Board's resolutions

Telefonica SA
25 July 2002


                               Significant Event


                                                           Madrid, July 24, 2002


In accordance with that stated in Article 82 of the Spanish Stock Market
Law 24/1988, of July 29th, and regulations thereunder and for public disclosure
as a Significant Event, we notify you that the Board of Directors of
TELEFONICA S.A. in a meeting held today has adopted, among others, the
following resolutions:


First-To acknowledge and express its consent with the resolutions adopted by the
Board of Directors of TELEFONICA MOVILES, S.A. to:


  • Review the strategy of Grupo Telefonica Moviles Group in Germany, Austria,
    Italy and Switzerland.

  • Suspend the commercial activity in Germany of the German operator Group
    3GUMTS GmbH in light of the current situation and of its results as operator
    of the mobile virtual network of GSM/GPRS during fiscal year 2002.

  • Review the value reflected in the balance sheet of the investments made by
    the Grupo Telefonica Moviles Group in Germany, Austria, Italy and
    Switzerland.


These resolutions were the subject of a Significant Event filed by TELEFONICA
MOVILES, S.A..


Second-To acknowledge and approve the resolution adopted by the Board of
Directors of TELEFONICA DATA CORP S.A. Unipersonal that, after the analysis
of the macroeconomic environment in Germany, the regulatory and contractual
changes which have occurred, and the review of the business plan, proposes an
extraordinary amortization provision for the loss in value of the investment in
MEDIAWAYS, GmbH of 530 Million Euros.


As a result of the aforementioned decisions, the financial results of
TELEFONICA S.A. and of their Consolidated Group for the first half of 2002
which are being filed with the CNMV today, reflect extraordinary provisions in
the amount of 4,837 million Euros, resulting from the changes in value of the
investments in UMTS in Europe, excluding Spain, and in an amount of 530 million
Euros, resulting from the extraordinary amortization provision in the investment
in MEDIAWAYS, GmbH.


Third-To reestablish the payment of cash dividends to shareholders. To that end,
the Board, within the framework and conditions legally established, will propose
to the General Shareholders Meeting to be held in fiscal year 2003, the adoption
of the corresponding resolutions.


Fourth-To propose to the General Shareholders Meeting the adoption of the
necessary resolutions for the amortization retirement of a number of shares of
the Company that represent up to 2% of the shareholders equityissued share
capital of the Company.


Fifth-To approve the reorganization of the 'Alta Direccion' Senior Management of
the Group which is reflected in the organizational chart that is available at
Telefonica's internet website (www.telefonica.com)


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