*** For immediate use October 13, 2014

Dusseldorf, 13th October 2014 - Telefónica and NEC Corporation (NEC; TSE: 6701) announced today their participation in the SDN & OpenFlow World Congress 2014, taking place in Swissôtel, Düsseldorf, from 14 - 17 October 2014. The companies will be showing the deployment and orchestration of a residential virtual Customer Premises Equipment (vCPE) solution over the Network Function Virtualisation (NFV) Reference Lab platform launched by Telefónica earlier this year.

The vCPE solution was developed by Telefónica and NEC under a global framework commercial agreement signed by both companies. The vCPE solution enables certain IP functions to be shifted away from residential gateways towards a carrier's own network. Virtualisation of CPE minimizes network functionalities of home equipment, making the equipment simple, stable and enabling quick evolution supported by software inside an operator's network.

The demo will be on display at the Intel booth (number 39) in the main exhibition area of the SDN & OpenFlow World Congress 2014, and will demonstrate the feasibility of deploying and orchestrating a virtualized network function over Telefónica's NFV Reference Lab platform. This platform includes a simplified NFV orchestrator - aware of Virtual Network Functions (VNF) requirements - that enables a deterministic mapping of CPU and memory and a simplified VNF manager. This example of network creation and management based on a vCPE use case shows the possibility of doing automated deployments of virtualized network nodes and their interconnections over a NFV platform that enables a deterministic resource allocation to virtual machines which ensures a high and predictable performance.

Telefónica announced earlier this year the launch of its NFV Reference Lab to help its ecosystem of partners and network equipment providers (NEPs) test and develop virtual network functions along with upper service orchestration layers. This joint demo shows the cutting-edge work being developed by NEC, Telefónica and Intel in one of the most demanding and attractive network scenarios. The NFV platform used to set up this PoC is based on Commercial Off-the-Shelf (COTS) Intel® Xeon® processor E5-2600 servers, Intel® Data Plane Developer Kit (Intel® DPDK) and Intel® Niantic NICs, on Red Hat KVM environment and on Brocade switches.

Currently, the vCPE solution presented at the NFV PoC zone is being tested by NEC in the real network of Telefónica's Brazilian affiliate, VIVO, in an ongoing trial where economic benefits, network flexibility and user convenience is carefully being measured.

"This demo shows how the use case of residential vCPE is deployed and orchestrated in an NFV open platform as the one created in our NFV Reference Lab. We are confident that the deployment of vCPE will play a key role in our plans of virtualizing infrastructures in Telefónica, where the availability of NFV-ready baseline technologies will be essential," said Mr. Enrique Algaba, Director of Network Innovation at Telefónica I+D - Global CTO Unit.

"This ongoing vCPE project is based on our global agreement and is a major step towards network virtualization." said Mr. Atsuo Kawamura, Senior Vice President, NEC Corporation. "NEC will fully support Telefónica in this transformation by providing an ecosystem solution that enables significant OPEX savings as well as allowing easy and quick deployment of new services. Telefónica and NEC will work together in the implementation of this vCPE solution and accelerate NFV across the industry."

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About Telefónica
Telefónica is one of the largest telecommunications companies in the world in terms of market capitalisation and number of customers. With its best in class mobile, fixed and broadband networks, and innovative portfolio of digital solutions, Telefónica is transforming itself into a 'Digital Telco', a company that will be even better placed to meet the needs of its customers and capture new revenue growth.

The company has a significant presence in 24 countries and a customer base that amounts almost 316 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.

About NEC Corporation
NEC Corporation is a leader in the integration of IT and network technologies that benefit businesses and people around the world. By providing a combination of products and solutions that cross utilize the company's experience and global resources, NEC's advanced technologies meet the complex and ever-changing needs of its customers. NEC brings more than 100 years of expertise in technological innovation to empower people, businesses and society. For more information, visit NEC at http://www.nec.com.

Intel and Xeon are registered trademarks of Intel Corporation in the United States.

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