Interim dividend-net income04

Telefonica SA
04 May 2005

                            ANTONIO J. ALONSO UREBA

                          Director, General Secretary

                    and Secretary to the Board of Directors

                                TELEFONICA, S.A.



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 Board of Directors of Telefonica, S.A.
at its meeting held on February 23rd, 2005, we hereby inform all shareholders
that on May 13th, 2005 the Company will pay an interim dividend from 2004 net
income of a fix gross amount of 0.23 euros for each Company share issued, in
circulation and carrying entitlement to this dividend. This payment, in
accordance with the applicable tax legislation, will be made as follows:

       Gross dividend         Withholding tax rate (15%)       Net dividend
     (Euros per share)            (Euros per share)          (Euros per share)
            0.23                       0.0345                      0.1955


The payment of this dividend shall be executed on the aforesaid date 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 4th, 2005




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