Consortium

Telefonica SA
4 September 2000


      TELEFONICA PRESENTS ITS OFFER FOR THE SWEDISH UMTS CONTEST

Telefonica and its partner Sonera have formed a consortium with the Swedish
group Industri Kapital.

Madrid, September 1 - Telefonica and Sonera have formed the consortium, Reach
Out Mobile, with  the Swedish investment fund Industri Kapital, in order to
participate in the awarding process for the UMTS licences in Sweden.  The
consortium's stake breakdown is as follows:

          Sonera Corporation               45%
          Telefonica Intercontinental      20%
          Industri Kapital                 35%

Reach Out Mobile has today presented its application to participate in the
Swedish government's awarding process for a third generation mobile telephony
licence.

In November, the Swedish government awarded, in one single process, four third
generation mobile telephony licences, based on the tenders presented for the
'Beauty Contest'.  The four most aggressive projects for the development of  the
UMTS network will be the ones that will be granted the licences. Today  marks
the deadline for the presentation of the tenders. A nominal fee of Euros 12,000
(two million pesetas) will be charged for each licence. The Company is  ready to
construct a UMTS network offering extensive coverage throughout Sweden before
the end of 2003.

Sweden is one of the world's leading countries in terms of both mobile
communications and Internet. Mobile penetration stands at around 65% and three
operators are currently providing second generation mobile telephony services.

The 3G group, made up of Telefonica (57.4%) and Sonera (42.6%) have recently
been awarded a third generation licence in Germany. Telefonica already holds a
UMTS licence in Spain and has stated its intention to participate in Ipse 2000
consortium in Italy and with Suez Lyonnaise Des Eaux in France, Telefonica and
Sonera have also joined forces with the Australian company One.Tel having
presented the pre-inscription for the bidding process to be held for the Swiss
third generation licences at the end of this year. Thus, Telefonica ranks as
one of the leading mobile telephony companies in Europe.

For further Information

Press Office                         Tel: [phone]
Gran Via, 28 - 3 Planta              Tel: [phone]
28013 - MADRID                       e-mail: [e-mail]