Share buyback commitment

Telefonica SA
01 March 2004

                            ANTONIO J. ALONSO UREBA

                          Director, General Secretary

                    and Secretary to the Board of Directors

                              TELEFONICA, S.A.


Telefonica S.A., as provided in article 82 of the Spanish Stock Market Act (Ley
del Mercado de Valores), hereby reports the following


                               SIGNIFICANT EVENT


In the presentation made to analysts and investors on February 27th, 2004,
regarding results for the financial year 2003, the company reported on the
current situation relating to its commitment to conduct a share buyback, in
accordance with terms released to the market in a Significant Event of October
10th, 2003, for a minimum value of 4 billion euro in the period from 2003 to
2006.


On December 31st, 2003, Telefonica held 40.5 million own shares as treasury
stock, as well as a number of call options on company stock, expiring in the
middle of 2004, giving it the right to purchase a further 33 million shares. In
the event these options were exercised, at the end of 2003 the company would
have had in total the equivalent of 73.5 million own shares, representing 1.5%
of company stock existing on that date. This would equal having fulfilled
approximately 20% of the abovementioned share buyback commitment.


In accordance with this information, changes in company treasury stock are
presented in the following table:



          Date               Shares (purchased and held on      Shares (based on stock options), in     % of stock   
                                  deposit), in millions                        millions                (total shares) 
     June 30th, 2003                      17.6                                    -                         0.4%      
  September 30th, 2003                    25.6                                    -                         0.5%      
   December 31st, 2003                    40.5                                   33.0                       1.5%      
   February 20th, 2004                    50.0                                   33.0                       1.7%      
Madrid, March 1st, 2004.





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