Acquisition

Telefonica SA
1 February 2001


Telefonica, S.A, in accordance with that set forth in article 82 of the Stock
Market Law hereby announce the following to the National Spanish Securities
Commission (CNMV).

                             SIGNIFICANT EVENT

In accordance with our announcement of June 5th 2000, we would like to confirm
that Telefonica S.A. has today signed an agreement with the German company
Bertelsmann AG by which the former has acquired the German company 'mediaWays
GmbH Internet-Services',

This entity provides internet, data transmission and other value added services
to companies, and therefore Telefonica intends to make mediaWays a platform for
the development of Telefonica Data S.A. throughout Europe.

The final price of this acquisition will be that that results from the
application of the adjustment mechanism in accordance with the revenue
registered by mediaWays for fiscal 2000, as stated by the two parties in the
aforementioned agreement.

'Telefonica S,A.' is, as always, at the entire disposal of the Spanish National
Securities Market Commission in order to provide any clarification or additional
information that should be requested.

Madrid, January 31st, 2001