Result of Meeting

Telefonica SA
5 March 2002




                              PRIOR COMMUNICATION


Joaquin de Fuentes Bardaji, holder of identity card no. 50.407.969 - L, acting
on behalf of TELEFONICA, S.A. (hereinafter the 'Company' or 'Telefonica') in his
capacity as Vice -Secretary of the Board of Directors, hereby declares before
the Spanish National Securities Commission:


 I. That the Company's General Ordinary Shareholders' Meeting held on June 15th ,
    2001 resolved to increase the share capital of the Company to be charged to
    freely disposable reserves, through the issue of new ordinary shares of the
    same series and carrying the same rights as those currently outstanding, of
    a nominal value of one (1) euro each, represented by book entries, and for
    an amount equivalent to 2 % of the share capital of the Company subscribed
    and paid-in at the time of the beginning of the free allotment period of the
    new shares.

    The General Ordinary Shareholders' Meeting also resolved to delegate to the
    Board of Directors the power (which in turn may be sub- delegated in whole
    or in part to its Standing Committee and/or in any of the Director with
    delegated powers) to set the dates on which the aforementioned capital
    increases may be executed and to specify the conditions for the capital
    increases that have not been provided for in the Meeting.


II. That, under said authorization, the Company's Board of Directors, at its
    meeting held on January 30th, 2002 resolved to delegate to its Standing
    Committee the aforementioned power


III. That the Standing Committee of the Board of Directors, at its meeting held
    on February 13th, 2002, resolved to execute the resolution referred to in
    the previous paragraph and set the amount for the capital increase at Euros
    95,307,084, through the issue of 95,307,084 ordinary shares, of the same
    series and carrying the same rights as those currently outstanding, of a
    nominal value of one (1) euro each and represented by book entries.


IV. That, by means of this document, and by virtue of that stated in article 26
    of the Stock Market Law 24/1988 of July 28 (modified by Law 37/1998 of
    November 16), and articles 5.2.a), 8.1 and 9 of Royal Decree 291/1992 of
    March 27, regarding Issues and Public Sale Offers of Securities (modified by
    Royal Decree 2590/1998, December 7), the mandatory Prior Communication
    regarding the increase in the Company's share capital is presented, and the
    main characteristics of this are stated below:


1.Issuer


The issuer of the shares derived from the aforementioned capital increase is
TELEFONICA S.A., with its registered head office in Madrid, Gran Via 28 and
C.I.F. A-28/015865, registered in the Madrid Mercantile Register, volume 12,534,
sheet 21, section 8 of the book of Companies, page M-6164, registering 1359.

2.Nature and characteristics of the securities to be issued and the amount of
the issue


The securities issued in the capital increase are ordinary Telefonica shares,
with a nominal value of one Euro each, of the same series, and with the same
rights as those Telefonica shares currently outstanding, and represented by book
entries.


The new shares issued by virtue of this capital increase will entitle holders to
receive the entire amount of the dividends distributed from the issue date,
including, therefore, those to be charged to fiscal 2001.


The capital increase will be entirely charged to the Company's freely disposable
reserves, in the ratio of one (1) new share for every fifty (50) Company shares
currently outstanding, and this increase will be based on the balance duly
audited by the Company's auditors for the year ended December 31, 2000.


The number of shares derived from the capital increase (95,307,084 shares) will
be equal to 2% of the Company 's subscribed and paid- in capital stock at the
time of the beginning of the free allotment period of the new shares, as
established in the Shareholders Meeting 's resolution referred to in Point I.
The shares will be issued at par, that is with an issue price of one (1) euro
per share.


The Company will apply for the listing of these shares on the four Spanish Stock
Exchanges and in the Spanish Automated Quotation System (Mercado Continuo), as
well as their listing on the foreign securities exchanges where the Company's
outstanding shares are already listed and their inclusion in the Stock Exchange
Automated Quotation System (SEAQ International), subject to the regulations
governing said stock markets.


3.Group of subscribers to whom the issue will be offered


All those Company shareholders who, at the end of the working day previous to
the beginning of the free allocation period referred to below, were registered
as such, will be entitled to receive one (1) new share for every fifty (50) old
ones held. The free allocation rights will be transferable during this period
under the same conditions as the shares from which they derive.


For the purposes of that stated in the previous paragraph, every natural or
legal person, who, at the end of the aforementioned day, is registered as a
holder of the Company's shares at the registries of the member-entities of the
Spanish Settlement and Clearance Service (SCLV) will be considered a Telefonica
shareholder.


4.Allocation procedure


The free allocation rights may be exercised during a fifteen-day period which
will begin on the working day subsequent to the publication of the announcement
of the capital increase in the Official Gazette of the Mercantile Register.


As the share capital increase is charged to reserves, no disbursement will need
to be made by the holders of free allocation rights.


5.Entities participating in the issue


All the member-entities of the SCLV, in the course of their normal activity,
will participate in the allocation of the shares from this capital increase.


6.The Issue's Prospectus


Telefonica shall present the corresponding abridged Prospectus on the Issue
corresponding to this capital increase, in order for this to be verified and
registered by the Spanish National Securities Commission, in accordance with
that stated in article 5.2.d) of Royal Decree 291/1992.






In witness thereof,


IT IS REQUESTED that the Spanish National Securities Commission (Comision
Nacional del Mercado de Valores) on acknowledging the filing of this Prior
Communication relative to the capital increase on reserves, admits it and, after
having completed the required formalities, proceeds to register it in the
appropriate Registry.


Madrid, March 4, 2002






TELEFONICA, S.A.

p.p.








Mr. Joaquin de Fuentes Bardaji

Vice -Secretary of the Board of Directors






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