Sale of 3G Mobile

Telefonica SA
24 December 2003

PRESS RELEASE






TELEFONICA MOVILES AND MOBILKOM AUSTRIA REACH AGREEMENT ON THE SALE OF 3G
MOBILE


  • Transaction marks first transfer of UMTS spectrum in Europe.


Vienna, 23 December 2003.- Telefonica Moviles and mobilkom austria have reached
an agreement by which mobilkom austria has acquired 3G Mobile Telecommunications
GmbH, the Austrian affiliate of Telefonica Moviles and owner of a UMTS mobile
telephony license.


The transaction marks the first sale of UMTS spectrum in Europe and as such
could point the way to future agreements between operators.


The sale has already received the approval of RTR GmbH, the Austrian regulator.
In accordance with Austrian legislation, mobilkom austria has agreed to sell
part of the 9.8 MHz. spectrum before 31 January 2005. As a result, mobilkom
austria will in the long term have at least 14.8 MHz. of UMTS-spectrum, enabling
it to have an efficient and cost-effective UMTS network whose beneficiaries will
be the Austrian mobile phone users.


Following its acquisition, 3G Mobile will continue to function as a
self-contained unit of mobilkom austria, which as owner will assume all of 3G
Mobile's obligations arising from ownership of the UMTS license.


Telefonica Moviles obtained a UMTS license in Austria in the auction process
held by the Austrian government in November, 2000. Subsequently, in July 2002,
Telefonica Moviles announced the decision to redefine its operations in Austria,
given the delay in the availability of UMTS technology. In parallel, the company
carried out a complete writedown of the assets of 3G Mobile and provisioned for
its restructuring costs.


About Telefonica Moviles

Telefonica Moviles, which manages all the cellular telephony assets of the
Telefonica Group, is the world's fifth-largest mobile operator in terms of
managed clients, with more than 50 million active customers worldwide. It is a
leader in the growing markets of Spain and Latin America, and also has
operations in the Mediterranean Basin. Telefonica Moviles shares trade on the
Spanish stock markets and on the New York Stock Exchange, under the symbol TEM.


About mobilkom austria

mobilkom austria, the leading mobile network operator of Austria, was founded in
1996, and since then has remained Telekom Austria Group's most successful
venture.

In the third quarter of 2003, mobilkom austria group counted more than 4.6
million customers and 3655 employees - bringing in revenue of 537.1 million EUR.
In the third quarter of 2003 also saw a EBITDA increase to 208.0 million EUR.
mobilkom austria has passed another milestone - Europe's first national UMTS
network was launched on September 25, 2002 and the customer launch of the third
generation started on April 25, 2003.


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