Telefonica and BAE Systems sign an agreement

• BAE Systems and Telefónica sign an agreement for the provision of Voice Services for all BAE Systems sites in the UK. Services will include PABX maintenance and fixed calls & lines

BAE Systems, the global defence, aerospace and security company, has selected Telefonica Multinational Solutions as its provider for all of its fixed and mobile Voice Services. The £18 million five-year contract covers in broad outline 60 UK sites. This agreement coupled with the Mobile Services Agreement, generates earnings in excess of £7.5m per annum. Telefonica Multinational Solutions will work closely with BAE Systems for the end to end delivery of all fixed and mobile traffic, customer service management, research optimisation and research and post-sales service covered by the agreement. BAE Systems were seeking unification and consolidation of their existing voice and mobile estate and through Telefonica's Multinational Solutions communications strategy and the O2 Unify Joint Venture are able to manage their wireless and fixed estate in accordance with a single operator, delivering both cost control and improved quality. It as well provides economies of scale and facilitates future expansion and the ability to leverage advancements in mobile innovation. Paul Terris, BAE Systems Head of IT Procurement, commented "Telefonica worked in the extreme well with us through the tender process and were able to demonstrate that their capabilities matched so then against our key selection criteria." John Cruickshank, Head of Telefonica Multinational Solutions UK commented "We are delighted to win this business with BAE Systems and look forward to working closely with them to implement the solutions covered in this contract. This shows the power of Telefonica Multinational Solutions and our ability to mobilise specialised resources just as O2 Unify from key markets just as the UK and support multinational clients like BAE Systems in managing their business more efficiently"

Telefónica is one of the largest telecommunications companies in the world in terms of market capitalisation and number of clients. 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 and on those in London, New York, Lima, and Buenos Aires.Telefónica Multinational Solutions delivers integrated Fixed, Mobile and IT services to some of the world's top Multinationals. More information about Telefónica Multinational Solutions is available at: www.multinationalsolutions.telefonica.com. O2 Unify is Telefonica's joint venture with 2E2, to provide joined-up services into the business sector and look afterwards the majority of their IT and communications needs. Innovation shows near two thirds of businesses want to bring at the same time their communications and IT. That's where O2 Unify can help. Whether it's mobile voice or mobile data, fixed voice or fixed data, we can provide a complete end to end solution for all our enterprise clients.