This summary is based on the second quarter fiscal 2007 earnings call conducted by Telefonos de Mexico SAB de CV (TMX: chart) on July 20, 2007.

Chief Executive Officer: Hector Slim

Chief Financial Officer: Adolfo Cerezo

Investors Relations Officer: Rui Echavarra

Key Investors Issues

- The net profit for the quarter was $744 million, up 16.4% from prior year.
- Quarterly revenue increased 1.9% over previous year to 46 billion pesos.
- Revenue from the operations in Brazil grew 3% to $1 billion.

Second Quarter Fiscal 2007 Financial Highlights

TELMEX’s second quarter revenues increased 2% to 46 billion pesos.

The company’s data business continues to be a key contributor to revenue growth with internet access revenues up 12% from the same period last year. Other significant contributors were interconnection, mainly comprising of domestic and international long distance calling party pays, which grew 31% and TELMEX Stores and Yellow Pages, which are part of the other income line. They produced a 53% increase in revenues year-over-year.

Total cost increased 1.5% for the quarter.

This was in line because of calling party pays, but also reflecting cost associated with integrating the newly acquired cable TV companies and now Latin American operations.

Operating income increased 3% with a marking of 28%.

EBITDA decreased 1.7%. Net income reached more than 8 billion peso, 18% more than in the second quarter of 2006.

The company’s main broadband Infinitum continue to produce strong growth.

In the second quarter, the firm added 253,000 internet access accounts. That growth brought the total to almost $2.4 million at mid year, 73% ahead of year ago. For the benefit of Mexican residential users, the firm will continue launching new packages that combine voice and data services to increase its market proposition to its customers, add that into packages to the different consumption provide because broadband drives the company’s business.

For small and medium sized businesses, the company packages a variety of value added services with a higher speed connection.

TELMEX’s outstanding network makes it possible for operators of small and medium sized business to access capabilities that used to available only for large corporate accounts. For example, the firm makes it possible for the SME segment to take advantage of virtual private networks, high capacity email platforms and online backup. These services are an example of how TELMEX grows on its technology and on market knowledge to take those services to particular market segment. The result is state-of-the-art capability for customers for less cost, than if they assemble these business tools on their own. At the same time, the firm benefits from increased use of its network and connectivity. In the corporate market, billed line equivalents increased 16% to 2.5 million. The firm continues to face strong competition in these market segments in spite of the customer growth, revenues decline 4% from the last year''s level.

Another effect of broadband growths, not so surprisingly is its impact on the number of lines and service.

During the second quarter, the company deactivated 14,000 trunks that supported dial-up internet. The company continues to evaluate line use so that its resources are aligned with market with the highest growth potential. Demand for that service is declining as expected, because it is encouraging customers to take advantage of broadband services. At June 13, the firm had 18.2 million lines in service. There is no doubt about the important role that data business plays in TELMEX performance, especially in Mexico this business represent 16% of the company’s revenues.

In the second quarter, the company also benefited from growth in Intercollection, Telmexico and Yellow Pages.