Statement re Legal Proceeding

Telefonica SA
29 May 2000

Telefonica, S.A. has been informed of the existence of a legal proceeding to
contest the validity of the resolutions adopted by the Extraordinary
Shareholders' Meeting of Telefonica, S.A. of February 4th of this year.

The aforementioned proceeding derives from Telefonica's alleged failure to
comply with the shareholder plaintiff's right to information, Telefonica's
alleged failure to comply with the regulations relating to the celebration of
Shareholders' Meetings and Telefonica's alleged failure to comply with the
necessary requirements to validly exclude pre-emptive rights in connection with
capital increases.

Telefonica, S.A. is convinced that the aforementioned proceeding will be
resolved in such a way that is entirely satisfactory to Telefonica, S.A.

Finally, the Company would like to stress that the aforementioned proceeding in
no way whatsoever implies the postponement of the possible execution of the
resolutions approved by the Extraordinary Shareholders' Meeting, subject to the
aforementioned legal proceeding, therefore, the execution of this will continue
as foreseen.