Interim dividend

Telefonica SA
28 February 2006


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

The Board of Directors of TELEFONICA, S.A., at its meeting held today, has
approved to distribute an interim dividend from 2005 net income, of a fix gross
amount of Euro 0.25 for each outstanding share with the right to receive
dividends of the Company.

The payment of this dividend shall be executed on May12th, 2006 through the
participating entities in Iberclear (Sociedad de Gestion de los Sistemas de
Registro, Compensacion y Liquidacion de Valores, S.A.), the Spanish entity in
charge of registration, clearing and settlement of securities. Tax withholding
shall be made on gross amounts as required by applicable legislation.

Likewise, in accordance with the shareholder remuneration policy approved by the
Company's Board of Directors, it is the Board's intention to pay a further
dividend of the same amount per share in the course of this financial year, and
the appropriate resolutions for that purpose will be passed at the relevant
time.


Madrid, February 28th, 2006




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