arbitration proceedings costs

Telefonica SA
04 August 2006




TELEFONICA, S.A. hereby submits the following


                                     NOTICE


Antena 3 de Television, S.A. and the Telefonica Group have reached an agreement
regarding the interpretation of the contract whereby the latter sold 100% of
Uniprex, S.A. in 2002 in relation to the distribution between them of the costs
arising from the arbitration-ordered termination of the collaboration agreement
between Grupo Radio Blanca and Uniprex, S.A.

According to the agreement, Telefonica assumes 30% of the costs of the
arbitration proceedings for the Antena 3 de Television Group, which mainly
consists of the amounts paid to the Grupo Radio Blanca as a result of the
arbitration.

As a consequence of the said agreement, Telefonica, S.A. and Grupo Planeta-De
Agostini, S.L. (as successor of KORT Geding, S.L. and main shareholder of Antena
3 de Television, S.A.) have agreed in view of the economic costs caused by the
aforesaid arbitration proceedings, the amount of the price adjustment to be
applied in favour of Planeta- De Agostini under the Antena 3 de Television, S.A.
share sale-purchase agreement signed by the two companies on May 21st, 2003 will
be reduced from the 25.1% initially stipulated to 17.5% of the costs.



Madrid, August 3rd, 2006




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