Competition Court Judgment

Telefonica SA
07 April 2004





                            RAMIRO SANCHEZ DE LERIN

                             Vice-General Secretary

                  and Vice-Secretary to the Board of Directors

                              TELEFONICA, S.A.





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




                               SIGNIFICANT EVENT




Telefonica de Espana, S.A.U., a subsidiary of Telefonica, S.A., has today been
notified of the Judgment of April 1st of the Spanish Competition Court (Tribunal
de Defensa de la Competencia ) in proceedings 557/03 ASTEL (the Spanish
association of telecommunication services operators), for infringement of
Article 6 of the Spanish Competition Law 16/89 (Ley 16/89 de Defensa de la
Competencia) and Article 82 of the EC Treaty finding there to have been
practices in abuse of a dominant position and imposing on it a fine of 57
million euros.


The Company expresses its intention to lodge a contentious-administrative appeal
to the Spanish court 'Audiencia Nacional' against this Judgment on the grounds
that it deems it contrary to the law and, specifically, to the Competition Law
16/89 and to the Spanish Law on the legal provisions governing public
authorities and administrative procedure (Ley 30/92 de Regimen Juridico de las
Administraciones Publicas y Procedimiento Administrativo) amongst others.




Madrid, April 6th, 2004.





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