TELEFÔNICA BRASIL S.A.

PUBLICLY TRADED COMPANY

CNPJ/MF nº 02.558.157/0001-62 - NIRE 35.3.0015881-4

NOTICE TO THE MARKET

Telefônica Brasil S.A. announces that to facilitate the understanding and monitoring of the financial performance in the mobile and fixed businesses, the company has decided to publish the selected consolidated financial data corresponding to Telefónica Brasil, providing service revenue breakdown by service instead of by company, from the fourth quarter of 2011 on.

We would like to point out that this amendment will not change in any way the total net revenues, EBITDA or consolidated margins.

The Company will continue to report all the operating metrics previously reported. The changes in reporting result from the following events:

- Fixed and long distance license outside São Paulo was transferred from Telefonica Brasil to the wholly-owned subsidiary Vivo S.A. as of October 20th 2011;

- Launch of fixed services through mobile technology (FWT) outside São Paulo since October 7th 2011;

- Incorporation of Vivo Participações S.A. into Telefônica Brasil S.A. as of October 3rd 2011;

- Increasing volumes of intercompany transactions, distorting the understanding of business performance.

Consequently, as of 4Q11 the press release of Telefonica Brazil will have the following differences from what is currently presented:

- Allocation of long distance revenues according to origin instead of license (e.g. long distance calls originated by a mobile access, in any region of Brazil, will be considered as mobile revenue. Before they were accounted in both businesses to be then eliminated on a consolidated level.);

- Allocation of revenues arising from the FWT solution (Vivo Fixo and Vivo Box products) as fixed revenues;

- Presentation of the revenue evolution in the mobile and fixed segments after intercompany eliminations in order to reflect the financial performance of the integrated company. This will also reflect more precisely the company's exposure to some factors as interconnection.

We also emphasize that, in order to facilitate like for like comparisons, revenues breakdown for 2010 and the first nine months of 2011 have been restated, as per the table below.

São Paulo, February7th 2012

Gilmar Roberto Pereira Camurra

Chief Financial Officer

Telefônica Brasil S.A.

Investor Relations

Tel: +55 11 7420-1172

Information available: www.telefonica.com.br/investidores