Change to Board of Directors

Telefonica SA
26 July 2000

CESAR ALIERTA APPOINTED CHAIRMAN OF TELEFONICA

Madrid, 26 July, 2000 - The Board of Directors of Telefonica and Juan Villalonga
today announced that, in accordance with their commitment to act in favour of
the company and its shareholders, the appropriate time has come for a change in
the company leadership.  Responding to a proposal by Juan Villalonga, the Board
of Directors has appointed Cesar Alierta as its new chairman.  The nomination
was approved unanimously.

Juan Villalonga said: 'In the course of our conversations about the best way to
create value for the entire company - shareholders, customers and employees - we
have agreed that now, with the development of several strategic initiatives
which have been a great success, the time has come for a change in the
chairmanship of Telefonica.  I'm delighted that Cesar Alierta, a very successful
and experienced executive, has agreed to become Chairman of this great company. 
Cesar is an active and valued member of the boards of directors of Telefonica
and Terra, so his appointment assures continuity in management.  Furthermore, I
am confident that Telefonica will continue to develop its business strategy,
that the company will continue to grow and that it will achieve its primary goal
of creating shareholder value.'

The Board of Directors expressed its appreciation to Juan Villalonga for his
extraordinary success in creating value for Telefonica shareholders over the
past four years.  At the same time, the Board warmly congratulated Cesar Alierta
for his designation as chairman, with the conviction that under his leadership,
Telefonica will continue being one of the best-managed, most dynamic and most
successful independent companies in the world.

For his part, the new chairman of Telefonica, Cesar Alierta, expressed his
gratitude for the confidence placed in him and the conviction that he will enjoy
the full support of the Board of Directors during the promising period which is
opening for Telefonica.  Likewise, he asked for the support of the executive
team and the employees of Telefonica, whose great competence he already knows,
to continue developing Telefonica's business project with force.

The new chairman of Telefonica said: 'It's a great opportunity and a great
challenge to lead Telefonica as Chairman of the Board.  During the last four
years, Telefonica has become one of the world's great telecommunications
companies.  My goal will be to continue creating value for shareholders and to
bring the company to the greatest possible heights.'

The Board of Directors reaffirmed the company's commitment to carry out all the
strategic operations which are pending.

Telefonica, S.A. (1999 revenues: 22.9 billion euros) is the largest supplier of
telecommunications services in the Spanish- and Portuguese-speaking world. 
Through affiliate companies in Latin America, Europe, Africa and the United
States, the Group reaches a potential market of more than 550 million customers
in 24 countries, with services ranging from fixed and mobile telephony to
Internet, data transmission, call centers and broadcast media.

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