Re Agreement

Telefonica SA
11 October 2000


LETTER DATED 10 OCTOBER 2000


TELEFONICA,  S.A., in accordance with that stated in article 82 of  the  Spanish
Stock Market Law and that set forth in the Circular Letter 14/1998 of  December
28th, hereby informs the Spanish Securities Commission of the following


                            SIGNIFICANT EVENT

Telefonica and Motorola Inc. have today reached a final agreement for the
acquisition of certain cellular assets pertaining to Motorola. This agreement 
is pending approval by the respective Boards of the two companies.

The assets  to be acquired are the stakes held by Motorola in Mexico (100% 
Norcel, Cedetel and Bajacel, 90% Movitel and 21.7% Portatel), Brazil (36.3% 
Global Telecom), Israel (50% Pelephone), the Dominican Republic (26.5% Tricom) 
and Honduras (25% Celtel).

The figure set for the assets in their entirety amounts to US$ 2,644.5  million,
if payment is made in cash,  and US$ 2,744.5 million if it is made in
Telefonica, SA. shares, with the choice between these two options being left  to
Telefonica's discretion.

The acquisition of the assets is subject to the fulfilling of certain conditions
which include, among others, the receiving of regulatory authorisations, the
exercising of pre emptive acquisition rights (Brazil, Honduras, the Dominican
Republic, Israel and Southern Mexico) and the carrying out of due diligence
processes (Israel, Brazil and Honduras).

'Telefonica S.A.' is, as always, at the entire disposal of the Spanish
Securities Market Commission to provide it with any further information it
should need.


Madrid, October 10th, 2000