Launch of Zeleris

Telefonica SA
27 June 2000


TELEFONICA LAUNCHES ZELERIS, THE FIRST GLOBAL COMPANY IN THE MANAGEMENT AND
DEVELOPMENT OF E-COMMERCE IN THE PORTUGUESE AND SPANISH SPEAKING WORLD

-  Zeleris will play a role in the provision of global solutions at all the
   stages of e-commerce, supported by a solid network of local and 
   international alliances, and using an advanced technological platform.

-  Zeleris, with its head offices in Barcelona, has been created to become the  
  leader of the sector responsible for the co-ordinating the activities of      
 portals, suppliers, remote channels and fulfillment companies, storage and     
logistics at both a national and international level.

-  With an investment of Ptas 5,500 million over the first three years, the     
  Telefonica subsidiary will launch its activities in Spain and Brazil, where   
 it will begin operating in August by the end of this year in Chile,            
Argentina and Mexico.

-  The aim is to have gained presence in 15 countries by the end of 2001, and   
  to have taken on 500 employees.

-  Zeleris intends to reach register revenues of Ptas 70,000 million by 2003.

-  This new company will mean improved levels of service quality, and reliable  
  and guaranteed processing, as well as savings in cost and time.

-  Rafael Hernandez will be the Chairman of Zeleris, and Juan Rovira will act   
  as Managing Director and Hugo Mendoza as General Manager.

Telefonica launches Zeleris, the first e-fulfillment company in the Spanish and
Portuguese speaking world, providing integral solutions for all the stages of
e-commerce.  In order to achieve this, an advanced manageable and flexible
technological platform is currently being developed, and the creation of a
network of local and international alliances is already underway, aimed at
providing efficient e-commerce.

Zeleris has been created to represent an integral solution, which guarantees the
formation of a network to provide a marketplace for efficient and transparent
e-commerce.  With this in mind, this Telefonica subsidiary intends to offer
integral processing using a network that covers all the stages of 
e-commerce, ranging from customer analysis and the receiving of orders, to the
handling and distribution of merchandise, as well as the inventory analysis, the
processing of orders and payment transactions.

Zeleris aims to address the demands not only of large corporations but also of
medium and small size companies, that wish to launch into e-commerce at any
stage of the process.  Zeleris will offer medium and small size companies the
opportunity to access e-commerce through the Group's different portals and
remote channels (Terra, TPI, and Atento, among others) as well as continuing to
offer all its other services.

Likewise, Zeleris will provide its customers with value added services, such as
on-line information regarding purchases and billing, among others.  It will also
offer guaranteed and reliable services and processing, along with savings in
cost and time.

Zeleris will offer logistic and distribution portals using the most advanced
technological platform in Internet and a complete network of local and
international alliances.  Zeleris' proposal is that of providing an integral
solution that enhances the potential of e-commerce through one single contact
and which offers - with the back up of Telefonica - a reliable service, advanced
technological solutions and wide goegraphic coverage.

In order to develop its activity, Zeleris has signed an agreement of extremely
significant strategic importance with Oracle (a world leader in the sector of
processing software), to act as its technological partner in the development of
the technological platform.  Zeleris also intends to reach strategic alliances
at both national and international levels, particularly with partners involved
in transport, storage and fulfillment, as well as suppliers of system
integration technology and companies that provide financial services.

Bearing in mind that by the year 2003 the revenue derived from the management,
logistics and fulfillment of e-commerce will stand at around Ptas one billion,
Zeleris foresees that its revenue will reach approximately Ptas 70,000 million
by this same year.  The new company intends to make an initial investment of
Ptas 5,500 million over the first three years.

Zeleris, with its head offices in Barcelona, has been created to become the
world leader in the Spanish and Portuguese e-fulfillment market.  After
launching its operations in Spain and Brazil, which is to take place in August
of this year, Zeleris will extend its activities to Chile in September, and
Argentina and Mexico by the end of this year.  The company aims to be present in
15 different countries by the end of 2001, including the US, Colombia, Peru,
Venezuela, Central America, France, Italy, Portugal and Morocco.  Zeleris
intends to take on 500 employees throughout the course of this year.

Zeleris has been incorporated with an aim to becoming a leader in the world of
e-commerce, and will be a vital tool for any company that wishes to adapt its
business to the new technologies.  As a consequence of this new business line,
Telefonica has completed its presence in all the sectors of Internet and the New
Economy.

Through Zeleris, Telefonica has completed its participation in the value chain
of e-commerce.

Once again Telefonica is one step ahead of its customers' needs, offering them
new alternatives to enhance their businesses.  Zeleris will be the vehicle that
guarantees the participation of any company in e-commerce, regardless of its
size and location.

Rafael Hernandez will be the Chairman of this new company, and Juan Rovira will
take up the position of Managing Director and Hugo Mendoza will act as General
Manager.

Telefonica is today the leading telecommunications operator throughout the
Spanish and Portuguese speaking world, and Spain's most important company, both
in terms of income and market value.  It also ranks among the world's foremost
telecoms.  Through its subsidiaries in Latin America, Europe and the US,
Telefonica provides services in 24 countries, with a potential market of over
550 million customers.  To be precise, Telefonica is present in Spain, Portugal,
Italy, Austria, Morocco, the UK, Mexico, the US, Guatemala, Colombia, Peru,
Chile, Argentina, Brazil, Venezuela, Puerto Rico and El Salvador, among others.

Madrid, June 27th, 2000