sale closing - 51.1% Cesky

Telefonica SA
16 June 2005




Further to the report registered on June 10th, 2005 under RNS No. 4581N,
Telefonica S.A., as provided in article 82 of the Spanish Securities Market Act
(Ley del Mercado de Valores), hereby reports the following



                               SIGNIFICANT EVENT


After having obtained the required authorisation of the European Commission on
June 10th, 2005, Telefonica. S.A. and the National Property Fund, the Czech
Republic's privatisation entity, have today closed the sale of 51.1% of the
telecommunications operator Cesky Telecom. The price for the acquisition of
51.1% of the operator's capital stands at EUR 2,746 million, as expected.


The acquisition of Cesky Telecom further develops Telefonica's strategy of
organic growth complemented with selective acquisitions with strong positions in
their respective markets. Cesky Telecom is the leading operator in fixed and
mobile services in the Czech Republic, with an edge over its competitors thanks
to being the sole integrated operator in its market. In March 2005, the company
operated 9 million of accesses.


In accordance with Czech legislation, within 60 days from today, Telefonica will
launch a tender offer for the remaining share of the capital stock, i.e. for up
to 48.9%. The terms of the tender offer will be published after approval by the
Czech authorities.




Madrid, June 16th, 2005




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