Re Licence Auction

Telefonica SA
14 September 2000


                TELEFONICA PARTICIPATES IN THE PREQUALIFICATION
               PROCESS FOR THE AWARD OF UMTS LICENSES IN AUSTRIA

Madrid, 13 September, 2000 - Telefonica, through Telefonica Intercontinental,
has presented the documentation required to participate in the bidding process
convened by the Austrian government for the award of 17 blocks of frequency for
UMTS licenses.

The process will be implemented in two phases:

*  An initial pre-qualification phase, ending today, consisting of the          
   presentation of the technical, legal and financial documentation necessary   
   to accredit the candidate's ability to fulfil the requirements under the     
   terms of the competitive bidding process.

*  A second phase, consisting of an auction, is foreseen to start by the end of 
   November.


Between 4 and 6 licenses are expected to be awarded, depending on the result of
the auction of frequency blocks.

Telefonica Moviles is studying different alternatives in order to form a
consortium with international and/or local partners.

In August, Telefonica was awarded a UMTS license in Germany, Australia's
neighboring market, as a partner in the 3G Group consortium, participating
together with Sonera. Telefonica has had a presence in Austria since February
1999 through European Telecom, an Telefonica Data subsidiary, providing voice
and data service oriented towards small and medium-sized Austrian enterprises.