Dividend Distribution

Telefonica SA
11 October 2007











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



RELEVANT FACT





            TELEFONICA, at its Sixth Investor Conference to be held today in
London, will announce a proposal to distribute a dividend of (1) euro per share
corresponding to 2008 fiscal year, for which purpose the adoption of the
corresponding corporate resolutions will be proposed. This dividend will be
payable in two tranches: the first one in the second half of 2008, and the
second one in the first half of 2009.



Therefore, the Company brings forward the commitment announced in May 2006 to
double the dividend per share for 2009.





Madrid, October 11th, 2007.


























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