Re Agreement

Telefonica SA
9 April 2001


'TELEFONICA, S.A.', in accordance with that stated in article 82 of the Spanish
Stock Market Law, hereby announces the following.

                                SIGNIFICANT EVENT

TELEFONICA, S.A. and IBERDROLA, S.A. have reached an agreement by which, once
the necessary authorizations have been granted, TELEFONICA, S.A. will acquire
all the share participations held by the IBERDROLA group in the Brazilian
operators in which  both groups are shareholders. The share exchange ratios
foreseen are as follows: 

a)  In exchange for all the shares held by IBERDROLA INVESTIMENTOS, SOCIEDADE 
UNIPESSOAL, LDA., representing 3.48 per cent of the total share capital of SP
TELECOMUNICACOES HOLDING, S.A. (the holding that controls TELECOMUNICACOES DE
SAO PAULO, S.A. -TELESP-), 6,638,157 TELEFONICA, S.A. shares will be given.

b)  In exchange for all the shares held by IBERDROLA INVESTIMENTOS, SOCIEDADE
UNIPESSOAL, LDA, representing 7 per cent of the total share capital of TBS 
CELULAR PARTICIPACOES, S.A. (the holding that controls CELULAR CRT PARTICIPACOES
S.A.), 1,493,902 TELEFONICA S.A. shares will be given.

c)  In exchange for all the shares held by IBERDROLA INVESTIMENTOS, SOCIEDADE 
UNIPESSOAL, LDA., representing 7 per cent of the total share capital of 
SUDESTECEL PARTIPACOES, S.A.(the holding that controls TELE SUDESTE CELULAR
PARTICIPACOES, S.A.), and the 104 ordinary shares and 6 preference shares held
by TELESUDESTE CELULAR PARTICIPACOES, SA, 3,693,775 TELEFONICA, S,A.  shares
will be given.

d)  In exchange for all the shares held by IBERDROLA INVESTIMENTOS, SOCIEDADE
UNIPESSOAL, LDA, representing 62.02 per cent of the total share capital of
IBEROLESTE PAPTICIPACOES, S.A.(the holding that controls TELE LESTE CELULAR
PARTICIPACOES, S.A.), 6,526,736 TELEFONICA, S.A. shares will be given.
   

e)  In exchange for all the shares held by IBERDROLA ENERGIA, S.A., representing
0,74 per cent of the total share capital of TELE LESTE CELULAR PARTIPACOES,
S.A., 171,587 TELEFONICA, S.A. shares will be given.

f)  In exchange for all the shares held by IBERDROLA ENERGIA DO BRASIL, LTDA., 
representing 2.64 per cent of the total share capital of TELE LESTE CELULAR
PARTICIPACOES, S.A., 612,149 TELEFONICA, S.A. shares will be given.

   The total number of shares from TELEFONICA, S.A.'s treasury stock to be given
to the IBERDROLA Group stands at 19,136,307, representing an approximate amount
of US$ 313 million.

   Regarding the share participation held by IBERDROLA ENERGIA, S.A. in
CELULAR CRT PARTICIPACOES, S.A., representing 0.66 per cent of this same   
company's total share capital, this will be offered in the Public Offering     
already announced by TELEFONICA MOVILES, S.A.

   This operation comes within TELEFONICA, S.A.'s strategy of raising its share
participation in those operators it already controls, with the intention of
attributing these assets to its business lines.