Final cash dividend

Telefonica SA
10 May 2007



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

Pursuant to the resolution adopted by the shareholders of TELEFONICA, S.A. at
their Annual General Meeting held today, we hereby inform all shareholders that
on May 17th, 2007, the Company will pay a final cash dividend from 2006 net
income of a fixed gross amount of 0.30 euros for each Company share issued, in
circulation and carrying entitlement to this dividend (Record Date: Wednesday,
May 16th, 2007). This payment, in accordance with the applicable tax
legislation, will be made as follows:



        Gross dividend          Withholding tax rate (18%)       Net dividend
       (Euros per share)             (Euros per share)         (Euros per share)                             

             0.30                         0.054                      0.246


The payment of this dividend shall be executed from May 17th, 2007, by Banco
Bilbao Vizcaya Argentaria, S.A., through the participating entities in Iberclear
(Sociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion de
Valores, S.A.), the Spanish securities registrar, clearing and settlement
company.



Madrid, May 10th, 2007



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