Fixed Telecommunications is divided into Basic Telephony, Broadband, Television, Access Charges and Interconnections, and Other Fixed Telecommunications Businesses (including equipment marketing, directory advertising, and public telephones, among others). Fixed telecommunications revenues, which represented 78.0% of total operating revenues in 3Q07, increased 4.1% as compared to 3Q06, amounting to Ch$121,689 million (US$238.0 million). This is mainly attributable to the Company's bundling strategy for its voice, broadband and TV services, through a flexible offer where clients combine services to suit their needs.

Basic Telephony revenues, which include the fixed monthly charge, variable charge, connections and other installations, plans of minutes (allowed under tariff flexibility), value-added services and other basic telephony revenues (services through operator and rural telephony, among others), decreased 11.3% to Ch$61,443 million (US$120.2 million) in 3Q07 as compared to 3Q06. This decrease is mainly attributable to a 37.1% decrease in the fixed monthly charge and a 33.8% decrease in the variable charge. These were partially offset by an increase in revenue from plans of minutes associated with tariff flexibility, which represented 66.5% of total lines in service as of September 30, 2007. Revenues from flexible plans account for 20.9% of total revenues, surpassing the aggregate revenues from traditional telephony (fixed charge + variable charge). Basic telephony revenues have also been affected by: (i) an 11.3% decrease in average traffic per line for 3Q07 compared to 3Q06; and (ii) a 4.9% decrease in average lines in service compared to 3Q06, mainly as result of the decrease in market share. However, revenue diversification through the increased mix of plans associated with tariff flexibility helps mitigate the decline in revenues due to lower traffic and lines in service.

Broadband (ADSL) revenues amounted to Ch$26,366 million (US$51.6 million) in 3Q07, an increase of 65.5% with respect to 3Q06. This increase was primarily due to: (i) the 30.7% growth in ADSL connections in the quarter, driven by a commercial focus on selling bundled plans of broadband plus minutes of voice and digital TV (for residential customers), as well as a new plan for small and medium enterprises, called "Puesto de Trabajo Informatico". This plan was launched in July 2007 and consists of plans of minutes bundled with broadband, including the PCs necessary to provide the broadband service, which all led to increased market share of 49% as of September 30, 2007; and (ii) a change in the marketing of the "Speedy" internet service. Beginning in 2007, all revenues from broadband and internet access collected from clients are recorded in the income statement, and outsourcing service costs are recorded in general expenses; the effect of this change on net income is neutral. By providing a single point of contact, through which the Company provides the customer with both the broadband infrastructure and, through outsourcing, internet access, the Company strengthens its relationship with the final customer. In 3Q07, the Company recognized Ch$4,100 million in additional revenues related to this change.

Revenues from the Pay TV business launched in June 2006 amounted to Ch$7,002 million (US$13.7 million) in 3Q07, accounting for 4.5% of total revenues. As of September 30, the Company had 197,279 Pay TV clients, attaining 16.0% market share. During 2007, the Company has enhanced its offer, incorporating five additional channels and, in June 2007, complementing its existing TV offering with interactive services through IPTV (television over broadband). The interactive services include Video on Demand (VoD), which features a virtual library with over 200 hours of content. Additionally, in September 2007 the Company launched the personal video recorder service (PVR), which allows the client to record, pause, rewind or fast-forward any TV program.

Access charges and interconnection revenues include revenues from access charges generated by LD carriers, as well as those paid by other telecommunications operators that use Telefónica Chile's network. They also include other interconnection services apart from access charges, such as network unbundling, interconnection of networks, information services for carriers and network services for wholesalers, among others. These revenues decreased by 9.6% in 3Q07 to Ch$12.956 million (US$25.3 million). This difference was mainly due to decreases of 19.6% and 2.0% in access charge revenues from DLD and ILD, respectively. Long distance access charge traffic decreased 17.3% in 3Q07 as compared with 3Q06.

Revenues from Other fixed telecommunications businesses include revenues generated as a result of the Company's contract with Publiguías, revenues from dedicated and dial-up Internet service, revenues generated by the subsidiary Telemergencia (home security services), and revenues from public telephones, interior installations, and equipment marketing. These revenues decreased 15.7% in 3Q07 to Ch$13,922 million (US$27.2 million) as compared to 3Q06. This is mainly due to lower revenues from: (i) directory advertising (-28.6%), due to greater market competition; (ii) dedicated and dial-up Internet access (-74.2%), due to the migration of clients to broadband (ADSL); (iii) Telemergencia home security services (-18.2%), due to greater market competition; (iv) public telephones (-39.9%), due to lower traffic and lines, as a result of mobile substitution; and (v) interior installations (-10.5%), due to the lower number of lines subject to maintenance charges. The above were partly offset by equipment marketing revenues, which amounted to Ch$1,297 million (US$2.5 million) in 3Q07 as compared to Ch$323 million (US$0.6 million) in 3Q06. This increase is mainly explained by the sale of computers and telecommunications equipment associated with the "Puesto de Trabajo Informatico" plan for small and medium enterprises, which was launched in July 2007.