Disposal of Airwave O2 Ltd

Telefonica SA
19 April 2007




Pursuant to the Significant Event registered in December 15th, 2006, and as
provided in article 82 of the Spanish Stock Market Act (Ley del Mercado de
Valores), TELEFONICA, S.A. hereby reports the following


SIGNIFICANT EVENT


TELEFONICA O2 EUROPE PLC, a 100% subsidiary of TELEFONICA, S.A., and O2
HOLDINGS LTD, a wholly owned company by TELEFONICA O2 EUROPE PLC, have today
signed a final binding agreement with GUARDIAN DIGITAL COMMUNICATIONS LIMITED, a
company wholly owned by funds managed by the MACQUARIE GROUP, for the disposal
of 100% of AIRWAVE O2 LTD (a subsidiary of O2 HOLDINGS LTD), a leading provider
of communications services and solutions to public safety users in the UK.


The parties have agreed to complete the transaction on 20th April 2007.  The
total value of AIRWAVE O2 LTD (firm value) is 2,982 million Euros(*) (2,015
million British Pounds), generating total net proceeds for O2 HOLDINGS LTD at
completion of 2,860 million Euros(*) (1,932 million British Pounds) after
deducting AIRWAVE O2 LTD's net debt and other liabilities.


Madrid, 18th April, 2007.

(*) Exchange rate € /GBP: 1.48

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