2004 Financial projections

Telefonica SA
27 February 2004

                            ANTONIO J. ALONSO UREBA

                        Director, General Secretary and

                      Secretary of 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


Today, February 27th, 2004, the Company will present 2003 full year results,
primarily to investors and analysts. In relation to the information to be
disclosed in this presentation, special emphasis is placed on the communication
of the expected performance of the Group and its main business lines in 2004,
based on key financial indicators.


All estimates are in constant currency terms, assuming constant exchange rates
as of 2003 and excluding changes in consolidation. Telefonica de Espana and
Telefonica Latinoamerica's projections, include Telefonica Empresas' Spanish and
Latin American businesses, respectively, in 2003 and 2004. Telefonica Moviles'
estimates are those communicated by this company in its presentation to
investors and analysts made on February 20th, 2004.


These financial projections are as follows:


TELEFONICA GROUP


  • Change in Revenues: Between +7 / +10%

  • Change in EBITDA: Between +7 / +10%

  • Change in EBIT: Between +15 / +18%

  • Change in CAPEX: Between 0 / +3%

  • Change in Operating Cash Flow (EBITDA - Capex): Between +8 / +11%


TELEFONICA DE ESPANA GROUP


  • Change in Revenues: Between +0.5 / +2.5%

  • Change in EBITDA: Between +2 / +5%

  • Change in Operating Cash Flow: Between +13 / +16%


    (EBITDA-CAPEX-Payments to pre-retirees)




TELEFONICA LATINOAMERICA GROUP


  • Change in Revenues: Between +6 / +9%

  • Change in EBITDA: Between +6 / +9%

  • Change in Operating Cash Flow: Between +3 / +6%


TELEFONICA MOVILES GROUP


  • Change in Revenues: Above +13%

  • Change in EBITDA: Above +7%

  • Change in CAPEX: From 1,214 M€ in 2003 to 1,600 M€ in 2004








The Company will make the complete presentation publicly available on its
website (www.telefonica.es / www.telefonica.com).


Madrid, February 27th, 2004

This document contains statements that constitute forward looking statements of
the Company or its management, including statements regarding the intent, belief
or current expectations of the customer base, estimates regarding future growth
in the different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.


Such forward looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those in the forward looking statements as a result of various factors.


Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this
communication. Telefonica undertakes no obligation to release publicly the
results of any revisions to these forward looking statements which may be made
to reflect events and circumstances after the date of this communication
including without limitation changes in Telefonica's business or acquisition
strategy or to reflect the occurrence of unanticipated events. Analysts and
investors are encouraged to consult the Company's Annual Report as well as
periodic filings made with the relevant financial regulatory authorities.





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