Further Re Share Split

TELEFONICA SA

                               TELEFONICA, S.A.

                       Modification of outstanding shares


The Board of Directors of 'Telefonica, S.A.' resolved to execute the resolutions
approved by the Annual General Shareholders' Meeting of March 26th, 1999,
regarding the split of the shares that make up the Company's share capital,
through the division of each share into three and the adjustment of their face
value to the nearest Euro cent, in compliance with the law on the introduction
of the Euro. This adjustment will result in a corresponding reduction in the
share capital and the amount of this reduction will be credited to a restricted
reserve account with the subsequent changes made to article 5 of the Company's
bylaws regarding the figure for the share capital and the face value of the
shares into which it is divided. This operation will come into effect at twelve
midnight, of July 23rd, 1999.

Each of the 1,066,282,967 shares that constitute Telefonica's share capital
with a face value of Euros 3.005060, will be divided into three, thereby
reducing the face value of each of the new split shares to Euros 1.001686, with
no change in the figure for the Company's share capital. Therefore, the existing
1,066,282,967 outstanding shares will be replaced by 3,198,848,901 new shares,
each with a face value of Euros 1.001686. Each shareholder, who is registered
as such, at twelve midnight of July 23rd, 1999, will be entitled to three new
split shares for every old one.

At the same time, and also from twelve midnight of July 23rd, 1999, the face
value of each of the 3,198,848,901 new shares will be adjusted to the nearest
Euro cent, in such a way that each of the aforementioned shares will have a face
value of one Euro. As a consequence, the Company's share capital will be reduced
by Euros 5,395,937.42 which will be credited to a special restricted reserve
account and the figure for the Company's share capital will therefore stand at
Euros 3,198,848,901.

It is foreseen that the 3,198,848,901 new 'Telefonica, S.A.' shares deriving
from the aforementioned operations, with a face value of one Euro each, will
begin trading on the four Spanish Stock Exchanges, through the Automated
Quotation System, at the opening of trading of Monday, July 26th, 1999.

Finally, these new 'Telefonica S.A.' shares have been given the ISIN code 
ES 0178430E18 by the National Securities Coding Agency.


                                                         Madrid, July 15, 1999

Jose Maria Mas Millet             SECRETARY GENERAL and SECRETARY of the BOARD