Agreement Signed - Amendment

Telefonica SA
1 August 2000


                        A SIGNIFICANT EVENT


The issuer has made the following amendment to the announcement Telefonica SA -
Agreement Signed released 1 August 2000 at 12:07 under RNS No 7747O.

The figure stated in the third paragraph should read $US 800 million and not $US
800 thousand million as previously stated.

All other details remain unchanged.

The full corrected version is shown below.
-------------------------------------------------------------------

Telefonica, S.A., 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:

In compliance with the divestiture obligation imposed by the Brazilian regulator
(ANATEL), Telefonica, holding 56.6%, and the remaining TBS Participacoes S.A.
shareholders have today signed the buying and selling agreement by which Brasil
Telecom will acquire all the TBS Participacoes, S.A. shares, this being the
holding company that controls the Companhia Riograndense de Telecommunicacoes,
CRT.

The aforementioned operation will amount to $US 800 million and payment will be
made on August 4th, 2000, once authorization has been granted by ANATEL.

'Telefonica, S.A.' is, as always, at the entire disposal of the Spanish
Securities Commission should any further information be required.

                                               Madrid, July 31st, 2000