The new report, entitled "Vodafone, Telefónica and Telecom Italia: Peer Comparison", is now available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release.

The Peer Comparison report explains the drivers for a rating gap between Vodafone Group Plc (A3 stable), Telefonica S.A. (Baa2 negative) and Telecom Italia S.p.A. (Baa2 negative), given that the three telecom operators have a large exposure to European peripheral countries.

"Vodafone derives a large part of its benefits in terms of geographical diversification, stronger financial profile and financial flexibility from its 45% equity stake in US mobile operator Verizon Wireless," says Ivan Palacios, a Moody's Vice President - Senior Credit Officer in Moody's Corporate Finance Group and co-author of the report. "These benefits support the two-notch difference between Vodafone's rating and that of Telefonica and Telecom Italia," explains Mr. Palacios. "Nevertheless, we recognise Vodafone's structural challenges linked to its mobile-centric business model and position as a market challenger, which are offsetting factors when compared with Telefonica or Telecom Italia."

Moody's report focuses on the most relevant factors that drive the ratings of these companies: (1) geographical footprint; (2) leverage and financial flexibility; (3) liquidity and refinancing risk; and (4) business model and market positioning.

Moody's recognises that Telefonica is the market leader in most of the markets where it operates and is geographically diversified in Latin America and within Europe, but it remains highly exposed to Spain. The deteriorating performance of its Spanish business has weakened its credit metrics, reduced its financial flexibility and increased its refinancing risk due to the potential contagion from the sovereign.

Telecom Italia offsets its limited geographical diversification and weaker credit metrics with its leading position in the Italian market and its very strong operating margins, the highest among Moody's European rated telecom operators. However, its financial flexibility is limited and it is exposed to a weak domestic macroeconomic environment.

Subscribers can access this report via this link http://www.moodys.com/research/Vodafone-Telefnica-and-Telecom-Italia-Peer-Comparison-Credit-Focus--PBC_147451. NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: London+44-20-7772-5456, New York+1-212-553-0376, Tokyo+813-5408-4110, Hong Kong+852-3758-1350, Sydney+61-2-9270-8141, Mexico City001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

Ivan Palacios VP - Senior Credit Officer Corporate Finance Group Moody's Investors Service Espana, S.A. Calle Principe de Vergara, 131, 6 Planta Madrid 28002 Spain JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Paloma San Valentin MD - Corporate Finance Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Espana, S.A. Calle Principe de Vergara, 131, 6 Planta Madrid 28002 Spain JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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