovative M2M technology. The Spanish telecom expert will be able to gain access to the new UMTS/HSDPA module at an early stage, which allows fast development of cutting edge M2M applications addressing the needs of the customer.

"Considering the development of our position on the Spanish and international M2M market, this is an important step," said Dominikus Hierl, President of Telit Wireless Solutions.

"We cooperate closely with Telit, which is essential for offering our customers services at the best possible rate. Due to the fact that we do not produce M2M modules on our own, we have to rely on a solid partner. Telit is very dedicated to the M2M markets worldwide and knows the needs of the users very well," added Raquel Perez Serrano.

It is the new Telit UMTS module which is of highest strategic importance for Telefonica in order to open up new segments of the M2M market. According to the Spanish telecommunications expert, the most auspicious prospects for UMTS technology will be seen in the video surveillance and security fields. In the future, Telefonica is also planning to use UMTS modules for vending applications to implement advanced marketing strategies. Telefonica estimates that UMTS is a technology with promising prospects. UMTS applications will also be deployed in the fields of ATMs (Automatic Teller Machines) and mobile marketing. Telefonica also predicts that, in the long term, all applications currently based on GPRS technology will switch to UMTS.

About Telefonica

Telefonica is one of the world's leading telecom companies, and is present in Europe, Africa and Latin America. As of June 2006, Telefonica had a total of 195.9 million customers. Telefonica is an integrated carrier with one the largest market shares outside of its original market and is the leading carrier in the Spanish-Portuguese-speaking market. Thanks to this, it is on its way to becoming the leader among multi-service and multi-domestic providers. In Spain, the Group has more than 80 years experience, and as of September 2006 had almost 16 million land-line accesses, plus more than 4.6 million data and Internet accesses, together with more than 21 million mobile telephony customers. In Europe, Telefonica O2 is present in the U.K., Ireland, Germany, and the Czech Republic. As of September 2006, the Group had more than 34 million mobile accesses and close to 4 million land-line accesses in the region. Telefonica O2 has also been awarded one of the 3G mobile telephony licenses in Slovakia for a period of 20 years. The Group is fifth in the world in the Telecom sector in terms of market capitalization and sixth in the Eurostoxx 50 rankings (20 November, 2006) with a market capitalization of almost US$ 100 billion. The Group has more than 1.5 million direct shareholders and is listed on the main Spanish and foreign stock markets.

About Telit Communications

Telit is a leading global mobile communications technology company. Its Wireless Solutions division develops, manufactures and markets GSM/GPRS/UMTS and CDMA modules for machine-to-machine (m2m) applications which enable machines, devices or vehicles to communicate via mobile networks. Telit modules are marketed and deployed worldwide. The company is listed on the London Stock Exchange Alternative Investment Market (AIM) (code: TCM). For more information about the company, please visit www.telit.com.

Visit Telit at 3GSM 2007 in Barcelona in Hall 1, Booth 1E44