Webcast 3Q’09October 22, 2009

This document contains "forward looking statements" within the meaning of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statementsmay 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 futurebusiness and financial performance of TELMEX. Forward-looking statementsare based on management's current expectations and assumptions, which areinherently subject to uncertainties, risks and changes in circumstance that aredifficult to predict. Actual outcomes and results may differ materially from theseexpectations and assumptions due to political, economic, business, competitive,market, regulatory and other factors. Additional detailed information concerningthese factors is readily available in TELMEX´s Form 20-F and other filings withthe Securities and Exchange Commission. These documents are available onboth the SEC's and TELMEX's web sites. We undertake no obligation to updatepublicly or review any forward-looking information, whether as the result of newinformation, future developments or otherwise.

Forward-looking statements disclaimer

Worldwide trend

In the 3Q’09,lines in service declined by 69 thousand.

Even so, the third-quarter decrease compared favorably with our experience inprevious quarters.

Including cellular telephony services andother fixed operators.

This is similar to the average of 85.3% for the 35 countries identified in a recentindustry report as having high levels of telecommunications competition.

Factors are:• competition from cellular telephony

and others• the economic situation

TELMEX has:• 17.2% of total lines in

service• 83% of fixed lines

The worldwide trend toward fewer fixed lines in service is also evident in Mexico.

Broadband

On the other hand,Broadband continues the strong growth trends of the past five years, addingcustomers and increasing market share.

Infinitum Broadband Services(including cellular)

(million)

Dec. 03 Sept. 09

0.428

9.2

These positive developments reflect our substantial investments and thequality of our services, for example:

• We offer our customers the same speed throughout the day.• We have increased speed without increasing prices to customers by

passing along the benefits of our world-class technological platform.

Annual averagegrowth = 70.5%

Sales of computers

Broadband growth has been driven by :

• Installment sales of more than 2.3 million computers since 1999.

• In July we launched a laptop offering of well recognized brands with paymentsstarting at 100 pesos per month (VAT included), installments up to 48 months,and a down payment which value depends on the customer’s PC choice.

• Value proposition for customers who subscribe to Infinitum:

Free wireless access in public sites Internet access at more than 120 thousand sites worldwide

This progress has occurred even though Mexico is the only OECD membercountry and one of the few countries in the world that does not havetechnological convergence.

Convergence Agreement

“Acuerdo de Convergencia” (Convergence Agreement) established the basis forthe convergence of telecommunications networks in Mexico more than three yearsago.

TELMEX has met the requirements:

Nevertheless, to date the authorities have not issued the correspondingresolutions.

As a result of our commercial agreement to provide customer billing for DishMexico, we have observed significant growth of Pay TV services in the country.The Dish offering has attracted many customers who previously did not have thisservice.

InterconnectionNetwork interoperabilityNumber portability

Education and Digital Culture Program

Our emphasis on customer service, network quality, and advancing the digitalculture in our country are fundamental to how our company operates.

One of our major initiatives is to continue to deploy the “Programa de Educacióny Cultura Digital” (Education and Digital Culture Program).

Its purpose is:

to bring the digital world tostudents, parents and teachersnationwide through educationalworkshops and InformationTechnology tools.

We provide digital scholarships andequip educational settings withdigital libraries and computer halls.

These initiatives are helping morethan 1.5 million people take theirplace in the digital society.

Focusing on what we can control

The economic conditions have affected our results, but by focusing on what wecan control.

• We are able to perform well and stick to our strategies.

• We are committed to promoting penetration of broadband services, both to build ourbusiness and to expand the digital culture in Mexico.

These improvements in our service offering are being rewarded with customer loyalty.

On an international basis, Mexico increasingly is recognized among the countriesoffering customers the most competitive pricing for telecommunications services.

TELMEX is adjusting well… we are focused on customer service

Broadband

In the 3Q’09 broadband once againdrove TELMEX performance.

Since mid-year we have added 403thousand Infinitum accounts.

Total Internet customers at the end ofSeptember were 6.4 million, whichwas 40% ahead of the same time lastyear.

4.362

6.303

3Q08 3Q09

Infinitum Broadband Customers

(million customers)

Q/Q= 44.5%

Broadband…

The gap between the number of Infinitum customers and total Internet customerscontinues to shrink, another indication of how customers are recognizing thevalue of our broadband strategy.

• Along with that commitment comes arecognition that the service has to beaffordable to succeed in appealing tolarge numbers of users.

• As you no doubt are aware we have notraised basic rates for nine straight years

TELMEX has been able toavoid raising basic ratesbecause we are able topass along the benefitsour technology andefficiency to ourcustomers.

Computers

An important component of expanding the broadband market is to make surethat customers have access to computers.

TELMEX continues to be one of the most attractive price leaders in computersales in Mexico, largely because we introduced installment plans.

• We offer a variety of well recognized computer brands for every budget.

• We also keep bringing new ideas into the mix…. we introduced multi-service packages with computers.

This offer represents the first time we have combined a service package withthe computer purchase. It makes it even easier for the customer to walk out ofa TELMEX store with the computer in hand, online service arranged, andmonthly cost set.

Multi-service packages

We are encouraging customers to subscribe to these packages, both for thevalue they deliver and the consistency they offer for budgeting purposes.

Of course, that kind of predictability also helps TELMEX with planning andresource allocation.

Our customers are recognizing that we cover their telecommunicationsneeds with world-class quality at an affordable price.

19%

33%

3Q08 3Q09

Lines with at least one package(%)

Lines in service

At the end of the 3Q’09 we had 17.3 million lines in service, 69 thousand linesless than June 2009.

17.673 17.346

3Q08 3Q09

Fixed lines in service

(thousands)

Q/Q = (1.8)%

This decrease is a reflect of anenvironment of tougher economicconditions and higher competition fromfixed line operators, cellular companies, payTV companies, as well as result from ourmulti-service packaged offering .

Traditional business

Our own efforts to encourage broadband use, but facing tougher competitionand economic conditions once again combined to slow the pace of ourtraditional voice business.

3Q’09:

• Local calls 5.3 billion (6.4)%

• DLD traffic (minutes) 5.0 billion 1.8%

• ILD traffic (minutes) 1.9 billion (16.3)%• Outgoing ILD traffic (minutes) 324 million (34.1)%• Incoming ILD traffic (minutes) 1.6 billion (11.3)%• Outgoing - incoming ratio 4.8 times

• Interconnection traffic (minutes) 11.1 billion (4.8)%

• Mainly due to the increase of 40% in Internet access services Internet revenues increased18.0%.

• In the corporate market revenues increased 13.4% this was the result of the increase inservices from VPN and the integration of value-added services to our portfolio of productsand services.

Capital expenditures

• We continue to rationalize our resources, adjusting CAPEX andOPEX as appropriate and maintaining a conservative position in theoperation of our business.

• In the 3Q’09, CAPEX was the equivalent of 147 million dollars. Sofar this year, we have invested the equivalent of 537 milliondollars in our network and infrastructure.

Financial results

3Q’09: Inc.

• Revenues 29.5 billion pesos (5.0)%

• Costs and expenses 21.1 billion pesos (0.4)% Sales and services 2.9% Commercial, administrative and general 7.7% • EBITDA 12.9 billion pesos

Margin 43.9%

• Operating income 8.5 billion pesosMargin 28.7%

• Financing cost 1.3 billion pesos

• Net income 4.8 billion pesos (11.9)%

Pension fund

In the 3Q’09,

• We made a contribution to the pension fund of 5.6 billion pesos, (based on an actuarial assessment) and is deductible for income tax purposes.

• This contribution increased the net projected asset that we recognize in ourbalance sheet, in accordance with Mexican accounting rules.

• Net projected asset at June 30, ‘09 12.9 billion pesos+Contribution to the pension fund 5.6 billion pesos-Net periodic cost of labor obligations 1.2 billion pesos

Net projected asset at September 30, ‘09 17.3 billion pesos.

Debt

3Q’09

Total debt = 7.063 billion dollars.75.5% long-term68.9% foreign currency

Foreign debt = 4.864 billion dollars.

Debt hedged = 4.586 billion dollars.

Net debt = 6.484 billion dollars.

Regarding debt, on August 17 we prepaid the 1.3 billion dollars associatedwith tranche A of a syndicated loan, which we entered into three years ago.The agreement would have expired on October 20.

Approximately only 5.7% offoreign debt is exposed toexchange rate fluctuations.

Closing remarks

Finally,

I will summarize our performance by :

We understand our industry and our markets and we continue looking foropportunities.

The failure of regulators to allow convergence in Mexico takes away anattractive growth opportunity for TELMEX. The agreement took effect threeyears ago. We have met its requirements fully and in timely fashion.

We are ready to bring this service to customers.

Their lack of flexibility denies the proven advantages of convergence to theMexican people, discourages TELMEX’s growth and investment, and hurtsMexico’s national development. This is a lose-lose- situation.

Our main growth drivers :

• Broadband,• Multi-service packages• Our ongoing efforts to manage our resources smartly

Closing remarks

It is especially difficult for a company like TELMEX, which is driven to deliverwins for customers, our country, the company, and shareholders.

• We will continue to work for the advancement of our country while wepursue strategies that show our commitment to our customers andshareholders.

• We demonstrate this commitment to customers every day by offering moreand better services at attractive prices and with great quality.

• TELMEX’s commitment to shareholders takes shape in applying our assetswith an emphasis on efficient use and profitable results, while preserving asolid financial position.

Webcast 3Q’09October 22, 2009