Binding bid for Cesky Telecom

Telefonica SA
31 March 2005



                            ANTONIO J. ALONSO UREBA

                          Director, General Secretary
                    and Secretary to the Board of Directors

                              TELEFONICA, S.A.



Telefonica S.A., as provided in article 82 of the Spanish Securities Market Act
(Ley del Mercado de Valores), hereby reports the following



                                SIGNIFICANT EVENT


As part of the privatisation process for the listed Czech company Cesky Telecom
a.s., Telefonica S.A. submitted a binding bid to purchase 51.1% of the equity in
this company on 29 March. The bid price submitted by Telefonica S.A. is 502
Czech korunas per share, representing a total value of 2,745.87 million euro for
51.1% of the share capital of Cesky Telecom a.s.


Information issued yesterday by the Privatisation Committee formed for this
process included a non-binding recommendation to the government of the Czech
Republic in the light of bids submitted. In accordance with this information,
the Privatisation Committee has proposed that the bid of Telefonica S.A. be
declared winner of the tender, through which the privatisation is being
conducted.



Telefonica S.A. is awaiting the final decision to be adopted in this respect by
the government of the Czech Republic.





Madrid, March 31st, 2005.








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