Stmnt re Press Comment

Telefonica SA
9 January 2001


'TELEFONICA, S.A.', in accordance with that stated in article 82 of the Spanish
Stock Market Law, hereby announces the following:

                           SIGNIFICANT EVENT

In relation with the news that has appeared in a certain newspaper regarding a
possible corporate action between Terra Networks, S.A. and TPI-Paginas
Amarillas, S.A., both controlled by Telefonica, S.A., the Company would like to
stress that despite the fact that numerous investment banks have, unilaterally
and with no previous request having been made, presented multiple projects on
possible corporate actions, no corporate body with any power of decision
regarding the two companies mentioned has analysed nor considered, in any way
whatsoever, the possibility of a corporate action between Terra Networks S.A.
and TPI-Paginas Amarillas, S.A.

Should the case arise, the CNMV would be informed immediately.

Madrid, January 9th 2001.