Increase in Share Capital

Telefonica SA
7 March 2001



Mr Antonio Hornedo Muguiro, Vice Secretary, non member of the Board of
TELEFONICA MOVILES, S.A ('Telefonica Moviles') appears before the Spanish
National Securities Market Commission ('CNMV') and


                                DECLARES


That he submits to CNMV as HECHO RELEVANTE (Significant Event) the following
information regarding the capital increase of the Company.

Telefonica Moviles, S.A. has today executed one of the non-cash contribution
capital increases approved by the Company's General Universal Extraordinary
Shareholders Meeting of October 26th, 2000.

In accordance with the Complete Prospectus and the Abridged Prospectus
registered with the above mentioned Commission on November 2nd, 2000 and March
6th, 2001 respectively, TELEFONICA MOVILES, S.A. has increased its share capital
by Euros 32,969,782 through the issue of 65,939,564 ordinary shares which have
been subscribed by TELEFONICA, S.A.

The total payment for the shares has been made by TELEFONICA, S.A. through the
contribution of TELEFONICA DEL PERU, S.A.A. shares, which will permit TELEFONICA
MOVILES, S.A. to become the holder of Peru's mobile business.

It is requested that all information above be registered with the Spanish
Securities Commission on Madrid, March 7th, 2001.



Antonio Hornedo Muguiro

Vice Secretary non member of
the Board of Telefonica Moviles, S.A.