Approval of Exchange Offering

Telefonica SA
19 May 2000

THE SEC APPROVES TELEFONICA, S.A.'s EXCHANGE OFFERING OF ITS LATIN AMERICAN
SUBSIDIARIES

The Securities and Exchange Commission (SEC) has today approved the Public
Exchange Offering for all the shares not yet held in its four Latin American
subsidiaries, Telesp and Tele Sudeste Celular de Brasil, Telefonica de Argentina
and Telefonica del Peru.

This exchange offer, once concluded, will permit the segregation of activities
into global business lines, and pave the way for other previously announced
operations, such as the acquisition by Telefonica of the Dutch production
company Endemol, and Terra's recent acquisition of the North American internet
portal Lycos.

The launching of this exchange offering was announced on January 12th of this
year, and ratified by the Extraordinary Shareholders' Meeting of February 4th.

As this operation has now been approved by the SEC, over the next few days the
share exchange period will commence and it expected to close at the end of June.