TELMEX Will Spin Off Its Cellular Businesses, and Most of Its International Investments

TELMEX will spin off its cellular businesses, and most of its international investments to form a New Company

América Móvil, the new company to be established in the Spin-off, will be Latin America’s largest cellular provider
Spin-off will strengthen TELMEX´s results and financial position

MEXICO CITY, September. 6, 2000 -- Teléfonos de México (NYSE:TMX) today announced that it will spin-off its cellular business and most of its international investments to create a new company to be named América Móvil. The spin-off proposal, approved today by TELMEX’s board of directors, will create two companies whose highly focused management teams can more quickly and efficiently capitalize on emerging opportunities and challenges that may arise in their respective markets.

The spin-off is subject to approval by shareholders and several governmental authorities

TELMEX´s board of directors determined that the spin-off would help increase operating and financial efficiency of both companies.

América Móvil will be created via a spin-off transaction which, based on the advice of TELMEX’s counsel, should be tax-free for the company’s shareholders. TELMEX shareholders will receive an equivalent number of América Móvil shares.

TELMEX will continue to be a Mexican provider of integrated telecommunications services with the best technology that allows it to deliver the highest quality of services to its customers. TELMEX expects to emphasize its Internet strategy, which includes the Hispanic T1msn.com Portal and other initiatives related to the data services such as e-commerce and Internet Data Centers.

After the spin-off, TELMEX will maintain a solid financial position that will allow it to continue investing in technology enhancements, expand its market and sustain growth and development of products and services for the Mexican market.

América Móvil will be Latin America’s largest cellular communications provider, with more than 9.9 million cellular subscribers. Based in Mexico City, América Móvil, will consist of the cellular business in Mexico and most of the international investments that TELMEX has made during the last few years, including recent acquisitions in South America.

“With the spin-off, TELMEX´s financial position will strengthen with better and more stable results unaffected by the new international businesses that, due to their growth and maturity stage, require important amounts of resources” said Carlos Slim, chairman of the board.

“TELMEX will continue to have a strong and highly qualified labor force by providing permanent training to its personnel in new technologies that will increase services offered to its customers”.

“With this spin-off, América Móvil will have more flexibility to continue its dynamic expansion through associations, alliances and mergers as well as entering the capital markets” Mr. Slim concluded.

On a pro forma basis, TELMEX estimates that for the first six months of 2000 América Móvil would have had revenues of approximately 11,793 million pesos, EBITDA of approximately 3,146million pesos and net income of 154 million pesos, that only would represent 1.4% of TELMEX´s consolidated net income.

This press release contains forward-looking statements regarding consummation of the Spin-off and of Telmex’s results. Actual results could differ materially from these forward looking statements. This information, as well as future reports made by Telmex or any of its representatives, verbal or written, could differ materially from the real results. These forward-looking statements which were made on a specific date, should not be considered as statements of fact. Telmex undertakes no obligation to update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise.