TELMEXWebcast 2Q’10

July 21, 2010

This document contains "forward looking statements" within the meaning ofthe Private Securities Litigation Reform Act of 1995. Forward-lookingstatements may be identified by words such as "believe," "anticipate," "plan,""expect," "intend," "target," "estimate," "project," "predict," "forecast,""guideline," "should" and include, but are not limited to, statements about theexpected future business and financial performance of TELMEX. Forward-looking statements are based on management's current expectations andassumptions, which are inherently subject to uncertainties, risks and changesin circumstance that are difficult to predict. Actual outcomes and results maydiffer materially from these expectations and assumptions due to political,economic, business, competitive, market, regulatory and other factors. Additional detailed information concerning these factors is readily available inTELMEX´s Form 20-F and other filings with the Securities and ExchangeCommission. These documents are available on both the SEC's and TELMEX'sweb sites. We undertake no obligation to update publicly or review anyforward-looking information, whether as the result of new information, futuredevelopments or otherwise.

Forward-looking statements disclaimer

Introduction

We will continue to carry out investmentsthat allow us to keep up our state-of-the-arttechnology and world-class network.

Therefore, we have nearly 7 millionbroadband Infinitum customers attracted bythe quality, continuity, speed and price of ourservices, with growth of 17.9% in the lasttwelve months.

During the last 10 years Mexico achieved thehighest growth rate in the number of totalaccesses of telecommunications servicesamong OECD member countries*

22

11

Mexico OECD

Total average growth rate in accesses oftelecommunications services among

OECD members for the 10-year period.

(percentage)

TELMEX remains committed to offering our customers products and serviceswith the highest quality standards and maintaining Infinitum as the best productin the market.

The figures cover the full range of telecommunicationsservices, including fixed, mobile and broadbandservices.

* According to the international organization’s most recent report, the Communications Outlook 2009.

Introducction

At June 30,

We had 15.7 million lines in service, 1.7million fewer than June 2009.

TELMEX’s share of fixed lines has continuedto decrease, to 79.5% of fixed lines in Mexico.That is below the average of 85.6% for 35 ofthe most representative countries worldwide,as compiled in the Bank of America/ MerrillLynch 2010 Wireline Matrix.

TELMEX has 14.9% of the market withcellular telephony services included.

15.882 15.811 15.744

4Q09 1Q10 2Q10

Billed lines in service

(thousands)

2010 Program

Education

• The education role primarily is the responsibility of the TELMEX Institute, orInttelmex IT. Its main objectives are to form and develop professionals andspecialists in information technologies.

• Inttelmex has trained more than 450 IT professionals

Our priorities of providing outstanding customer service andadvancing the digital culture come together in our Program, 2010 –The Year of Technological Innovation.

We are focusing on expanded connectivity, more use of informationtechnologies, and education to support the digital culture.

Update on the initiatives:

2010 Program

• In the area of education and digital culture, we have installed 2,650 BibliotecasDigitales, or digital libraries and Digital Classrooms, to make it easy forcustomers and students to borrow and use computers.

Connectivity

• By the end of June, we had installed more than 2,250 “WiFi Móvil en Infinitum”sites in airports, bus stations, parks, shopping malls, restaurants anduniversities, including the campuses of UNAM, Mexico’s national university.

• The accomplishments under 2010 – The Year of Technological Innovation aretaking shape in spite of the challenges facing our nation and much of theglobal economy.

Convergence

• Total revenues in the second quarter were 28.4 billion pesos. That represents adecrease of 4.6% compared with the same period last year. The decline ismainly due to the continuous reduction in the price of our services and to theunexplainable delay of technological convergence.

• Mexico took a significant step toward offering the benefits of convergencealmost four years ago On October 3, 2006, the Secretaría de Comunicaciones yTransportes issued the framework for full convergence of telecommunicationsnetworks in our country. Even though we signed this agreement, TELMEX isnot allowed to offer this benefit to customers and the country.

• Nevertheless, TELMEX is not standing still, as programs like 2010 – The Yearof Technological Innovation demonstrate. We are doing the best that we canfor customers in the areas where we do have a presence.

Operations and performance

2Q10,

We added 183 thousand Infinitum accounts.

Internet customers totaled a little more than 7million, 16.5% higher than a year ago.

Infinitum broadband customers

(million)

5.900 6.954

2Q09 2Q10

Q/Q= 17.9%

Our well-established computer installment purchase program has made us oneof the leaders in computer sales in the country. Through that program we offerhigh-quality, brand-name computers for every budget. In the residential marketwe offer speeds of one to five Megabits.

Operations and performance

Programs like these encouragecustomers to continue to shopTELMEX for their computers.

They bought almost 69 thousand in thesecond quarter.

Altogether we have sold more than 2.6million since we first brought thisinnovation to the market.

Operations and performance

During the 2Q10,

Billed lines decreased by 67 thousand mainlybecause of higher competition from cellularcompanies and pay TV companies thatintegrate telecommunications services.

The number of billed lines at mid-year totaled15.7 million.

In a market that includes cellular telephonyservices and other fixed line operators,TELMEX has a 14.9% share.

15.882 15.811 15.744

4Q09 1Q10 2Q10

Billed lines in service

(thousands)

Operations and performance

The numbers continue to reflect changing market conditions as well as economicimpact.

2Q’10

• Local calls 4.9 billion (7.3)%

• Interconnection traffic (minutes) 11.0 billion 1.4 %

• DLD traffic (minutes) 4.7 billion (6.9)%

• ILD traffic (minutes) 2.1 billion 24.0%

• Outgoing ILD traffic (minutes) 339 million (1.6)%

• Incoming ILD traffic (minutes) 1.8 billion 31.0%

Outgoing - incoming ratio 5.3 times

The traffic trends are another indication of how complex this telecommunicationsenvironment is. It also shows how the market in Mexico is changing as customerstake advantage of convergence and companies consolidate to provide the fullrange of services customers want.

Packages

• Our packages that combine Internet access and telephone service continue to attract newcustomers.

• We are constantly comparing features with market opportunities, and we add new benefitswhen it makes sense to do so.

• Most recently, we included unlimited minutes in domestic long distance and to the USA inour “Todo México y Estados Unidos Sin Límites” package.

Financial results

We continue to rationalize resources and adjust CAPEX and OPEX aswe maintain a conservative position in the operation of our business.

As part of that approach, we review CAPEX every month. In the firsthalf we invested around 327 million dollars.

We remain committed to offering our customers products andservices with the highest quality standards and maintaining Infinitumas the best product in the market.

This commitment means that we will continue to make investmentsto keep up our state-of-the-art technology and world-class network.

Financial results

2Q’ 10 Inc.

_Revenues 28.4 billion pesos (4.6)%

_Costs and expenses 21.5 billion pesos 1.3%

_EBITDA 11.3 billion pesosMargin 39.6%

_Operating income 7.0 billion pesosMargin 24.1%

_ Financing cost 1.2 billion pesos

_Net income 3.6 billion pesos (39.7)%

Financial results

It is important to mention that within TELMEX, one way we are paying attentionto the economic climate and minding our own financial position is byprepaying and refinancing debt.

Total debt was 6.696 billion dollars, 944 million dollars less than at the end ofthe second quarter in 2009.

• Total debt to EBITDA 1.7x

• EBITDA to net interest 8.3x

Closing remarks

• During the first half of the year, economic recovery appeared to be taking holdin the USA and in particular in Mexico. There are signs of economic recovery insome areas of the local market; however, the path forward still is not clear.

• As we have noted on previous calls, we are constantly on the lookout foropportunities to pass along the advantages of our advanced technology to ourcustomers in the form of lower prices and higher value for the same monthlyrent.

• Second-quarter results once again demonstrate the TELMEX commitment tovalue for our customers, our country and our shareholders. We have continuedto align our services with customer needs, adding features to thetelecommunications service packages, increasing Internet speeds and adjustingpricing.

Closing remarks

• At the same time, we are paying attention to shareholders as we maintain aconservative financial structure, leverage available resources and control costs.

• We are realistic about the challenges we face, from global economic conditionsto the domestic regulatory climate and strong competition. This is a marketwhere convergence is proceeding rapidly but unevenly in part because theplaying field is not level.

• All of these conditions affect our results, it is true. But we are confident aboutour future because we will continue to apply our resources to serve ourcustomers well, revolutionize the market and enlarge the digital culture.

Webcast 2Q’10July 21, 2010

Thank you.