Telefonica Brasil : 06/30/2016 - Notice to the Market - Vivo is the highlight of the ranking Melhores e Maiores Empresas from Exame magazine

In a year marked by the corporate consolidation and digital transformation, the Company was highlighted among 3 thousand evaluated companies in 20 sectors of the economy

Vivo is the highlight of this year's ranking Melhores e Maiores Empresas (Biggest and Best Companies) from Exame magazine, considered the most complete picture available about the corporate companies in Brazil. Prepared by the technical team of Fipecafi - Instituto de Pesquisas Contábeis of University of São Paulo -, the study initially evaluated more than 3 thousand companies to rank, at the end, 1.3 thousand companies from 20 sectors of the economy. The criterion is the net revenue in dollars, income and profitability, as well as the evolution when compared to the previous year and the performance compared to competitors. In 43 years of the ranking, it is the first time a company in the telecommunications industry is the big winner.

In 2015, Vivo's net revenues reached 42 billion reais, 4.8% more than the previous year and the largest in the telecommunications sector, with an increase in the EBITDA margin, which stood at 30.2%, also higher than the rest of the companies. In addition to the growth in all high-value segments, such as postpaid and data packages in mobile telephony, ultra-speed broadband and Pay TV in fixed services, the Company managed to add efficiency to operations. Despite the adverse economic environment, operating costs rose 5.4%, or less than inflation of the period.

The Company maintained investments focused especially in quality and expansion of customer services. In 2015, 8.3 billion reais were invested, reaffirming the Company's commitment to Brazil. "The year 2015 was extraordinary for Vivo because we consolidated the Company as a leader in the sector, from the combination with GVT; we advanced in the digital transformation with projects that generate efficiency and simplification of products, services and customer care; we built a unique culture and continue to believe in the country by maintaining investments over 8 billion reais focused on quality and expansion", says the Chief Executive Officer of Vivo, Amos Genish. For the executive, more than being the biggest, the important thing is to focus on being the best company for the customer and contribute to the development of the country.

São Paulo, June 30, 2016.

Investor Relations Officer

Telefônica Brasil S.A. - Investor Relations Tel: +55 11 3430-3687

Email: ir.br@telefonica.com www.telefonica.com.br/ir