Senior Management Appointments

TELEFÓNICA, S.A. as provided in article 82 of the Spanish Stock Market Act (Ley del Mercado de Valores), hereby reports the following

SIGNIFICANT EVENT

The Board of Directors of Telefónica, S.A., at its meeting held today, upon the prior favourable report of the Nomination, Compensation and Corporate Governance Board Committee, has adopted the resolutions listed below regarding the Board of Directors of the Company and the organizational structure of the Telefónica Group.

The Board of Directors has unanimously resolved to appoint Mr. José María Álvarez-Pallete López as Chief Operating Officer (C.O.O.), to replace Mr. Julio Linares López, who has resigned as Chief Operating Officer (C.O.O.), as member of the Executive Commission and of the Innovation Board Committee. Mr Linares has been appointed Third Vice-Chairman of the Board of Directors of the Company.

 The Board of Directors has recognised the remarkable dedication and effort of Mr. Julio Linares López during the course of these years.

 Likewise, the Board of Directors has unanimously resolved to appoint Mr. Santiago Fernández Valbuena as member of the Board of Directors (Executive Director), to replace Mr. David Arculus, who has resigned as Director, and, consequently, as member of the Regulatory and of the International Affairs Board Committees.

 The Board of Directors has expressly recognised the work performed by Mr. Arculus during his tenure.

 As regards the organizational structure, the Board of Directors has unanimously resolved to appoint Mrs. Eva Castillo Sanz, member of the Board of Directors of Telefónica, S.A., Chairwoman and CEO of Telefónica Europe, and consequently, member of the Executive Committee of the Company.

 Finally, it was agreed to appoint Mr. Eduardo Navarro Carvalho, Director of Strategy and Alliances, as member of the Executive Committee of the Company.

See attached the Executive Committee Chart.

Madrid, September 17th, 2012