After a Year of Close Collaboration with Alcatel-Lucent and with the Support of Samsung, Telefonica Unveils Smart 4G Experience at Mobile World Congress


-- Telefonica's smarter 4G delivers increased capacity in high data-traffic density areas and greater bandwidth than current LTE networks, as well as superior indoor coverage

-- Small-cell technology speeds up network deployment, reduces costs and makes more efficient use of spectrum use and costs

-- First LTE deployment of its kind at 2.6Ghz band frequency and the first time that real users will be able to experience the benefits of the 4G technology of the future

BARCELONA, -- Telefonica today announced the first live experience of the world's "smartest" 4G network, in the most ambitious technological innovation ever deployed at the Mobile World Congress (MWC) (1). The network - the world´s first of its kind in the 2.6Ghz frequency band - provides download speeds of 100 Mbps, between 40-60Mbps on upload, vastly improved indoor coverage and can increase capacity by up to 400% in high density data-traffic areas.

Based on Alcatel-Lucent's lightRadio(TM) technology, Telefonica's network is a revolutionary first step toward a real "HetNet" network, which greatly improves mobile coverage by bringing small-cell base stations closer to the customer. In this deployment conventional radio base stations co-exist with 4G metro cells (small base stations incorporating antennas and radio) working on the same frequency and with no interference. As a strong supporter for Telefonica's LTE service initiative, Samsung is also presenting the first LTE smart mobile devices for band 7 (2.6Mhz), GALAXY S II LTE smartphone and GALAXY Tab 8.9 LTE tablet, which can be used on this new high-capacity network.

The most significant feature of Telefonica's LTE network is its increased capacity - with each cell comfortably supporting 30 people browsing simultaneously with average speed of 30Mbps. Tests conducted on this network show that a 400% increase in capacity can be made available to users compared to a conventional network design, and that significantly higher capacity gains could be delivered with denser metro-network design. The network supports speeds of up to 10 times those offered by the 3G network, with download speeds of 100Mbps, upload speeds of 40-60 Mbps and with latency times of around 20-25 milliseconds.

"Today the future of mobile networks begins," said Enrique Blanco, Telefonica's Chief Technology Officer. "The deployment of LTE that Telefonica has brought to the MWC, together with Alcatel-Lucent, gives us a glimpse of a tomorrow where everyone and everything is seamlessly connected, and in superfast time. But the challenge ahead is to ensure that all the technologies currently being deployed - 2G, 3G, LTE, WiFi and Fiber - can co-exist to deliver next generation communications. Telefonica's strategy is to develop intelligent networks that allow these different technologies to co-exist efficiently and cover customers' growing connectivity needs in markets that are at different stages of development."

Another key benefit of the advanced feature network is that it utilizes the same frequency for several network layers, allowing for far more efficient use of spectrum. This solution would also reduce network deployment costs by as much as 40%, as the installation of small-cells significantly reduces the amount of construction, installation and configuration work needed. Additionally, small-cells use less powerful amplification equipment, resulting in energy savings of up to 35% and a guaranteed reduction in environmental impact.

Wim Sweldens, President of Alcatel-Lucent's Wireless Division said: "This close collaboration with Telefonica through our co-creation program is a clear articulation of the future of mobile broadband - rather than merely evolving their current architecture, which was designed for voice and messaging, Telefonica is making fast progress toward building a mobile broadband network designed with the future in mind. The wireless network of the future needs to be lighter, greener and closer to customers and deliver much higher capacity - that is what lightRadio is all about."

"Samsung has been actively collaborating with Telefonica for LTE trial services with a variety of device line-up from LTE dongles to MiFi and LTE smartphones across European markets. I am excited to join Telefonica's breakthrough LTE demonstration with our representative LTE models, GALAXY S II LTE and GALAXY Tab 8.9 LTE," said DJ Lee, Executive Vice President and Head of Sales and Marketing team for Samsung Mobile. "We are fully committed to supporting Telefonica's LTE roll-out and hopefully will try to expand our LTE partnerships not only for European markets but also including Latin American markets. Our ambition is to become a number one LTE partner for Telefonica."

Visitors to MWC will be able to experience first-hand the wide range of options generated by this innovative network at the Telefonica stand (Hall 8), where the smallest metro cells in the market and the latest LTE devices from Samsung are being exhibited. A video wall will demonstrate the capabilities of the network by projecting video filmed live at the congress and delivered via LTE. The Samsung LTE devices will be used for high-definition videoconferences. This will demonstrate for both applications the improvements in speeds of both links for uploads and downloads. There will be real-time gaming demonstrations as well as augmented reality and hypermedia applications that highlight the latency and versatility of the network.

About Telefonica

Telefonica is one of the largest telecommunications companies in the world in terms of market capitalisation and number of customers. From this outstanding position in the industry, and with its mobile, fixed and broadband businesses as the key drivers of its growth, Telefonica has focused its strategy on becoming a leading company in the digital world.

The company has a significant presence in 25 countries and a customer base that amounts more than 300 million accesses around the world. Telefonica has a strong presence in Spain, Europe and Latin America, where the company focuses an important part of its growth strategy.

Telefonica is a 100% listed company, with more than 1.5 million direct shareholders. Its share capital currently comprises 4.563.996.485 ordinary shares traded on the Spanish Stock Market (Madrid, Barcelona, Bilbao and Valencia) and on those in London, New York, Lima, and Buenos Aires.

About Alcatel-Lucent (Euronext Paris and NYSE: ALU)

The long-trusted partner of service providers, enterprises and governments around the world, Alcatel-Lucent is a leading innovator in the field of networking and communications technology, products and services. The company is home to Bell Labs, one of the world's foremost R&D organizations, responsible for breakthroughs that have shaped the networking and communications industry. Alcatel-Lucent is committed to making communications more sustainable, more affordable and more accessible as we pursue our mission - Realizing the Potential of a Connected World.

With operations in more than 130 countries and one of the most experienced global services organizations in the industry, Alcatel-Lucent is a local partner with global reach. The Company achieved revenues of Euro 15.3 billion in 2011 and is incorporated in France and headquartered in Paris.

For more information, visit Alcatel-Lucent on: www.alcatel-lucent.com, read the latest posts on the Alcatel-Lucent blog www.alcatel-lucent.com/blog and follow the Company on Twitter: http://twitter.com/Alcatel_Lucent.

About Samsung Electronics Co., Ltd.

Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2011 consolidated sales of US$143.1 billion. Employing approximately 222,000 people in 205 offices across 71 countries, the company operates two separate organizations to coordinate its nine independent business units: Digital Media & Communications, comprising Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, and Digital Imaging; and Device Solutions, consisting of Memory, System LSI and LCD.

Recognized for its industry-leading performance across a range of economic, environmental and social criteria, Samsung Electronics was named the world's most sustainable technology company in the 2011 Dow Jones Sustainability Index. For more information, please visit www.samsung.com

(1)Telefonica has not only covered the Fira grounds but also other Barcelona hotspots includingthe Camp Nou football stadium, the Diagonal 00 tower, and the Ayre and Arts hotels.

Electronic Iberia, Jose Luis Arranz, Corporate Communication Manager, +34 91 714 36 00, jl.arranzamsung.com; or Alcatel-Lucent, Press Contact, Simon Poulter, +33 (0)1 40 76 50 84, simon.poulter@alcatel-lucent.com SOURCE Alcatel-Lucent

Alcatel-Lucent

CONTACT: Telefonica S.A, Press Office, +34 91 482 38 00, prensa@telefonica.es, www.telefonica.com/saladeprensa; or Samsung

Web Site: http://www.telefonica.com/saladeprensa

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