<SEC-DOCUMENT>0000950103-19-010733.txt : 20200302
<SEC-HEADER>0000950103-19-010733.hdr.sgml : 20200302
<ACCEPTANCE-DATETIME>20190812125456
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950103-19-010733
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20190812

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TELEFONICA S A
		CENTRAL INDEX KEY:			0000814052
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			U3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		GRAN VIA 28
		CITY:			28013 MADRID
		STATE:			U3
		ZIP:			00000
		BUSINESS PHONE:		00 34 91 584 0640

	MAIL ADDRESS:	
		STREET 1:		GRAN VIA 28
		CITY:			28013 MADRID
		STATE:			U3
		ZIP:			00000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATIONAL TELEPHONE COMPANY OF SPAIN
		DATE OF NAME CHANGE:	19880708
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<P STYLE="margin: 0; text-align: right">cl</P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: right; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">August
12, 2019</FONT></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">United States Securities and Exchange
Commission</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">Division of Corporation Finance</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">Office of Telecommunications<BR>
100 F Street, N.E.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">Washington, D.C. 20549-0405<BR>
<BR></FONT></P>

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    <TD STYLE="width: 8%; font-size: 11pt"><FONT STYLE="font-size: 10pt">Re:</FONT></TD>
    <TD STYLE="width: 92%"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"><B><BR>
        Telef&oacute;nica, S.A. </B></FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"><B>Form 20-F for the Fiscal
        Year Ended December 31, 2018</B></FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt"><B>Filed February 21, 2019</B></FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-size: 10pt"><B>File No. 001-09531</B></FONT></P></TD></TR>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Dear members of the Office of
Telecommunications:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Thank you for your letter dated
July 30, 2019 setting forth comments of the staff of the Division of Corporation Finance (the &ldquo;<B>Staff</B>&rdquo;) of the
United States Securities and Exchange Commission (the &ldquo;<B>Commission</B>&rdquo;) on the annual report on Form 20-F for the
year ended December 31, 2018 (the &ldquo;<B>2018 Form 20-F</B>&rdquo;) of Telef&oacute;nica, S.A. (the &ldquo;<B>Company</B>&rdquo;
or &ldquo;<B>we</B>&rdquo;), which we filed with the Commission on February 21, 2019.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">We appreciate your understanding
in affording us the time necessary to prepare our response, which we set forth in Annex A hereto. To facilitate the Staff&rsquo;s
review, we have reproduced the captions from the Staff&rsquo;s comment letter in boldface text.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">We would like to express our
appreciation for your cooperation in these matters, and we are available to discuss our response with you at your convenience.
In that connection, please do not hesitate to contact the undersigned in Madrid at 011-34-91-482-3569 or fax: 011-34-91-727-1204;
or our counsel, Michael J. Willisch of Davis Polk &amp; Wardwell LLP, at 011-34-91-768-9610 or fax: 011-34-91-768-9710.</FONT></P>

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    <TD STYLE="border-bottom: Black 1pt solid; font-size: 12pt; width: 35%"><FONT STYLE="font-size: 10pt">Very truly yours,<BR>
    <BR>
    /s/ Laura Abasolo Garc&iacute;a de Baquedano</FONT></TD></TR>
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    <TD STYLE="font-size: 12pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Laura Abasolo Garc&iacute;a
        de Baquedano</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Chief Finance and Control
        Officer</FONT></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Telef&oacute;nica, S.A.</FONT></P></TD></TR>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 10pt"><B><U>ANNEX
A</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Form
20-F for the Year Ended December 31, 2018</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>2018/
2017 Consolidated Results, page 42</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt"><B>1.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Refer to your <U>Consolidated
                                         Results</U> hereunder, <U>2018 Highlights</U> on page 39, and <U>Trend Information</U>
                                         on page 125. Your presentation and discussion of the Consolidated Results, OIBDA Margin,
                                         OIBDA, OIBDA-CapEx, and OIBDA-Capex excluding spectrum acquisitions (page 126) are not
                                         consistent with the guidance in Q&amp;A 102.10 of the CD&amp;I on Non-GAAP Financial
                                         Measures (April 4, 2018). Please revise in future filings.</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company respectfully advises
the Staff that the Company has considered the guidance in Q&amp;A 102.10 of the C&amp;DI on Non-GAAP Financial Measures (April
4, 2018), and the Company respectfully submits to the Staff that, in future filings, it will improve its presentation of non-GAAP
financial measures through the following changes compared with the 2018 Form 20-F:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">throughout
                                         the Consolidated Results section, the Company will move the discussion and analysis of
                                         &ldquo;Operating Income&rdquo; to appear before the discussion and analysis of any related
                                         non-GAAP measure;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">throughout
                                         the Consolidated Results section, the Company will increase the level of detail of the
                                         discussion and analysis of &ldquo;Operating Income&rdquo; to be at least as detailed
                                         as the discussion and analysis of any related non-GAAP measure;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">in
                                         the Highlights section, the Company will add discussion and analysis of &ldquo;Operating
                                         Income&rdquo;, with such discussion and analysis being at least as detailed as the discussion
                                         and analysis of &ldquo;OIBDA&rdquo; and &ldquo;OIBDA margin&rdquo; in the Highlights
                                         section, and with such discussion and analysis appearing before the discussion and analysis
                                         of any related non-GAAP measure;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">in
                                         the Trend Information section, the Company will include a comparable GAAP measure before
                                         any related non-GAAP measure;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">in
                                         the relevant paragraph of the Trend Information section, the Company will discuss &ldquo;Profit
                                         for the Year&rdquo; before any related non-GAAP measure; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 22.5pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD><FONT STYLE="font-size: 10pt">generally,
                                         the Company will remove bold style from non-GAAP measures where such bold style emphasizes
                                         a non-GAAP measure over its comparable GAAP measure.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company acknowledges that
&ldquo;OIBDA&rdquo; (operating income before depreciation and amortization) is a non-GAAP measure but considers it useful to investors
because it is used to track the performance of its business and to establish operating and strategic targets for the segments
of the Company&rsquo;s group.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt"><B>2.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>We also note your reference
                                         to Operating Cash Flow or OpCF, a term which you use interchangeably with OIBDA - CapEx.
                                         Please note that &ldquo;Operating Cash flow&rdquo; is the same as, or confusingly similar
                                         to, &ldquo;Net cash flow provided by operating activities,&rdquo; which is a GAAP financial
                                         measure. Please remove the reference in future filings. Refer to Item 10(e)(ii)(E) of
                                         Regulation S-K.<BR>
                                         <BR>
                                         Additionally, it appears to us that OIBDA-CapEx is intended as a liquidity measure. If
                                         so, please reconcile it to &ldquo;Net cash flow provided by operating activities,&rdquo;
                                         which is its most comparable GAAP measure. Include it, along with OIBDA - CapEx excluding
                                         spectrum acquisitions, among the non-GAAP measures reported on page 108.</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><BR>
The Company respectfully acknowledges the Staff&rsquo;s comment and advises the Staff that, in future filings, the Company will
eliminate references to &ldquo;Operating Cash Flow&rdquo; and &ldquo;OpCF&rdquo; and, when appropriate, it will replace them with
&ldquo;OIBDA-CapEx&rdquo;. Additionally, the Company respectfully submits that it will include &ldquo;OIBDA-CapEx&rdquo; and &ldquo;OIBDA-CapEx
excluding spectrum acquisitions&rdquo; among the non-GAAP measures reported in Item 5.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company respectfully submits
that its primary liquidity measure is &ldquo;Free Cash Flow&rdquo;, which was explained and reconciled to &ldquo;Net cash flow
provided by operating activities&rdquo; on pages 110-111 of the 2018 Form 20-F. The Company uses &ldquo;OIBDA-CapEx&rdquo; as
a measure principally derived from &ldquo;OIBDA&rdquo;, and considers it to be primarily a performance measure (measuring operating
income, before depreciation and amortization, and reduced by accrued capital expenditures) that also includes certain items related
to liquidity. &ldquo;OIBDA-CapEx&rdquo; is less useful as a liquidity measure than &ldquo;Free Cash Flow&rdquo; given that, unlike
&ldquo;Free Cash Flow&rdquo;, &ldquo;OIBDA-CapEx&rdquo; does not include changes in working capital, payments of interest, taxes
or dividends to non-controlling shareholders.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">As a result, the Company expects
that, in future filings, it will not include a reconciliation of &ldquo;OIBDA-CapEx&rdquo; to &ldquo;Net cash flow by operating
activities&rdquo; and instead will include reconciliations of both &ldquo;OIBDA-CapEx&rdquo; and &ldquo;OIBDA-CapEx excluding
spectrum acquisitions&rdquo; to &ldquo;Operating Income&rdquo;.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B><U>Item 8. Financial Information
</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B><U>Legal Proceedings, page
139</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt"><B>3.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Tell us how you considered
                                         disclosure of Perseverance&rsquo; legal and compensatory claims against Telefonica Vivo,
                                         the Company&rsquo;s counterclaims and recent case developments pursuant to the requirements
                                         for Item 8.A.7 of the Form 20-F.</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company respectfully advises
the Staff that the Company has considered the disclosure requirements under Item 8.A.7 of Form 20-F and advises the Staff as follows:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The litigation at issue relates
to the former commercial relationship of the Company&rsquo;s subsidiary Telef&ocirc;nica Brasil S.A. (&ldquo;<B>Telef&ocirc;nica
Brasil</B>&rdquo;) with Perseverance Ltda. (&ldquo;<B>Perseverance</B>&rdquo;), once one of its third-party distributors in Brazil,
which declared bankruptcy in early 2003. In early 2006, Perseverance&rsquo;s bankrupt estate, represented by its administrator,
filed a lawsuit in Brazil (such lawsuit and related proceedings, the &ldquo;<B>Perseverance Litigation</B>&rdquo;) against Telef&ocirc;nica
Brasil asserting a breach of contract cause of action and seeking compensation for damages relating to (i) pecuniary loss and
loss of future earnings and (ii) pain and suffering (<I>danos morais</I>), in each case resulting from the alleged breach of Telef&ocirc;nica
Brasil&rsquo;s distribution agreement with Perseverance. On June 16, 2011, the Brazilian trial court issued a final judgment granting,
in part, Perseverance&rsquo;s claim, and establishing the amount of damages (based on equitable considerations) at R$200 thousand
for Perseverance&rsquo;s pecuniary loss and loss of future earnings and R$200 thousand for its pain and suffering.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Telef&ocirc;nica Brasil and Perseverance&rsquo;s
co-plaintiff (Perseverance&rsquo;s owner, Mr. Ricardo Hallak) each appealed the trial court&rsquo;s ruling. On May 23, 2012, the
State Court of Appeals of S&atilde;o Paulo overturned the judgment in part, ruling that the amount of damages relating to pecuniary
loss and loss of future earnings was to be calculated through &ldquo;judgment liquidation&rdquo; proceedings (<I>liquida&ccedil;&atilde;o
de senten&ccedil;a</I>) and established based on &ldquo;an analysis of the accounting books and balance sheet of the plaintiff
filed in the bankruptcy proceedings,&rdquo; remanding such proceedings to the trial court. It upheld the trial court&rsquo;s judgment
that established the amount of pain and suffering damages at R$200 thousand, which amount accordingly is no longer under dispute.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Following commencement of the
judgment liquidation proceedings, the trial court commissioned an expert report setting forth the calculation of amounts due as
damages for pecuniary loss and loss of future earnings under the judgment, which was filed on November 28, 2017, with a complementary
report being filed on March 9, 2018. Notably, Perseverance alleged that its accounting books had been lost, therefore the expert&rsquo;s
calculations were based on suppositions and other imprecise estimates and considerations, in addition to using a method that was
not consistent with standard accounting practices. The expert&rsquo;s report concluded that damages for pecuniary loss and loss
of future earnings due under the judgment amounted to R$47 billion.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">On April 25, 2018, Telef&ocirc;nica
Brasil responded vehemently challenging the expert&rsquo;s findings, and filed a report drafted by its own expert advisor in the
proceedings detailing a litany of errors and technical inconsistencies. Telef&ocirc;nica Brasil, relying on the provisions of
the Brazilian Civil Procedure Code, requested that a new expert analysis be carried out in light of the significant flaws present
in the court expert&rsquo;s report. Telef&ocirc;nica Brasil then filed an expert opinion with the trial court by Professor Gesner
de Oliveira, who has been a Professor at the Funda&ccedil;&atilde;o Get&uacute;lio Vargas-SP since 1990, is a former president
of the Brazilian Anti-Trust Authority (CADE), and is the holder of a Ph.D in Economics from UC Berkeley. Professor Oliveira set
out his criticisms of the technical and economic considerations relied upon by the court expert. He concluded that, in accordance
with the criteria set forth in the final</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">judgment, the damages due for
pecuniary loss and loss of future earnings would amount to R$439 thousand, which adjusted for inflation in accordance with Brazilian
law (but not including default interest) up to the date of his report (February 22, 2019) would amount to a total of R$1.33 million
(approximately US$0.4 million at the Brazilian real/U.S. Dollar exchange rate on such date).</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The judgment liquidation proceedings
remain ongoing at present. To date, the trial court has not yet considered Telef&ocirc;nica Brasil&rsquo;s criticisms of the court
expert&rsquo;s report, nor its request for new expert analysis. The trial court&rsquo;s expert was summoned to present a rebuttal
to the report filed by Telef&ocirc;nica Brasil, but has neglected to respond to date. Accordingly, from a procedural perspective,
the appellate court&rsquo;s decision established a final and binding obligation on Telef&ocirc;nica Brasil to pay damages for
Perseverance&rsquo;s pecuniary loss and loss of future earnings. However, no judicial conclusion has been reached to date as to
the amount of such damages owed by Telef&ocirc;nica Brasil, and therefore no final and binding decision exists regarding the amount
due for such damages, given that the judgment liquidation phase remains under way at the trial court level. Telef&ocirc;nica Brasil
and Perseverance will still be able to appeal the trial court&rsquo;s decision once rendered, but only as to the amount of pecuniary
loss and loss of future earnings damages it awards (the obligation to pay remains final and unappealable).</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company and Telef&ocirc;nica
Brasil continue to believe that, after a thorough examination of the facts and circumstances relating to the Perseverance Litigation,
and as further analyzed and discussed with external and in-house legal counsel, the trial court will not accept the 2017 expert&rsquo;s
report initially estimating damages for pecuniary loss and loss of future earnings amounting to R$47 billion, a sum the Company
and Telef&ocirc;nica Brasil believe to be excessive and unwarranted. To the contrary, the Company and Telef&ocirc;nica Brasil
believe the judgment liquidation proceedings will establish a significantly lower and more reasonable amount of such damages,
as noted below.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">In accordance with applicable
accounting rules, Telef&ocirc;nica Brasil established a provision relating to damages for pain and suffering under the Perseverance
Litigation that amounted to R$427.9 thousand as of December 31, 2018, which amount reflects the final judgment of R$200 thousand
for such damages, adjusted for inflation and default interest as of such date.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Upon the issuance of Professor
Oliveira&rsquo;s opinion in early 2019, Telef&ocirc;nica Brasil revised this provision to contemplate expected losses relating
to damages for pecuniary loss and loss of future earnings.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Accordingly, the total provision
recorded by Telef&ocirc;nica Brasil for the Perseverance Litigation claim as of June 30, 2019 (including damages for pain and
suffering as well as damages for pecuniary loss and loss of future earnings, in each case adjusted for inflation and default interest)
amounted to R$4.5 million (approximately &euro;1.0 million or US$1.2 million at the Brazilian real/euro and Brazilian real/U.S.
Dollar exchange</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">rates on such date).<SUP>1</SUP>
This provision is reflected in the Company&rsquo;s consolidated financial statements.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">On the basis of the foregoing
considerations, the Company does not believe that the Perseverance Litigation has had, nor will have, &ldquo;a significant effect
on the Company&rsquo;s financial position or profitability&rdquo; (as required by Item 8.A.7 of Form 20-F). Accordingly, considering
the expected outflow of cash related to this claim, no particular disclosure was deemed as necessary. For that reason, and as
permitted by paragraph 87 of IAS 37, Telef&ocirc;nica Brasil&rsquo;s existing provision relating to the Perseverance Litigation
in the amount of R$427.9 thousand as of December 31, 2018, is aggregated in the consolidated provision established for a group
of Telef&ocirc;nica Brasil&rsquo;s 1,099 civil proceedings of a non-consumer nature with a probable risk of loss, as a function
of their immaterial values taken individually. As of December 31, 2018, this aggregated provision as reflected on Telef&ocirc;nica
Brasil&rsquo;s consolidated balance sheet totaled R$316.1 million. As of December 31, 2018, this provision was included by the
Company in an aggregated provision for civil proceedings, including consumer proceedings, at Telef&ocirc;nica Brasil totaling
&euro;226 million (which amount is disclosed on page F-97 the 2018 Form 20-F).</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B><U>Note 26. Other Information,
page F-116</U></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 36pt"><FONT STYLE="font-size: 10pt"><B>4.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>We
                                         note various newspaper articles referring to a Superior Court of Justice decision against
                                         Telefonica Vivo in favor of Perseverance. For example, see <FONT STYLE="color: Blue"><U>https://translate.google.com/translate?hl=en&amp;sl=pt&amp;u=https://www.reporterdiario.com.br/noticia/2587796/ex-revendedor-de-celular-leva-vivo-a-cvm/&amp;prev=search</U></FONT></B></FONT><B><FONT STYLE="font-size: 10pt">.
                                         These articles discuss a potential charge of up to R$47 billion. In regard to this case,
                                         tell us how you considered the guidance in paragraphs 14, 28, 86 and 91 of IAS 37.</FONT></B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 12pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The Company respectfully acknowledges
the Staff&rsquo;s comment and advises the Staff as follows with respect to its consideration of the guidance in the aforementioned
paragraphs of IAS 37:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><I><U>Paragraph 14</U></I></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Paragraph 14 of IAS 37 establishes
that &ldquo;a provision shall be recognized when: (a) an entity has a present obligation (legal or constructive) as a result of
a past event; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
and (c) a reliable estimate can be made of the amount of the obligation.&rdquo;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Based on the Company&rsquo;s
and Telef&ocirc;nica Brasil&rsquo;s analysis of the facts and circumstances relating to the Perseverance Litigation and discussion
with legal</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt; padding-bottom: 5pt">__________________<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-size: 10pt"><SUP>1</SUP>Telef&ocirc;nica
Brasil constitutes a provision for lawsuits in which the outcome is expected to be unfavorable (probable likelihood of loss),
based on the assessment of Telef&ocirc;nica Brasil&rsquo;s external counsel, in conjunction with the in-house team. As such, Telef&ocirc;nica
Brasil&rsquo;s management is responsible for deciding, in the exercise of its duty of diligence and in line with applicable standards
and based on reasoned technical assessment, whether or not provision should be made for the contingency, and if so, in what amount.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">counsel, the Company and Telef&ocirc;nica
Brasil assessed the Perseverance Litigation as having a probable chance of loss and concluded that the criteria set forth above
had been satisfied. Accordingly, the Company and Telef&ocirc;nica Brasil established a provision to cover expected losses arising
from the Perseverance Litigation, which for Telef&ocirc;nica Brasil amounted to R$427.9 thousand as of December 31, 2018. As mentioned
above, this provision was revised upon the issuance of Professor Oliveira&rsquo;s opinion to reflect expected losses relating
to the damages for pecuniary loss and loss of future earnings, for a total provision for the Perseverance Litigation claim amounting
to R$4.5 million on June 30, 2019.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><I><U>Paragraph 28 </U></I></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Paragraph 28 of IAS 37 establishes
that, &ldquo;A contingent liability is disclosed, as required by paragraph 86, unless the possibility of an outflow of resources
embodying economic benefits is remote.&rdquo;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">As mentioned above, the Perseverance
Litigation was assessed as having a probable chance of loss and met the conditions under paragraph 14 of IAS 37, which gave rise
to a provision, rather than a contingent liability. Paragraph 12 of IAS 37 explains the relationship between provisions and contingent
liabilities: &ldquo;within this Standard the term &lsquo;contingent&rsquo; is used for liabilities and assets that are not recognized
because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the entity. In addition, the term &lsquo;contingent liability&rsquo; is used for liabilities that
do not meet the recognition criteria.&rdquo; A provision is defined as &ldquo;a liability of uncertain timing or amount.&rdquo;
Where a provision has been recognized for a present obligation (because the conditions in paragraph 14 of IAS 37 have been met),
there is no longer a contingent liability (i.e. an unrecognized liability) in respect of that obligation. Accordingly, the Company
understands that there is no contingent liability in respect of the Perseverance Litigation, and therefore disclosure of a contingent
liability under paragraph 28 of IAS 37 is not applicable.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">As permitted by paragraph 87
of IAS 37, the relevant provision is presented in an aggregated form, established for a group of 1,099 civil lawsuits involving
Telef&ocirc;nica Brasil of a non-consumer nature classified as having a probable chance of loss as a function of their immaterial
values individually, totaling a consolidated provision of R$316.1 million<SUP>2 </SUP>as of December 31, 2018.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><I><U>Paragraph 86 </U></I></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Paragraph 86 of IAS 37 establishes
that, &ldquo;Unless the possibility of any outflow in settlement is remote, an entity shall disclose for each class of contingent
liability at the end of the reporting period a brief description of the nature of the contingent liability and, where practicable:
(a) an estimate of its financial effect, measured under paragraphs 36&ndash;52; (b) an indication of the uncertainties relating
to the amount or timing of any outflow; and (c) the possibility of any reimbursement.&rdquo;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt; padding-bottom: 5pt">__________________<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-size: 10pt"><SUP>2</SUP>Comprised of R$314.0
million reflected on the Telef&ocirc;nica Brasil&rsquo;s individual balance sheet and R$2.1 million reflected on the balance sheet
of Telef&ocirc;nica Brasil&rsquo;s subsidiary, Telef&ocirc;nica Transportes e Log&iacute;stica Ltda.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">We respectfully direct the Staff&rsquo;s
attention to the answers provided above regarding the Company&rsquo;s consideration of the guidance set forth in paragraphs 14
and 28 of IAS 37. Given the Company&rsquo;s understanding that there is no contingent liability in respect of the Perseverance
Litigation, the Company understands no disclosure is required by paragraph 86 of IAS 37.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><I><U>Paragraph 91 </U></I></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Paragraph 91 of IAS 37 establishes
that, &ldquo;Where any of the information required by paragraphs 86 and 89 is not disclosed because it is not practicable to do
so, that fact shall be stated&rdquo;.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">We respectfully note our understanding
that the guidance set forth in paragraph 91 of IAS 37 is not applicable because: (i) no information was required to be disclosed
in respect of the Perseverance Litigation under paragraph 86 of IAS 37 (as explained above) and accordingly there is no information
required by paragraph 86 of IAS 37 that was not disclosed; (ii) the Company understands that an inflow of economic benefits under
paragraph 89 of IAS 37 is not probable, and therefore there is no information required by paragraph 89 that was not disclosed;
and (iii) the Company does not believe that the Perseverance Litigation has had, nor will have, a significant effect on the Company&rsquo;s
financial position or profitability.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
