Re Agreement

Telefonica SA
5 December 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 informs that, within the framework of the Strategic Alliance 
Agreement made on February 11, 2000 between Banco Bilbao Vizcaya Argentaria, 
S.A. and Telefonica, S.A., both companies have entered into an agreement 
establishing the terms and procedures for integrating the BBVA Group's Spanish 
and international call centre business into Telefonica Group subsidiary Atento.

The deal consists in Telefonica, S.A. spinning off the whole of the call centre 
business to a newly created company (Atento N.V.) and inclusion of the BBVA 
Group in the shareholder base of the new company by means of contributions 
entitling acquisition of up to 9% of the Atento N.V. share capital. These 
contributions will result in transfer to the Atento Group of the entire Spanish 
and international call centre business of the BBVA Group.

In addition; the operation envisages specific contracts for provision of call 
centre services in Spain, Portugal and ten Latin American countries.

Madrid,
December 5. 2001