Press release

Telefónica today announced that Telefónica O2 Germany's CEO, Jaime Smith Basterra, will join the parent company as Director of Affiliates and Industrial Alliances. Smith will take on his new responsibilities in Madrid at the beginning of June and report directly to Cesar Alierta, Chairman of the Board and Chief Executive of Telefónica S.A. "I am glad to have Jaime in this new role because of his in depth knowledge of the telecommunications markets, his strategic background and his success in his European assignments as CEO of Czech Republic and Germany" says Alierta. Jaime will further develop operationally and strategically current relations with three partners - China Unicom, Telecom Italia and Portugal Telecom.

Jaime will be succeeded as CEO of Telefónica O2 Germany by Rene Schuster, who joins the company with extensive telecoms and IT experience, having held senior positions at leading international companies, including Vodafone, Compaq and Hewlett Packard.

Over the past two years, Jaime has fundamentally re-engineered the German operation following a strategy built upon customer experience through a number of successful initiatives, including:

• a major restructuring of the product portfolio and mobile business model launching the tariff O2 o,
• setting up an €3.5 billion network investment programme to ensure a 100% Telefónica O2 owned quality network by end of the year,
• Expanding significantly the company’s direct distribution channels and launching of the Fonic discount mobile brand,
• most recently, announcing the integration of Telefónica Deutschland and Telefónica O2 into a new business-to-business division building upon converged products
• and last but not least turning around the German business which has shown profitable growth in the last two quarters.

Prior to his German assignment, he successfully integrated the company's Czech fixed and mobile businesses under the name of Telefónica O2 Czech Republic and launched the mobile business in Slovakia. He will continue to have the role as Chairman of the supervisory board of Telefónica O2 Czech Republic.

Matthew Key, CEO of Telefónica Europe, said: "Jaime has done an outstanding job in Germany building the foundations for long term growth and profitability. He leaves the business strongly poised for the next stage of its positive development. I would like to thank him for his invaluable contribution and wish him every success in his new global role.

"As one of the world's leading telecommunications companies, Telefónica operates on a global/local model - so that we gain the benefits of our international scale and expertise, at the same time as ensuring that we remain close to local market conditions and sensitivities. I am therefore delighted to welcome Rene Schuster to the team. As a German/US national, Rene has a deep understanding of Europe's largest market and, with his considerable expertise and impressive track record across telecoms, technology and a range of other industries, he is the ideal person to build further on the solid foundations for growth that now exist with Telefónica O2 Germany. Under his management, I firmly believe that the business is well positioned to maintain its recent significant improvement in performance."

A highly experienced executive, Rene Schuster has operated at a senior level in a number of technology, telecommunications and service-oriented companies. In particular, he was global marketing director for Vodafone. Prior to this, he held the position of Senior VP & General Manager at Hewlett Packard, having previously been CEO (UK & Ireland) for Compaq, and Senior Partner (EMEA) at KPMG Management Consulting.  Rene Schuster will also sit on the Board of Directors of Telefónica Europe plc.

Images of Rene Schuster are available at: http://www.o2.com/downloads/schuster

About Telefónica

Telefónica is one of the world’s largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, while its broadband business is the key growth driver underpinning both.  It operates in 25 countries and has a global customer base of 260 million. Telefónica’s growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America.  Telefónica is a 100% private sector company with its shares listed in Madrid and other stock exchanges and more than 1.5 million individual shareholders.

Telefónica Europe plc contacts

David Nicholas
Director of Communications
Telefónica Europe plc
david.nicholas@o2.com
m +44 (0)7715 759 176

Simon Lloyd
Head of Media Relations
Telefónica Europe plc
simon.lloyd@o2.com
m +44 (0)7912 072 777

Telefónica Europe plc press office: t +44 (0)1753 628 402

All Telefónica Europe plc news release can be accessed at our website: www.o2.com

Back to press release list