Re Contract

Re Contract

PRESS RELEASE

TELEFÓNICA AND NAGRA LAUNCH NEXT GENERATION

PAY-TV SERVICES IN LATIN AMERICA

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  *Companies extend technology partnership beyond content protection to
    include next generation middleware and user experience solutions
  *OpenTV 5 will enable hybrid and over-the-top services through a consistent
    cross-device user experience to subscribers in Latin America
  *Telefónica Digital wants to enrich their Pay-TV services in Latin America
    by providing quadruple play users with advanced functionalities on top of
    connectivity

Cheseaux, Switzerland and Madrid, Spain- January 6th, 2014 - NAGRA, the
digital TV division of the Kudelski Group (SIX:KUD.S) and the world's leading
independent provider of content protection and multiscreen television
solutions, and Telefónica Digital, the global business division of Telefónica
S.A (NYSE: TEF), a tier one integrated operator in the telecommunications
sector, announced today the launch of next generation TV services powered by
NAGRA's latest middleware solution, OpenTV 5. OpenTV 5 will enable Telefónica
to deliver hybrid and over-the-top services through a unified user experience
to Telefónica's Latin American customers in Argentina, Brazil, Chile,
Colombia, Peru and Venezuela.

"Next generation middleware solutions such as NAGRA's Open TV 5 will allow
Telefónica to combine our strengths as a Pay-TV operator and a telco provider
to create more powerful end-user services," said David del Val, Media Services
Product Director at Telefónica Digital. "Adding broadband connectivity to our
satellite and cable services in the context of a quadruple play offering will
bring them to a new level of experience around content curation, flexilinear
TV and multiscreen capabilities. The flexible nature of OpenTV 5 lets us
create a unique value proposition based on our customer insights and long-term
product vision, covering the entry-level as well as the high-end segments of
our markets."

"Telefónica has consistently been at the forefront of innovation continually
expanding and enriching their subscriber offering to improve the experience of
their viewers," said Ivan Verbesselt, SVP Group Marketing for NAGRA. "Today,
we are thrilled to partner with Telefónica on this new launch by providing the
critical middleware component that is the foundation for the deployment of
next generation multiscreen services. OpenTV 5 is the solution of choice for
operators wanting to ensure a seamless end-user experience across multiple
devices, faster time-to-market of new services and applications, and stronger
monetization opportunities."

OpenTV 5 will be deployed by Telefónica across satellite, cable, terrestrial
and pure over-the-top networks supporting a range of broadcast, on-demand and
interactive services. As NAGRA's most advanced and most open middleware
solution, OpenTV 5 provides operators like Telefónica with the building blocks
to deploy feature-rich Pay-TV services, applications and user experiences. It
can scale from low-cost "zapper" boxes to advanced PVRs and gateways,
supporting any network type (cable, satellite, IPTV, terrestrial) including
hybrid networks.

The solution will be demonstrated at NAGRA booth located in the Venetian
Suites Toscana 3601-03 at the CES Show in Las Vegas from January 7-10, 2014.

About NAGRA

NAGRA, the digital TV division of the Kudelski Group (SIX:KUD.S), provides
security and multiscreen user experience solutions for the monetization of
digital media. The company offers content providers and DTV operators
worldwide with secure, open, integrated platforms and applications over
broadcast, broadband and mobile platforms, enabling compelling and
personalized viewing experiences. Please visit www.nagra.com/dtv for more
information and follow us on Twitter at @nagrakudelski.

About Telefónica

Telefónica 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, Telefónica has focused its strategy on
becoming a leading company in the digital world. The company has a significant
presence in 24 countries and a customer base that amounts more than 320
million accesses around the world. Telefónica has a strong presence in Spain,
Europe and Latin America, where the company focuses an important part of its
growth strategy. Telefónica is a 100% listed company, with more than 1.5
million direct shareholders. Its share capital currently comprises
4.551.024.586 ordinary shares traded on the Spanish Stock Market (Madrid,
Barcelona, Bilbao and Valencia) and on those in London, New York, Lima, and
Buenos Aires.

Contacts:

For NAGRA:

Ivan Schnider

Marketing Communications

+41 21 732 09 40

ivan.schnider@nagra.com

Christine Oury

Marketing Communications

+1 415 962 5433

christine.oury@nagra.com

For Telefónica:

Dirección Comunicación Corporativa

+34 91 482 38 00

prensa@telefonica.es

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