Acquisition

Telefonica SA
25 July 2000


'TELEFONICA, S.A.' and on behalf of this company the General Vice Secretary and
Vice Secretary of the Board, Diego Lozano Romeral, in accordance with that
stated in article 82 of the Spanish Stock Market Law and that set forth in the
Circular Letter 14/1998 of the Spanish Securities Commission of December 28th,
1998, hereby announces the following:



On July 12th, 2000, 'Terra Mobile, S.A' - a company in which 'Telefonica
Moviles, S.A.' (a wholly-owned 'Telefonica, S.A' subsidiary) holds a 51% stake,
and 'Terra Networks, S.A.' (in which the majority stake is held by Telefonica,
S.A.) holds a 49% stake - signed a contract for the acquisition of all the
shares of the Finnish company IOBOX OY, responsible for the technological
development and provision of Internet services for mobiles. The cost of this
operation amounts to euros 230 million, although this figure may vary in
accordance with the number of employees that continue with the company over the
next 30 months.

This outcome of this operation depended on whether the IOBOX OY employees
accepted, within a 10 day period dating from the day of notification, a new
incentive scheme by which they are entitled to the subscription rights on shares
that will replace those existing.

As this period has now concluded, and all the IOBOX OY employees involved have
accepted the offer, the acquisition operation has been executed.