Subsid's Agreement

Telefonica SA
7 February 2000

TERRA AND SUN MICROSYSTEMS INC. SIGN A COLLABORATION AGREEMENT


On February 3rd 2000, the Telefonica S.A. subsidiary Terra and Sun Microsystems
Inc., specialised in the Internet business, signed a collaboration agreement to
jointly develop technological projects for the creation and distribution of
services via Internet.

The Agreement also includes the creation of a 'Excellence Centre' for the
development, testing and evaluation of advanced Internet products and services.

This Agreement also foresees the launching of the gateway 'Star Portal' in all
the countries where Terra operates.  This gateway aims to offer access to
information without having to install computer applications in the Network's
access point, therefore information can be accessed not only using conventional
applicances but also using mobile telephones, television, etc...

Madrid, February 7th 2000.