Fthr re Public Tender Offers

Telefonica SA
11 July 2000


                                    TELEFONICA


                              Jose Maria Mas Millet
                                General Secretary
                     and Secretary of the Board of Directors
                                Telefonica, S.A.

TELEFONICA, S.A., in accordance with that stated in article 82 of the Spanish
Stock Market Law and that set forth in the Circular Letter 14/1998 of the
Spanish  Securities  Commission of December 28th, 1998, hereby announces the
following:

                                SIGNIFICANT EVENT

Telefonica has today executed the last of its capital increases approved by  the
Extraordinary Shareholders' Meeting of February 4th, 2000, this being in order
to address  the exchange of the shares of its Latin American subsidiaries on
which Telefonica has launched public tender offers.

The capital increase executed will mean the issue of 80,954,801 new  Telefonica
shares, of a nominal value of 1 euro each, issued with a premium of euros  8.072
per share, to be delivered to shareholders and holders of 'American Depositary
Shares' (ADS) of Telefonica de Peru, S.A. that have accepted the exchange offer.

The  distribution of the shares to the aforementioned share and ADR holders will
be completed over the next few days, once the new shares have been listed on the
Spanish stock exchanges. The shares will also be traded on the New York and Lima
(as ADS), and the other exchanges on which Telefonica shares are listed.

Madrid, July 11th, 2000