Redemption of Bonds

Telefonica SA
24 July 2001



A SIGNIFICANT EVENT

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

On September 18th of this year, and in compliance with the conditions stated in
the Prospectus for the Bond Issue 'September 1991 D' (ISIN code number
ES0278430824), registered with the Spanish National Securities Commission on
August 20th, 1991, the 337,749 bonds of the issue will be totally redeemed
through the repayment of the 265.543% of their nominal value of Ptas 100,000
each.

Madrid, July 23rd. 2001