Re Joint Venture

Telefonica SA
27 July 2001


                GENERALITAT OF CATALONIA, TELEFONICA MOVILES 
                ESPANA, ERICSSON ESPANA AND HEWLETT-PACKARD 
                COMPANY CREATE JOINT VENTURE TO DEVELOP NEW 
                MOBILE E-SERVICES AND PRODUCTS

The Generalitat of Catalonia, Telefonica Moviles Espana, Ericsson Espana
(through its subsidiary Ericsson Innova) and Hewlett-Packard Company (HP) have
signed a shareholders' agreement for a joint venture to be devoted to developing
and marketing mobile applications and services.

Tempos 21, Innovacion en Aplicaciones Moviles, SA will speed up the availability
and increase the offer of mobile telephone-related products and services to the
end customer and serve as a catalyst and boost the market for applications on
GSM, GPRS and UMTS mobile networks, creating new business opportunities for
companies and new services for customers. It will also serve as a seed bed and a
technology incubator for other initiatives.

The agreement was signed today by die Honourable Counsellor Antoni Subira i
Claus, President of the Executive Council of the Catalonia Office of Foreign
Investment (CIDEM) at the Industry, Trade and Tourism Department of the
Generalitat of Catalonia, Ignacio Aller, Vice-president for Spain, the
Mediterranean Basin and Global Development and Chief Technology Officer at
Telefonica Moviles; Ingemar Naeve, CEO of Ericsson Espana; and Juan Soto,
President and CEO of HP.

Tempos 21, Innovacion en Aplicaciones Moviles, SA will be designed to take
advantage of the synergies derived from the complementary profiles of its
partners in aspects such as technological innovation, market knowledge, product
and services ranges and the facilitation of collaboration agreements. It will
combine the worlds of mobile communication and information technologies with a
wider, more complex range of services adapted to the professional, social and
personal needs of mobile-telephone users.

The project is led by Telefonica Moviles Espana and got under way a few months
ago when draft agreements were signed with Ericsson and HP. The partners have
since then developed the corporate plan, the business model and the rules
relating to the operation of the joint venture,

The new company will be mainly devoted to developing, intergrating and marketing
predominantly in-house applications. This activity will focus on vertical
applications aimed at increasing productivity and efficiency in economic sectors
such as transport, tourism, the automotive industry, telematics, leisure and
entertainment. Horizontal applications will also be developed on a collaborative
basis, along with applications for the consumer market.

The applications will be marketed through the use of licences, although the
joint venture will also carry out tailor-made projects, providing technological
consultancy services and managing the integration of mobile solutions developed
with customers' systems.

It will also offer W-ASP services (the provision of mobile-application services)
for small and medium-sized enterprises and private-label services, mainly for
mobile operators, aggregators and portals. It will be responsible for the
application and provision of consultancy services, the development of integrated
solutions in mobile telephony and the provision of laboratory services, tests
and application, certification.

Tempos 21, Innovacion en Aplicaciones Moviles, SA will be located in the Parque
Tecnologico del Mediterraneo in Castelldefels in the Barcelona region.

The partners' initial stakes in the company are: Telefonica Moviles Espana,
38.5%; Ericsson Innova, 38,5%; Hewlett-Packard, 18%; and the Generalitat de
Catalonia, 5%.

The president of the company will be Miguel Menchen, General Manager of Services
and Platforms at Telefonica Moviles and the vicepresident will be designated by
Ericsson Espana. An independent professional will be elected chief executive,
not a counsellor.

Madrid, July 26, 2001