Tuesday February 13, 2007

4Q’06 ResultsTELMEX - Webcast

This document contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements 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 the expected future business and financial performance of TELMEX. Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstance that are difficult to predict. Actual outcomes and results may differ 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 in TELMEX´s Form 20-F and other filings with the Securities and Exchange Commission. These documents are available on both the SEC's and TELMEX's web sites. We undertake no obligation to update publicly or review any forward-looking information, whether as the result of new information, future developments or otherwise.

Forward-looking statements disclaimer

Telecommunications Competitive Landscape

During this period, we have

invested around 28 billion dollars.

1.8

28.0

1990 2006

(million dollars)

Total investments (CAPEX)

CAGR= 20.1%

•Close to 23 thousand communities •More than 90% of the population covered

Telecommunications Competitive Landscape

• more than 21 thousandrural communities

• that will benefit more than 21 million people

At TELMEX,

• we continue enhancing our service

offerings and modernizing the

telecommunications platform for rural telephony that will increase our presence, optimize the required investment and reduce our OPEX

Telecommunications Competitive Landscape

In 2006, as a result of our focuson profitability resulted in a net loss

of 124 thousand lines for the full year.

As of December 2006, we had

18.25 million lines in service.

TELMEX’s commitment for

meting demand has made us the onlyfixed-line operator in Mexico that has

presence in homes of the C-, D and E segments.

(percentage)

Fixed and mobile customers

24%

76%

TELMEX

We disconnected 864 thousand lines thatwere not activelyproducing revenues

Strategies going forward

One, Evolving residential revenues from single voice and data services tomultiservice packages with fixed monthly revenues.

Two, Stopping the decline in voice revenues while at the same time accelerating broadband and data revenue growth.

We know that customers value service abovetechnology.

Strategies:

Strategies going forward

Three, Continue developing a better value proposition for small and medium-sized businesses, giving them access to products that were onlyaccessible for large corporations.

Four, Expand our partnership with corporate customers as theyincreasingly outsource their telecommunications and informationtechnology.

Five, We will continue delivering the best array of services with superior quality by focusing most of our investment towards the growth of newservices and further improving our state-of-the-art data network.

Strategies:

Overview

Latin American companies generate 27% of TELMEX's revenues

The CAGR for revenues over the last threeyears has been 24% a year

Latam :

• Net Serviços significantly expanded itsreach by the share exchange with Vivax

• Participation in Embratel currentlyreaches 97.4%

Execution strategies:

•Pass over 8.4 million homes

•Account for nearly 64% of total cable infrastructure in Brazil,

•181,900 subscribers

First, Embratel is consolidating its position in the commercial data business and increasing local service offerings for the residentialsegment.

Overview

Second, through the acquisition of cable companies in Colombia and Peru, we are solidifying our position in the residential market for providing triple play services.

In Colombia, acquired three cable operator:

•Pass over 2.5 million homes•Presence in Bogota , Cali and Medellin

Acquisitions from February 2004 through year-end 2006 3 billion dollars were invested.Last year CAPEX for this region was around 890 million dollars.

•Pass over 233 thousand homes,

•Presence in Lima and Chiclayo

In Peru, we are in the process of acquiring Boga, a cable TV operator:

Mexico execution strategies

First,during the quarter, we continue increasing penetration of Prodigy Infinitum services, that originated the highest quarterly gain in ADSL services.

Second, we continue our transition to packaged services.

Third, we continue growing with profitability, investing in the development of the data businesses.

Mexico execution strategies - Broadband connectivity

We added 231 thousand ADSL accounts during the quarter, our largest quarterly gain, bringing the total to 1.8 million services, 76.4% ahead of a year ago

ADSL customers accounted for 68%of total access accounts, 20% more than a year ago

43

75

4Q05 4Q06

(average customers per month in thousands)

ADSL Customers

Y/Y= 74.4%

156

465

Multi-service packages

4Q05 4Q06

Y/Y= 198.1%During ’06, we doubled the ADSL speed and we integrated multi-service packages and we increased the PC sales 78%

(Thousands)

Total billed line equivalents

Y/Y= 15.9%

In the corporate market,

Total billed line equivalents

increased 15.9%compared with last year due tothe increase in VPN´s (Virtual Private Networks) offerings that provide customers higherquality services whileoptimizing their IT expenditures and networkmanagement

2,0112,330

4Q05 4Q06

Mexico execution strategies - Corporate market

Mexico execution strategiesTransition to fixed revenue flows

At year-end, Service packages

244% Local packages

32% LD packages

198% packages with ADSL

Dec’05 Dec’06900

1,654

465

302

1,252

156

(thousand units)

The packages give customers access to attractive rates for

outstanding quality, especially compared with other options in

the market. The packages also improve customerretention and we benefit from fixed revenues.

We continue to follow our policy of disconnecting unprofitable lines in

Mexico, even though it has meant a 0.7% reduction in total lines in service since year-end ‘05.

In 4Q’06, we disconnected 377 thousand lines, mainly prepaidlines that were not generatingusage and revenues, together with 326 thousand conventionaldisconnections

This strategy increased ARPUof the Multifon prepaid linesby nearly 27%

703

352

(351)

4Q06

(thousands)

Connections / Disconnections

Connections

Disconnections

Net gain

Mexico execution strategies -Growth with profitability

Mexico CAPEX (%)

77%

17%

6%

Growth and modernization

Operatingneeds and

operationalsupport

Socialtelephony

In Mexico, as part of our profitability strategy, our

emphasis on CAPEX is onupgrading and adapting our network to new technologies

Total CAPEX in ’06 was

1.166 billion dollars

Mexico execution strategies -Growth with profitability

20,513 20,807

4Q05 4Q06

Mexico’s financial performance

Mexico costs & expenses

Revenues benefited from Internet and interconnection fees as well as contributions from yellow pages and TELMEX stores.

The introduction of domestic and international calling party generatedrevenues in the quarter of 534 million pesos but reduced thoseof DLD in around 127 million pesos.

33,161 33,081

4Q05 4Q06

(millions of Mexican pesos as of December 2006)

Mexico revenues

Q/Q= (0.2)%

Q/Q= 1.4%In the quarter, costs increased 1.4%. Ifwe eliminated the abovementioned effect, costs wouldhave decreased around 2.5%.

Mexico’s financial performance

Operating income decreased

3%, producing a margin of 37.1% for the quarter.

EBITDA decreased 3% in the

quarter, generating a margin of 50.4%

EBITDA and Margins (%)16,66717,234

4Q05 Mex 4Q06 Mex

52.0 50.4

12,648 12,274

4Q05 Mex 4Q06 Mex

Operating income and Margins (%)(millions of Mexican pesos as of December 2006) and (%)

38.1 37.1

Local services and data continue to grow.

Latin America results (Brazil)

• Local customers increased 32%

• Triple play services were 181,900

• Line equivalents increased 37%

We are adding triple play customers at a

rate of 20 thousandper month.

Latin America results (Brazil)

Embratel’s fourth quarter results show a strongperformance:Revenues:

Local increased 18.6%DLD increased 5.5%Data business increased 6.5%

Excluding this effect, Embratel’s EBITDA would have been 376

million reais, 3.3% more than on the 4Q ’05.

Cost & expenses:

Embratel reached an agreementwith Brazil’s Supreme Court, regarding contingencies fromincome tax on inboundinternational long distance traffic, which originated a non-recurringcharge of approximately 222 millionreais

TELMEX’s ownership of Embratel was 97.4% total shares.

Latin America results (Other operations in Latam)

We have focused our efforts on growing and strengthening the service offering, especially throughrecent acquisitions in the region.

In 4Q’06, our operations in Chile, Argentina, Colombia and Perugenerated:

Revenues increased 13%, totaling 103 million dollars

EBITDA increased 11.1%EBITDA margin of 19%

Consolidated revenuesincreased 1.7% from a year ago, driven mainly by the increase of

9% on Internet and 11% onthe data business.

Total costs increased9.4% in the quarter, due to additionalinterconnection charges from long distance calling party pays.

Consolidated results

30,289 33,148

4Q05 4Q06

Consolidated costs & expenses

43,988 44,751

4Q05 4Q06

(millions of Mexican pesos as of December 2006)Consolidated revenues

Q/Q= 1.7%

Q/Q= 9.4%

TELMEX’s comprehensive financing cost:

Comprehensive financing cost generated a credit of 224 million pesos. This, because in December, Embratel reached an agreement with Brazil’sTreasury Ministry regarding the Lucro Liquido Tax which generated a non

recurring profit of 603 million reais.

Consolidated results

If we eliminate this transaction,

comprehensive financing cost would have been 2.8 billion pesos, an increase of 610 million pesos mainly due tounwinding of interest rate swaps in Mexico that produced a weighted interest rate of 8.5%.

Net income(millions of Mexican pesos as of December 2006)

8,585

7,401

4Q05 4Q06

Q/Q= (13.8)%

Consolidated results

30,006 28,534

2005 2006

Y/Y= (4.9)%

Executing strategies to deliver profitable growth:

In Mexico,that means an emphasis on data services to increase the ARPU per line. We disconnected lines that customers were not using, as well as pursuingmarketing efforts that encourage customers to sign up for multipleservices.

In Latin America,we are increasing our presence in a number of ways — with more robustinfrastructure, attractive offerings, and fill-in acquisitions that complementthe foundation we have already established.

Closing remarks

2006 was a year of both challenges and accomplishments.

The current transformation of the business is in place and we are carefullymanaging the implications of the changes that are necessary to makeTELMEX an even better performing company.

We understand our industry and our markets

We are on the lookout for opportunities in markets where we can leverage our competitive skills

We have the resources and the discipline to act only on opportunitiesthat offer profitable growth

Closing remarks

The strategies are to further build our relationship with our customers, as well as deliver shareholder value.

Tuesday February 13, 2007

4Q’06 ResultsTELMEX - Webcast