Stake acquisition in CNC

Telefonica SA
18 January 2008




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


            TELEFONICA, S.A., through its subsidiary TELEFONICA INTERNACIONAL,
S.A.U., has reached today an agreement to acquire an additional stake equal to
approximately 2.22% of the share capital of the Chinese telecommunications
company CHINA NETCOM GROUP CORPORATION (HONG KONG) LIMITED  ('CNC'). The
execution of this acquisition is subject to prior attainment of the necessary
regulatory approvals. After the acquisition, the TELEFONICA group's stake in CNC
would stand at approximately 7.22%.


If completed, the acquisition of the aforementioned stake in the equity in CNC
will involve a total investment of approximately 309 million euros (depending on
the exchange rate prevailing when the transaction is closed).



Madrid, January 18th, 2008.





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