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Brazilian Vivo selects HUAWEI to build the largest GSM network in Latin America

[Sao Paulo, BRAZIL–21 August 2006] HUAWEI Technologies ("HUAWEI "), a leader in providing next generation telecommunications network solutions for operators around the world, today announced that it had been selected by the world-leading telecom operator Telefónica as the key provider for Vivo, the largest mobile telecommunications operator in the South Hemisphere, to construct a 3G-oriented GSM network. This signifies that the strategic collaboration between Telefónica and HUAWEI has been elevated to a new phase, and recognizes that HUAWEI's innovative wireless solutions are able to meet strict requests of any high-end markets.

The Telefónica VIVO GSM project entails constructing the largest GSM network for 2006 in Latin America. According to the contract, HUAWEI will construct GSM networks for the most economically developed states along the coastline in Brazil, including Rio de Janeiro, Espírito Santo, Paraná, Rio Grande do Sul and Santa Catarina, which cover world-famous tourist cities such as Rio de Janeiro. Thousands of HUAWEI's Base Transceiver Stations (BTS) will be deployed in the first phase of the contract.

The entire network constructed by HUAWEI will adopt its EnerG GSM solution featuring 2G/3G compatibility and new generation GSM stations, outfitted with equipment that is capable of smooth evolution to 3G. This way, HUAWEI helps the operator to maximize their value and profit by lowering long-term network construction costs and network life-cycle operational & maintenance expenditure.

"The VIVO GSM project is one of the largest mobile projects of Telefónica in recent years. For us, the compatibility with 3G services is very important to assure its future upgrade to WCDMA/UMTS in a cost-effective way. Telefónica is very happy to further develop its relationship with HUAWEI in Latin America," commented Mr. Cesar Alierta, Chairman of Telefónica.

"Thanks for Telefónica and Vivo's trust on HUAWEI, and we are delighted to have become Telefónica's key partner in wireless area and meanwhile," said Ms. Sun Yafang, Chairwoman of HUAWEI, "As the world's leading multinational telecom operator, Telefónica is very strict in selecting suppliers in terms of comprehensive ability. HUAWEI's leading solutions and quick-response and quality services will help VIVO to maintain its leading position in the market, and will bring its customers with more novel services and more abundant experiences."

As the world's fastest-growing mainstream operator, HUAWEI GSM solution has served 120 million subscribers. In the mean time, HUAWEI has won over 30 WCDMA/HSDPA commercial contracts worldwide. The cooperation with Telefónica and Vivo further consolidates HUAWEI's leading position in the Brazilian and Latin American markets.


About Telefónica

Telefonica is one of the largest telecommunications companies in the world in terms of market capitalization. Its activities are centered mainly on the fixed and mobile telephony businesses with broadband as the key tool for the development of both.

The company has a significant presence in 19 countries and a customer base that amounts more than 186 million accesses around the world, of which more than 130 million correspond to mobile customers.

Telefónica has a strong presence in Latin America, where the company focuses an important part of its growth strategy with more than 100 million customers at present.

In 2005 Telefonica became shareholder of Chinese operator China Netcom (CNC) after buying the 5% of the shares and it has at present a member in CNC's Board of Directors. For more information, please visit www.telefonica.com/


About VIVO

VIVO, a joint venture between Telefónica Móviles and Portugal Telecom, is the biggest mobile telecommunications operator in the South Hemisphere. The company is a leader in the retail market and also in the corporate segment, serving over 30 million customers in Brazil.

VIVO goal is to strengthen its leadership by following a sustainable growth and increased profitability strategy. The Company seeks to implement such strategy as from the selective growth of its customer base, the development of new services and taking advantage of growth opportunities. VIVO also benefits from the competitive advantage offered by its wide customer base, recognized brands and skilled executive team. For more information, please visit www.vivo.com.br