3rd Quarter & 9 Mths Results

Telefonica SA
16 November 1999


INTRODUCTION                                         

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Spanish  accounting principles, the  Brazilian  companies
acquired in  August 1998, Telesp Participacoes, S.A. and  TeleSudeste Cellular
Participacoes, S.A., are fully consolidated in 1999. To give a clear picture  of
the impact of this full consolidation, the consolidated financial statements
include a detailed corresponding breakdown.

During the first nine months of 1999, Telefonica Internacional increased  its
interest in some of the Brazilian companies acquired in August 1998. It  bought
directly on the market and raised its stake in the consortium involved  in  the
privatisation  of Telesp Participacoes, S.A. to 17.48% (compared with  16.8%  in
June). At the end of September it had interests of 17.6% of TeleSudeste Cellular
Participacoes,  S.A  (no  change  from June)  and  8.8%  of  TeleLeste Cellular
Participacoes, S.A. (compared with 8.1% in June).

In the course of the first half, CRT was split Into CRT Fixa and Celular CRT.
The Group maintains a 16.7% stake in CRT Fixa and, a 35.2% of Celular CRT
Participacoes after this company's capital increase in August. Both companies
continue to be reported by the equity method.

The accounting principles relating to consolidation goodwill changed last year,
with  the maximum amortisation period being extended from 10 years to 20  years.
 Amortisation reporting procedures in 1999 observe this new period  except when
goodwill is expected to be recovered over a shorter period, whereas the criteria
applied in the first nine months of 1998 observed a maximum period of 10 years.

There has also been a change in reporting procedures for the depreciation of the
Peruvian and Brazilian concessions, which as from 1999 are included under  the
heading  'Amortisation of goodwill', due to the conceptual  similarity  between
consolidation  goodwill and these concessions. In past years, depreciation  of
these concessions was reported under depreciation of fixed assets. But in this
quarter's  accounts the figures for 1998 have been harmonised  by  applying the
same criteria in both years.

It should be noted that 'work in progress' has been reclassified. In 1998 it was
booked as a reduction in the cost of supplies but is now reported as an increase
in 'own work capitalised'.  The figures corresponding to the first nine months
of 1998 have been recalculated to facilitate like-for-like comparisons with the
current year.

In January 1999, Telefonica sold shares representing 12.2% of Amper. It still
owns 12.2% of this company, which continues to be reported by the equity method.

Also in January,  100%-owned subsidiary Telefonica Intercontinental acquired
Austrian group European Telecom international GmbH.  This company is fully
consolidated.

In January CTC acquired a 60% shareholding in the Sonda Group, which is fully
consolidated.

In the first quarter of 1999, Telefonica Internacional acquired another 1.44% of
Telefonica del Peru. This increased the Group's total shareholding to 36.44% at
end-September (31.5% in September 1998). This shareholding continues to be fully
consolidated.

In March Telefonica sold all its shares in Sofres Audiencia de Medios  (25%  of
the company) which Telefonica had until then reported by the equity method.

On 19 May Telefonica sold 100% of its subsidiary Temasa to Tyco Submarine
Systems Ltd. This company was previously fully consolidated.

Telefonica Media has gradually increased its stake in Via Digital over the 
course of the first half, in several different operations (purchase from RTVE
and capital increase). At end-June 1999 it directly owned 68.6% of Via Digital's
capital. This company continues to be reported by the equity method due to an
19.6% stake that is pending to be sold.

In June 1999 Telefonica Internacional exercised an option to buy 19% of TLD's 
capital, rising its stake to 98%. TLD continues to be fully consolidated.

Telefonica, S.A. acquired 5% of publishing group Pearson in June, and reports
this shareholding by the equity method.

In  June,  35% of TPI's capital was floated on the Spanish stock market. TPI
continues to be fully consolidated.

In July Portugal Telecom, S.A. held a one for ten rights issue and Telefonica 
subscribed for its full share. Later in July Telefonica bought 50% of Alianza
Atlantic Holding BV, which owns 950,000 Portugal Telecom shares.  This  raised 
Telefonica's total stake in  Portugal Telecom to 3.75%. This company continues
to be reported by the equity method.

In  August,  Telefonica Media, S.A.. bought 100% of radio group Uniprex, SA,
which is fully consolidated as from September.

In the year to September, the Telefonica Internacional Group reduced its
stake in Telefonica de Argentina to 27.21%.

Over the same period Telefonica Media raised its stake in Antena 3 de Television
to 46.92% in two stages, buying 17.09% in February and 6.43%
in July.  Antena 3 is still consolidated by the equity company.

TELEFONICA S.A. FINANCIAL HIGHLIGHTS
(TISA'S SUBSIDIARIES CONSOLIDATED BY THE EQUITY METHOD)

Unaudited                                     Euro million
                             January-September            July-September
                         1999      1998   %Chg.      1999     1998    % Var.
                         
Operating revenues      9,857.7  8,990,8   9.6      3,463.7   3,045.4   13.7
EBITDA                  5,057.1  5.018.0   0.8      1,655.3   1,739.2   (4.8)
Operating profit        2,250.0  2,571.1 (12.5)       749.7     899.4  (16.6)
Income before tax       1,744.1  1,280.6  36.2        370.1     517.0  (28.4)
Net Income              1,413.8    981.7  44.0        393.8     392.0    0.4
Earnings per share         0.44     0.32  38.4         0.12      0.13   (3.4)
Outstanding shares,
 millions (1)           3,198.8  3,074.6   4.0      3,198.8   3,074.6    4.0

(1) Shares at the end of the period. Increases of 20,497,545 shares in January
1999 and 20,907,509 shares in March 1999, both as a result of bonus share issues
(1x50). The number of shares shown above includes the 3xl share split of
23/07/99. The 1998 comparison base share has been similarly adjusted to
facilitate comparisons.

TELEFONICA, S.A. RESULTS

All management comments given in this report refer to the financial performance
of Telefonica S.A., with all subsidiaries in which Telefonica Internacional has
shareholdings reported by the equity method.

Telefonica S.A.  posted consolidated net income in the first nine months  1999 
of EUR1.41 billion (Ptas. 235.23 billion), up 44% on the previous  year.  This
growth rate was heavily influenced by one-off factors in the second quarter;
capital gains, from the TPI placement and sale of TEMASA,  net of tax and
generic provisioning.  Stripping these  out, underlying growth was 19.1%
(compared to 31.8% in the first six months).

The 19.1% underlying growth came partly from EBITDA, (4 percentage points),  and
the other 15.1 percentage points derived from the combined effect of  higher
depreciation,  lower results from Latin American subsidiaries and other
non-operating items (financial and extraordinary results and taxes).

 - EBITIDA's contribution to growth was much smaller than in the first
   half-year of 1999; 4 out of 19.1 percentage points compared to 21 out of     
  31.8 in the year to June. The reasons were;

   - Changes in tariffs and interconnection rates from July cut EUR145
     million off Telefonica de Espana's revenue.  Otherwise Telefonica de       
    Espana's EBITDA would have shown a 1.2% rise rather than its actual 
     -2.1% fall. The effect would have pushed growth at Group's EBITDA to
     3.4% rather than 0.8%.

   - Telefonica de Espana's operating expenses rose significantly due to higher 
    supplies (interconnection expenses) and subcontracts aimed at stimulating   
  usage and increase customer loyalty (basically, commissions and               
 advertising).  This, despite the continuing fall in personnel expenses 
     (-12.5%) thanks to downsizing in the parent company-Telefonica has         
    reduced its workforce by 7,978 employees since September 1998. It           
   now has a productivity ratio of 368.9 lines per employee (+22%).

   - On the plus side,  consolidated revenues rose by 9.6%,  two percentage     
    points above first-half growth,  which went some way towards offsetting     
   the slowdown in EBITDA growth.  This seems to have been due to the success   
  of the sales drives over the  period, as Telefonica de Espana sales grew      
 2.8% (compared to +3.6%  to June) while sales at T. Moviles, T. Data and       
the other subsidiaries grew at a healthy 31.6%, 29.3% and 19.7%,               
respectively.

   - Note  too,  that  EBITDA margin at Telefonica Moviles grew faster than in  
    the first half of 1999 (+11.3% vs +7% to June) and now stands at 37.6% of   
   total revenue (vs 36.1% in June) this despite the rising subscribers         
  acquisition costs.

 - The other 15.1 percentage points were explained by;

    - Operating profits fell 12.5% y-o-y,  mainly due to higher depreciation    
     charges at Telefonica de Espana as a results of the shorter depreciation   
    period applied for some of Telefonica de Espana's assets since the          
   beginning of the year.  Stripping out this effect, operating profits         
  would have remained flat.

    - Income before tax was up 36.2. This growth is attributable to lower net   
     extraordinary expenses - excluding the net effect of capital gains and     
    generic provisioning in the second quarter-coupled with improved net        
   financial results (25.3%), partially offset with the drop in equity          
  income from Latin American subsidiaries, affected  by the macroeconomic       
 environment in the area.  Extraordinary expenses went down mainly  due         
to the accounting criteria applied to Telefonica de Espana's 1999-2000
      workforce rationalisation plant and the lower dismantled plan pending     
     depreciation.

    - The effective tax rate has been lowered from 23.3% in  September, 1998 
      to 18.7% in 1999 as a result of the application of provisions for         
     depreciation for investments in Brazil. These are deductible upon          
    calculating the expense for corporate tax and are eliminated in the         
   consolidation process.

 Note that if we strip out the effect of cuts in Telefonica de Espana's
 tariffs,  in  force since July 1, and the capital gains and generic
 provisions in the second quarter, net income growth would have been 29%
 y-o-y - in line with the comparable figure to June 99 (31.8%).

SIGNIFICANTS EVENTS:

- The IPO of Terra, by which up to 30% of the company's capital was placed      
 with retail and institutional investors, closed on  November 16.  Shares  in   
the company will be traded on both the Spanish exchanges and NASDAQ from       
November 17 on. The flotation makes Terra the first Spanish internet company   
to be launched on the stock market.

- On  November 5 Telefonica share launched its third bonus share issue,         
 offering one new share for every fifty currently outstanding, in accordance    
with the resolutions agreed at the March 1999 AGM. The capital Increase        
extends to a total of 63,976,998 shares. The period during which eligible      
shareholders may claim their free allocation opened on November 5 and closes   
on November 19.  Rights to the free allocation may be traded on the stock      
market throughout this period.  The new shares will carry identical voting     
and financial rights as those currently outstanding.

- On November 3 the companies of the Telesp Group submitted a request to the    
 Brazilian market regulator, Anatel to approve a broad corporate and            
operational restructuring, involving the companies within  the  Group.  The    
corporate restructuring will be effected through successive mergers beginning  
with the merger of CTBC into Telesp, followed by the merger of Telesp's        
successor into Telesp Par and,  finally,  the merger of SPT into Telesp Par.   
The surviving Telesp Par will be the operating company that provides           
telecommunication services in the concession areas under the corporate name    
of Telecomunicacoes de Sao Paulo S.A. Telesp.  The corporate restructuring     
will not cause a change of control of TelesPar.

- At the end of October, Telefonica launched its MoviStar mobile telephony      
 services in Guatemala. The network used for the MoviStar PCS service is based  
on CDMA technology.

- On October 15 the Spanish cabinet approved a series of tariff adjustments,    
 imposing a reduction in the nominal price for local calls during normal and    
peak hours, from 4.52 pesetas to 4 pesetas per  minute,  effective from        
November 1 1999 maintaining the current conditions of the initial franchise,   
and a widening of the reduced-rate period for local calls. Provincial and DLD  
tariffs were also cut, by 4.36% and 17.56% respectively.

  IDL call tariffs are also due to fall, by 6.68%, before December 1 1999,      
 while the price of leased digital lines will be reduced by at least 14% for    
national leased lines and by  26% for international leased lines from          
December 15 on.  As from January 1 2000,  the price of fixed-to-mobile calls   
will be out by 11.8%.

  Additionally,  a monthly flat-rate fee of Ptas. 4,000 for internet access     
 using ADSL technology was approved, along with amendments to the price of      
internet packages providing 50 hours day-time access and 50 hours night-time   
access (10% off the initial price in the case of the former and 20% off in     
the case of the latter).

  On the other hand, the resolutions adopted by the cabinet on October 15
  give Telefonica the freedom to set prices for the different services it
  offers, after August 1st 2000, according to a price-cap to be established,
  adapted to the expected performance of the CPI.

  Lastly, the cabinet approved a Ptas. 300 increase to monthly fees (Ptas.
  100 from August 1 2000, Ptas. 100 from March 1 2001 and Ptas. 100 from
  August 1 2001).

TELEFONICA S.A.   
MARKET SIZE

Thousands            September     % var.  Weighted   figures (*)  % var.
                   1999    1998    99/98    Sept 99   Sept 98      99/98

Lines in service  39,066  36,129    8.1      23,565    21,737       8.4
Spain             18,947  17,863    6.1      18,947    17,863       6.1
Other countries   20,119  18,266   10.1       4,618     3,874      19.2
Cellular clients  16,928   8,512   98.9       9,597     5,046      90.2
Spain              7,700   4,175   84.4       7,700     4,175      84.4
Other countries    9,228   4,337  112.8       1,897       871     117.6
Pay TV clients     2,397   2,378    0.9       1,003       819      22.5
Spain                360     272   32.4         248        95     161.1
Other countries    2,040   2,106   (3.1)        755       724       4.2
TOTAL             58,394  47,019   24.2      34,165    27,602      23.8

(*) Weighted for the economic interest held in each company.


TELEFONICA S.A. RESULTS BY COMPANY (*)       

Unaudited figures                  Revenues                    EBITDA
Million euros               January-September          January-September
                             1999     1998   % Var.   1999     1998    % Var.

Telefonica de Espana Group  7,461.9  7,256.3   2.8      3,881.1  3,932.2  (1.3)
T. Servicios Moviles Group  2,673.1  2,030.6  31.6      1,004.5    902.1  11.3
Telefonica Data Group         432.3    334.4  29.3         94.0     51.4  83.4
Other subsidiaries          1,227.4  1,025.1  19.7        101.7    136.5 (25.5)
Eliminations               (1,937.0)(1,655.6) 17.0        (24.2)    (4.2) n.s.
GROUP                       9,857.7  8,990.8   9.6      5,057.1  5,018.0   0.8

(*)TISA's subsidiaries consolidated by the equity method.

RESULTS ANALYSIS BY COMPANY

TELEFONICA DE ESPANA GROUP

Operating revenues  amounted to EUR7.46 billion in the nine-month  period.
The growth rate at this line slowed from 3.6% in the year's first half to
a cumulative 2.8% up to the end of September. The most significant impact
came from Telefonica de Espana, where 1H revenue growth of 2.6% cooled to
+1.7%  in  cumulative  year-on-year figures. The impact of August 1998
tariff changes,  we should note,  is now smoothing out in y-on-y comparisons. 
Set out below are the principal factors driving revenue growth:

 - Positive  performance  of  revenue from new  services,  strong  expansion    
  in Intelligent  Network, leased lines and ISDN, where the 293,007  basic      
 access and 7,998 primary access went up 99.1% and 73.5% respectively.

 - Telefonica is fighting back against market share erosion. A moderate         
  advance in the period reflects both the commercial efforts deployed and the
   company's good market positioning.

 - Traffic growth is explained by a 6.1% increase in lines in  service and a
   9.8%  growth in usage per line/day, that stood at 12.95 minutes per line     
  per day. Total traffic volumes moved up 13.9%, beating 1H growth by 0.7 p.p

 - Higher interconnection revenues. This item now makes up 3.1% of Telefonica
   de  Espana revenues despite the price reductions of the past 12 months.
   Specifically, the application from July onwards of new Interconnection
   Reference Prices with mobile operators has eroded 3Q revenues by an
   estimated EUR58 million.

 - July tariff cuts have reduced third-quarter 1999 revenues by around EUR87
   million.

If call tariffs and interconnections rates had stayed unchanged, Telefonica 
de Espana Group revenues would have shown a 4.9% growth and those of Telefonica
de Espana a 3.8% increase, topping the first-half figures in both cases.

The revenues mix improved in the period, with long-distance services losing
weight and a higher contribution from monthly fees and local calls,  including
internet traffic. Provincial and DLD reduced its revenue weight  by 5.3 p.p.,
while local calls and monthly fees gained 4.4 p.p. ILD revenue's  weight  held
constant,  since greater call traffic and the positive market share performance
were enough to outweigh lower tariffs and settlement rates.

Operating expenses growth quickened from 3.4% in the first six months to 6.3%
up to September.  However,  if we strip out the increase in interconnection
expenses incurred on higher market activity,  third-quarter figures  would
actually show a 2.0%  reduction, mainly due workforce reduction efforts  and
efficiency gains of recent quarters.

Another 3Q stand-out was sharply higher spending on advertising, promotions  and
commercial efforts  (enlargement of the sales force serving the 'Business'
segment:  the  PIVOT project) aimed at building customer loyalty and boosting
usage.

EBITDA,  as anticipated, dropped back from 3.1% growth to June to a cumulative
1.3%  decline in the nine-month  period. The main reason explaining this
performance was the impact of the tariff cuts in Telefonica de Espana
results-from a positive 2.3% EBITDA growth rate in the 1H period to a  negative
2.1% in nine-month figures.

Depreciation rose at a slightly slower pace, in line with the new  depreciation
policy  announced at the beginning of the year. Depreciation increased 15.8%  to
end-September compared to the +18.4% recorded to June 1999.

Net extraordinaries results declined 45.1% in nine-month figures against
-32.4%  in the 1H,  due to the high charges related to the workforce
rationalisation  plan  at the end of 1998. The net reduction in Telefonica de
Espana headcount increased from 6,847 in the first half to 7,388 at the
September  close, leaving workforce numbers at 51,366 and productivity  at 
368.9 lines/employee.

The tax rate held at around 23.2%. This was 9 p.p. higher than in 1998, because
of the lower provisions for workforce reduction in 1999.

TELEFONICA MOVILES GROUP

The Spanish  cellular  market  surpassed  30%  penetration  in  the  month  of
September after  advancing 5.5 points in the 3Q period-an all-time  record  in
quarterly growth. Telefonica Moviles' net addition of 2,805,468 customers  in
the   first  nine  months  makes it the fastest-expanding of all European
operators.  The total customer base stood at 7,699,732, calculated according  to
the usual conservative criteria.

The MoviLine analogue service now has 768,874 customers, thanks to the positive
performance of its MoviLine Optima pre-paid card, that already has more than
150,000 users, showing a temporary slowdown in its downward trend.

GSM  service MoviStar reached 6,930,858 customers,  more than doubling the
customer base as of September 1998. The main growth driver was again the
MoviStar Activa  range of pre-paid cards, which went up 232% with more than
4,150,000 users.

According  to  the  customer figures given by competitors, Telefonica Moviles
has a 3.7 million lead over its nearest market rival, 52% higher than in
September 98, or 90% higher if we take only the digital market. The gap between
estimated traffic share and customer market share is also much wider,  perhaps
due to different methods of calculating customer bases. Both factors reinforce
the competitive advantages derived from maximising economics of scale.

Also in the third quarter, the number of roamers using the MoviStar network
was practically  twice that of summer 1998, while short messages actually
tripled last year's figure.

Aware of mobile telephony's potential as a tool for real-time information
access, Telefonica Moviles has added the CNN news service to its existing
Reuters feature.  MoviStar users can thus access top international news
agencies in addition to local providers like Antena 3, EFE and RNE.

Though the expansion of the customer base has inevitably entailed  higher
commercial costs, the economies of scale allowed for a improved profitability
in the third-quarter of 1999. EBITDA margin rose to 40% of  revenues.  EBITIDA
margin before subscriber acquisition costs is logically some way up on last
year's.

Operating revenues of EUR2.67 billion (Ptas.444.77 billion) were 31.6% higher
than in 1998, while operating profit moved up 10% to EUR673.1  million
(Ptas.111.98 billion).  These figures,  moreover,  reflect the company's
conservative criteria on income and expense accounting, which exerts a 
magnified  effect  at times of heavy promotions of usage. Net income for the
nine-month period amounted to EUR419.7 million (Ptas.69.83 billion), an 
increase of 14.4% vs. September 1998.

Capital expenditure to September was EUR516.9 million (Ptas. 86.0  billion),  in
line with the increase In CAPEX budgeted for the year.  This has enabled  the
company to cope effectively with 67.8% greater traffic (9,621 million air
minutes  to  September 99), and further improve its already excellent quality
levels.

Significant events following the September 30 close include the launch at 
Madrid IT fair 'SIMO' of 15 new products and services, with special emphasis  in
new features improving access to internet through cellular phones.  One  such
initiative is the OLEADA portal-designed in collaboration with Terra  Networks
for use from WAP handsets-and the first data communication system  based on GSM
with billing by data volume.

TELEFONICA INTERNACIONAL GROUP 

At end September, Telefonica Internacional had 20.1 million lines in  service
(17.5 million lines under management), an increase of 10.1% year on year.  This
growth is largely attributable to the increase in Telesp's  and  CRT's  lines
(+26.8% and +19.9% respectively) though Telefonica del Peru also saw significant
expansion on the back of its 'Telefono Popular' launch in the second half of
1998.

In  cellular business, the Telefonica Internacional Group had over 9.2 million
customers at September 30 (5.9 million clients under management), doubling  the
figure  of September 1998 and representing net additions vs. June 1999  of  over
1.3  million.  Companies  managed reported y-on-y growth  upwards  of  40%, on
average,  with best performances from Brazilian subsidiaries, building on the
launch of pre-paid cards in the first half of the year, and  Startel  (CTC),
after the February 1999 launch of the 'Calling Party Pays'.

The  strategy  to establish the second telecom operator in Central America is
showing  a positive performance. For example, Telefonica El Salvador captured
a 31% market share in cellular telephony and a 40% share in ILD service in the
first year of operations.  And  Telefonica Centroamerica Guatemala,  which
started to  offer ILD services last July, had 21% market share at the end of
September.

Results from Latin American associated companies totalled  EUR83.4  million  in
nominal  terms, a drop of 67.8% year on year. This was partially due to local
currency  devaluation  against  the peseta,  but the following factors also
explain this performance:

  The EUR27.1 million losses of Telefonica Chile, compared to a EUR179.6        
 million profit in the same period last year. The reasons for the slide were
  essentially:

  - Ratification in August of the new tariff decree, taking effect              
   retroactively from last May. The impact of this measure amounts to
    approximately EUR65 million less revenues in the May-September period.

  - Increase in bad debt levels provoked by the country's economic recession,
    which forced to make a provision for uncollectables of around EUR52.8
    million (EUR38 million in the first nine months of 1998).

  - Headcount reduction affecting 684 employees and entailing extraordinary
    expenses of EUR22.3 million, as a result of severance indemnities.

  - A negative 'correccion monetaria' (EUR96.1 million) as a result of the
    Chilean  peso  depreciation vs. the dollar (11.2% since the beginning of
    the year).

    However, capital gains from the sale to Terra Networks of Telefonica Net
    will be included in fourth-quarter figures.

 - Telefonica de Argentina showed flat earnings vs. 1998 (EUR344.3 million, an
   annual 1.2% drop in local currency and 0.6% increase in euros).  Higher
   depreciation charges (+6%) and non operating expenses (financial expenses    
  on the 1998 share buy-back) were the main factors explaining this             
 performance and offsetting the stable evolution of EBITDA.  Note that in       
1999, Telefonica Internacional reduced its stake in the company to 27.21%.

 - Telefonica del Peru net income dropped 48.2% in euros and 42.2% in  local
   currency,  mainly due to the slight reduction of EBITDA  (-1% in local
   currency), increased depreciation charges (higher depreciable asset base),
   higher financial expenses arising from the 1998 share buyback and a negative
   'correccion  monetaria*  (EUR51.8 million,  due to the 8.7%  Nuevo Sol 
   depreciation against the Dollar since the beginning of 1999).

 - Small  contribution of the Brazilian subsidiaries (EUR4.6  million). These
   companies' net income were severely affected by the new depreciation policy
   applied (which shortened the useful lives of certain assets) and the Reais
   devaluation against the  US  Dollar,  which  led  to  significant  negative
   'correccion  monetaria'  figures,  particularly at CRT, CRT Celular  and
   Teleleste Celular. Also, the more aggressive commercial policies deployed    
  by the cellular companies to face local competition have affected EBITDA      
 margins,  showing annual decreases.  Nevertheless all the Brazilian            
subsidiaries reported higher EBITDA figures vs. previous quarters.

At TISA holding company level, the lower results from associated companies and
the  higher  financial expenses due to greater stock of  debt  were  offset  by
higher  management fees (EUR117.8 million; +37.2%) and lower taxes. The 
decrease in  the  corporate tax provision is explained by the application of 
provisions for  depreciation of the Brazilian Investments, deductible upon
calculating the expense  for  corporate  tax  and  eliminated  in  the 
consolidation  process. Additionally, TISA has applied for export tax credit.
Both factors resulted in a 9.4% annual growth in net income that reaches
EUR131.8 million.

TELEFONICA DATA GROUP 

In  the  third quarter of 1999, Telefonica Data Espana was awarded the type A
individual licence for supplying fixed-line telephony, enabling it to offer  to
its corporate customers bundled voice and data services packages via one single
connection.  The licence also allows interconnection with other operators and
their users.

In a step towards co-operating with other data units of the group, Telefonica
Data  began collaborating with Telefonica de El Salvador and TIUSA to  develop
their IP network.

Telefonica Data was Spain's first operator to launch a broadband ADSL service.
This service, called Megavia ADSL, is aimed at both ISPs wishing to offer their
users ADSL access and companies with teleworkers and small offices that are
seeking corporate network or internet access.

The Infonegocio service, providing information services through Internet (web
hosting, e-mail, e-commerce, etc), is experiencing steady growth.  From  June
1999 to September 1999 it sold 14,142 packages, a 130% increase on the 6,154
sold in the year to June, this figure rising to 21,084 by October (+243%).

Telefonica Data also signed an agreement with SAP (the world's leader in
integrated management systems) to enhance its range of services to SMEs. As a
result,  SAP  Espana is to introduce its ERP (Enterprise Resource Planning)
system onto the IP network. This is a business management system allowing any
company to manage all its business activities on the internet in real time.

In the year to September 30, Telefonica Data operating revenues totalled
EUR432.3  million,  ie,  29.3%  growth on the same period in  1998.  Operating
expenses grew on the back of the expansion in business, but with just a 14.1%
increase was far behind revenues.

As a result, EBITDA went up 83.4% year-on-year, with net income reaching EUR28.7
million.

At the operating level, dedicated ports increased by 5.7% while the number  of
IP network switched ports rose by 116.7% to 36,270.


TELEFONICA MEDIA GROUP

Its results depend on the financial performance of its subsidiaries,  notably
Antena 3 and Via Digital.

Antena 3

Operating  revenues  in  the year to September were EUR353 million (Ptas.58.74
billion),  with a 21.3% annual growth and a 26% increase in the  third  quarter
of the year over Q3-98.

The EUR97.9 million operating profit (Ptas. 16.29 billion) represented  a  34.6%
growth on the previous year. This was explained by healthy performance in both
sales  and  operating  expenses  (increasing 4 percentage  points  slower  than
sales) and despite a higher depreciation charges (+26.3%). The ongoing  margin
improvement begun in 1998 continued, and at the end of September,  operating
profit margin stood at 27.7% of revenues against 25.0% in September 1998.

Net income came  out  at EUR59.3 million (Ptas. 9.87 billion), with a 55.5%
growth,  outstripping  the  increase in operating  profit,  due to the lower
financial expenses  derived  from the 1998 capital  increase,  which  cut  the
company's borrowing requirements, and the interest rate cuts.

Out  of  the  company's  EUR18.2  million total  investments  in  September, 
the acquisition  of Movirecord, a distributor of cinema advertising, accounted 
for EUR17.2 million.

Antena 3 maintained its leadership as the top private commercial TV channel in
September,  and was the nation's favourite choice of evening  viewing,
registering more stable viewing figures than any other channel in the month.

  
Via Digital

At end-September (1) Via Digital had 356,572 clients, 43,838 up on June 1999
and 36% year-on-year. On figures up to October 31, Via Digital billed  400,331
clients, confirming the acceleration trend in the expansion of the customers
base.   This  is the  result  of the improvement in the sport contents,
particularly  the  broadcast of football matches in both European competitions
and   the   Spanish   league.  In  September,  gross additions tripled  and
cancellations went down by 40%.

Note that Via Digital's revenues went up by 67.4% in the year to  September,
far ahead of  the 36% expansion in the client base.  In the same period,
however, it reported EUR126.1 million losses, compared with the EUR101 million
loss registered in the same period of 1998.

TERRA GROUP

The Telefonica Interactiva Group has renamed itself Terra Group.  It has also
changed the brand and domain names of the Telefonica Group's portal and access
businesses in all target market countries to 'Terra', while sticking to local
brands  in  all  established  markets  (Brazil  and  Mexico).  The company  is
currently  immersed  in  its IPO, due to end on November  17,  when the stock
starts trading on the secondary markets.

Continuing with the rapid expansion it has experienced since Q2-99, the Terra
Group provided access to 860,930 clients and acted as portal for 290 million
web page visits in September.

Among the most significant developments, note its acquisition of Informacion
Selectiva SA de CV, (Infosel) through the agreement reached with the Reforma
group in July 1999. Infosel is Mexico's second-ranking ISP in the SOHO  and
residential  markets. With its 49,000 client base it is the country's leading
portal,  directing  visits to 27 million pages in September.  Terra group has
also agreed with Amadeus to set up a joint 50-50 company called 'Joint 
Initiative Amadeus Telefonica', providing travel services over the web in both
Europe and Latin America.

The expansion strategy into the Spanish and Portuguese speaking markets
continued with the purchase of the Argentine portals Gauchonet and 
Donde.com and the establishment of subsidiaries in Peru and Chile.  It  also 
signed a strategic alliance with Infovia  S.A.,  Guatemala's  main  ISP,  to  
become integrated within the Terra Group.

In  Spain,  ISP  Teleline began marketing ADSL technology with three types of
offers depending on the speed the client requires (familiar,  class and
Premium).

(1) The company's sales booking criteria mean the customer base calculated for
    each month corresponds to the base of the 15 of said month.

         
TPI-RAGINAS AMARILLAS GROUP

Operating revenues for the first nine months moved up by 34.1%, mainly  due  to
the following factors:

 - Increase  in  revenues  from the 42 Paginas Amarillas directories  (yellow
   pages) published by the Group.

 - Publication of two additional Paginas Amarillas directories.

 - Higher revenues generated on the Paginas Blancas directories published to
   September 30, 1999 than on the same directories in 1998,  boosted  by
   revenues from the 11 new directories published for the first time in 1999.

 - New contract signed with Telefonica in May 1999, regarding revenues from
   the publication and distribution of Paginas Blancas directories.
               
 - Contribution of Paginas Amarillas On-line and Paginas Habladas (talking
   pages).  Though still marginal in quantitative terms, revenues from these
   businesses achieved significant growth rates.

EBITDA surged 42.2%  y-o-y in the first nine months of 1999,  mainly due to
revenue growth outstripping expenses increases.  Operating expenses rose as a
result of higher production costs (materials, printing and distribution)  due
to the production of two extra Paginas Amarillas directories and eleven  more
Paginas  Blancas.  On  the  other  hand, the  stronger  sales  of  both  paper
directories  and  on-line  products (Paginas Amarillas On-Line and paginas
Amarillas On-Line and Paginas Amarillas Habladas) led to higher commissions
paid to sales agents and a increase in marketing expenses.  Lastly, following
implementation of the new Paginas Blancas contract with Telefonica, EBITDA  now
includes  fees  to  Telefonica  for the transfer of Paginas Blancas commercial 
operations to TPI.

Net income totalled EUR 54.5 million (Ptas. 9.08 billion), up 131.5% This
figures includes extraordinary income of EUR22.5 million (Ptas.  3.75  billion)
mainly from the sale  of subsidiaries (Venturini, Estratel and Doubleclick)  in
the first  half of 1999. Extraordinary expenses included EUR8.76 million (Ptas.
1.46 billion)  related  to  the early cancellation of the previous  Paginas 
Blancas contract.

Two major new products were launched by TPI in the course of Q3. Firstly,  the
new Paginas Amarillas  On-Line  home  page,  allowing  more user-friendly 
navigation by presenting the most often consulted products and services on the
net in a 10-category directory.  And secondly, TPI's Plataforma de Comercio
Electronico,  or  e-commerce  platform, hosts over 500 shops in 21 different
categories.  This  platform's launch was accompanied by  a  special  promotion,
offering all interested companies free design, web hosting and maintenance  for
their virtual stores.  The  e-commerce platform  for  Paginas  Amarillas  has
payment gateways to several banks and is backed up by the electronic  payment
system SET.


TELEFONICA INTERCONTINENTAL GROUP 

Telefonica Interncontinental, a 100%-owned Telefonica S.A.  subsidiary,  made
considerable progress during the third quarter of the year.

European Telecom,  an Austrian company specialised in marketing and distributing
telecommunication services,  has consolidated its place as Austria's number-two
alternative telecoms operator by increasing its customer
base  to  10,249. The company has also furthered its expansion with the  launch
of new projects for the extension of its network.

These projects include the roll-out of an IP data network embracing the six
largest Austrian cities, in collaboration with Lucent Technologies.  Through
this network the Group plans to offer internet access, web-hosting and web-page
design services.

This company's radio access project is due to be implemented in two stages
pilot phase, in Vienna only, followed by roll-out to Austria's five largest
cities. The company is currently negotiating the necessary authoritations with
the Austrian government.

On 20 October Telefonica Acea was created, with an estimated capex of EUR200
million.  The new subsidiary should begin operations in the first quarter  of
the year 2000. This new company will develop a network infrastructure for Rome
and the entire Lazio region, with the aim of providing internet and e-commerce
services, incorporating  direct access for corporate clients and value added
services for residential customers. Other projects include the roll-out of an
IP network and provision of complementary radio access services for certain
SMEs.

At the first board meeting of Medi Telecom, the consortium  awarded with a 
second mobile telephony in Morocoo, a business plan envisaging a capex of EUR226
million and the creation of 1,100 jobs  over the  1999-2002 period was
presented.  The roll-out of networks began on October 20 and the network could
be up and running by April 2000.

FOR FURTHER INFORMATION CONTACT:

Investor Relations
Gran Via 28, planta 3a. 28013 Madrid.
Tel: [phone] 02 /584 03 06.
Fax: [phone].
E-mail: Francisco. [e-mail]
E-mail: [e-mail]
E-mail: [e-mail]
www.telefonica.es


TELEFONICA INTERNACIONAL GROUP

Consolidated Income Statement Full Consolidation

(million euros)                            January-September
Unaudited figures             Group(1)      %Change   Telesp+    Total %Change
                                1999   1998  Sept 98  TeleSudeste Group Sep 98
                                                         (2)       (3)
+Operating Revenues           4.213.4 4.058,7   3,8    2.605,1  6,818.5   68,0
+Internal expend capitalized    115.7    79,5  45,6       57,3    173,0  117,5
  in fixed assets (4
- Operating expenses          2.082,0 1.684,8  23,6    1.444,8  3.526,8  109,3
+ Other operating income 
   (expense), net              (209,0) (252,0) 17,1      (44,6)  (253,6)   0,6
=EBITDA                       2.038,1 2.200,6  (7,4)   1.173,0  3.211,1   45,9
-Depreciation & amortization    906,1   851,0   6,5      745,6  1.651,7   94,1
=Operating Profit             1.132,0 1.349,6 (16,1)     427,4  1.559,4   15,5
+Profit from associated 
   companies                     34,6    66,2 (47,7)     (25,7)     8,9  (86,6)
+Financial income(expense),net (545,8) (527,2) (3,5)    (104,9)  (650,7) (23,0)
- Amortization of goodwill      165,2    64,6 155,7        0,0    165,2  155,7
+ Extraordinary income 
   (expense), net              (117,1)   96,5  c.s       (27,9)   144,9   c.s
=Income before taxes            338,5   920,5 (63,2)    (268,9)   607,5  (34,0)
-Income taxes                   (51,4) 305,4   c.s        13,1    (38,3)  c.s.
=Net Income before 
  minority interests            389,9  615,1  (36,6)     255,8    645,8    4,9
-Minority interests             258,1  494,8  (47,8)     255,8    513,9    3,9
=Net Income                     131,8  120,3    9,4        0,0    131,9    9,4

(1) Telefonica S.A. including TASA, CTC, Telefonica del Peru, Publiguias and TLD
fully consolidated; other Latinamerican subsidiaries consolidated by the equity
method.
(2) Impact of Telesp Participacoes and TeleSudeste Participacoes full
consolidation.
(3) Telefonica SA Including Telesp Participacoes, Tele Sudeste Participacoes,
TASA, CTC, Telefonica del Peru, Publiquias and TLD fully consolidated; other
Latinamerican

TELEFONICA S.A. CONSOLIDATED INCOME STATEMENT

TELEFONICA INTERNACIONAL'S  OPERATING SUBSIDIARIES CONS0LIDATED BY EQUITY METHOD
        
(million euros)
Unaudited figures            January-September     %     June-September    %
                             1999        1998   Change   1999     1998   Change

Operating Revenues           9.857,7  8.990,8    9,6    3.463,7  3.045,4  13,7
+ Internal expend capitalized 
  in fixed assets (1)          410,4    470,8  (12,8)     107,4    168,5 (36,3)
- Operating expenses         5.215,9  4.408,2   18,3    1.922,4  1.463,8  31,3
     Supplies                1.594,7  1.217,2   31,0      607,1    440,3  37,9
     Personnel expenses      2.109.1  2.273,8   (7,2)     728,8    758,3  (3,9)
     Subcontracs             1.354,4    782,1   77,7      537,2    214,0 151,1
     Taxes                     157,7    155,1    1,7       49,3     51,2  (3,7)
+ Other operating income 
   (expense), net                4,9    (35,4)  c.s.        6,6    (10,9)  c.s.
=EBITDA                      5.057,1  5.018,0    0.8    1.655,3  1.739,2  (4,8)
-Depreciation & amortization 2.807,1  2.446,9   14,7      905,6    839.8   7,8
=Operating Profit            2.250,0  2.571,1  (12,5)     749,7    899,4 (16,6)
+Profit from associated 
  companies                      9,9    195,7  (95,0)     (48,6)    85,3   c.s.
+Financial income (expense)
      net                     (517,8)  (693,3)  25,3     (194,9)  (248,2) 21,5
-Amortization of goodwill      194,4    206,0   (5,6)      74,4     24,9 198,8
+Extraordinary income 
  (expense), net               196,4   (586,8)  c.s.      (61,7)  (194,6) 68,3
=Income before taxes         1.744,1  1.280,6   36,2      370,1    517,0 (28,4)
-Income taxes                  325,4    298,7    8,9      (28,0)   125,0   c.s.
=Net Income before 
    minority interests       1.418,7    981,9   44,5      398,1    392,0   1,6
-Minority interests              4,9      0,2   n.s.        4,3      0,0   n.s.
=Net Income                  1.413,8    981,7   44,0      393,8    392,0   0,4

Outstanding shares 
   (million) (2)             3.198,0  3.074,6    4,0    3.198,8  3.074,6   4,0
 Per share                      0,44     0,32   38,4       0,12     0,13  (3,4)

(1) Including work in process
(2) Number of shares at the end of the period, after the split (3xl)

               TELEFONICA, S.A. CONSOLIDATED BALANCE SHEET

   TELEFONICA INTERNACIONAL'S OPERATING SUBSIDIARIES CONSOLIDATED BY
                              EQUITY METHOD

(million euros)
Unaudited figures                           January-September        %
                                           1999           1998      Change

Subscribed shares not paid-in                3,5            3,4       1,9
Long term assets                       31.110,7       29.437,3       5,7
 Star up expenses                          98,1           98,1       0,0
 Intangible net assets                  6.078,8        6.129,9      (0,8)
 Fixed net assets                      17.016,7       17.973,8      (5,3)
 Investments                            7.917,1        5.235,5      51,2
Goodwill on consolidation               3.084,3        1.825,9      68,9
Deferred expenses                         579,2          705,8     (17,9)
Current assets                          4.659.5        3.945,3      18,1
 Inventories                              243,7          229,8       6,0
 Accounts receivable                     3.404,4        3.075,7      10,7
 Short term investments                   899,7          565,1      59,2
 Cash and banks                            11,1           15,1     (26,3)
 Others                                   100,6           59,6      68,2
Assets=Liabilities                     39.437,2       35.917,7       9,8

Shareholders, equity                   14.273,5       15.134,8      (5,7)
Minority interests                         36,9           12,0     207,8
Deferred income                           768,3          755,8       1,7
Provisions for risks and expenses       6.042,6        2.510,2     140,7
Accrued taxes payable                     374,7          266,9      40,4
Long term debt                         10.419,5        9.672,7       7,7
Short term debt including current 
   maturities                           2.605,9        4.307,7     (39,5)
Interest payable                          209,2          239,5     (12,6)
Other creditors                         4.706,6        3.018,1      55,9

Financial Data

Consolidated net debt (1)              12,115        13,400      (10,0)
Consolidated debt ratio (2)                43,9%       45,3%(   1.4 p.p.)

(1) Net debt: Long term debt + Short term debt including current maturities
- Short term Investments - Cash and banks.
(2) Debt ratio: Net debt/Shareholders Equity + Minority interests + Deferred
income + Accrued taxes payable + Net debt.

TELEFONICA DE ESPANA GROUP

(Million euros)                  January-September   %    June-September  %
Unaudited figures               1999      1998   Change  1999     1998  Change

+ Operating Revenues           7.461,9  7.256,3   2,8    2.448,1 2.416.1   1,3
 Telefonica de Espana          7.237,8  7.116.9   1,7    2.368,1 2.360,8  (0,1)
  Others and eliminations        224,1    139,4  60,8       90,0    55,3  62,7
+internal expend capitalized 
  in fixed assets (1)            263,6    311,1 (15,3)      89,4   107,9  17,2
-Operating expenses            3.858,4  3.628,4   6,3    1.356,8 1.210,1  12,3
+Other operating income 
     (expense), net               14,0     (6,8)  c.s.       0,8     0,6  33,3
=EBITDA                        3.881,1  3.932,2   1,3    1.181,7 1.314,5 (10,1)
-Depreciation & amortization   2.392,9  2.067,3  15,8      767,7   694,7  10,6
=Operating Profit              1.488,2  1.864,9 (20,2)     414,0   619,8 (33,2)
+Profit from associated 
   companies                      (0,6)     0,6   c.s.      (0,2)    0,1  c.s.
+Financial income (expense), 
       net                      (472,0)  (478,5)   1,4    (156,5) (138,5)(13,0)
-Amortization of goodwill          2,5      0,1   n.s.       0,0     0,0  n.s.
+Extraordinary income 
  (expense), net                (347,2)  (632,0)  45,1     (45,8) (185,7) 75,4
=Income before taxes             665,9    754,9  (11,8)    211,5   295,7 (28,5)
-Income taxes                    154,4    105.9   45,8      49,3    41,4  19,0
=Net Income before minority 
   interests                     511,5    649,0  (21,2)    162,2   254,3 (36.3)
 -Minority interests               (0,3)    (0,3)   0,0      (0,1)   (0.1)      
 n.s. 
= Net Income                      511,8    649,3  (21,2)    162,3   254,4(36,3)

(1) Including work in process

TELEFONICA DE ESPANA (INDIVIDUAL) OPERATING REVENUES

(Million euros)                  January-September   %    June-September  %
Unaudited figures               1999      1998   Change  1999     1998  Change

Revenue derived from usage     4.596,5 4.651,9   (1,2)  1.481,9 1.534,4  (3,4)
 Local                         1.245,7 1.089,1   14,4     387,9   361,8   7,2
 Provincial                      465,3   519,8  (10,5)    146,4   167,5 (13,2)
Domestic long distance           982,2 1.278,0  (23,1)    297,7   387,7 (23,2)
International long distance 
  (outgoing) (1)                 352,3   318,6   10,6     134,4   107,4  25,1
Fixed to mobile                1.010,6   825,9   22,4     359,7   303,7  18,4
Interconnection International 
 (incoming)                      184,4   209,4  (11,9)     57,0    72,7 (21,5)
Interconnection national 
operators (1)                    250,7   186,2   34,7      55,5    72,1 (23,1)
 Rest                            105,2   224,9  (53,2)     44,4    81,4 (27,7)
Monthly fee                    2.200,2 1,983,9   10.9     733,3   666,7  10,0
Connection fee                   180,9   163,0   11,0      59,0    58,8   0,6
Customer equipments               70,6   126,9  (44,4)     24,4    40,2 (39,3)
Others (2)                       189,6   191,2   (0,8)     59,6    60,8  (2,1)
TOTAL OPERATING REVENUES       7.237,8 7.116,9    1,7   2.358,1  2,360,8 (0,1)

(1) Net of foreign participation
(2) Including special services, IRIS services and others
                                  
                                                         September      %
OPERATING DATA                                      1999         1998   Change

Lines instaled (thousands) (1)                     16.952      16.723     1,4
Lines In service/100 inhabitants (2)                 47,5        45,5     4,4
Incoming international traffic (mill. minutes)(3)   1.556       1.321    17,8
Outgoing international traffic (mill. minutes)(3)   1.434       1.262    13,6
Usage growth (minutes/line/day)                       9,8%      11,6% (1,8p.p.)
Fixed network outgoing traffic                        5,0%       9,4% (4,4p.p.)
Interconnection traffic with international operators 12,3%       9,7%  2,6p.p.
Interconnection traffic with domestic operators      79.5%      62,6% 16,9p.p.
Employees                                          51.366      59.085    (13,1)
Lines/employee (2)                                  368,9       502,3     22,0

(1) Marketable basic telephony lines
(2) Basic telephony lines (including public telephones, Ibercom, ISDN and
    connections lines with PABX)
(3) Estimated figures, Special services included

                 TELEFONICA SERVICIOS MOVILES GROUP

Consolidated Income Statement

(million euros)                                   January-September        %    
Unaudited figures                                 1999         1998     Change 
+ Operating Revenues                           2.673,1      2.030,6       31,6
+ Internal expand capitalized in fixed assets     35,3         22,0       60,7
- Operating expenses                           1.674,6      1.112,8       50,5
+ Other operating income (expense), net          (29,3)       (37,7)      22,3
= EBITDA                                       1.004,5        902,1       11,3
- Depreciation and amortization                  331,4        290,3       14,2
= Operating Profit                               673,1        611,8       10,0
+ Profit from associated companies                 0,0          0,0        n.s.
+ Financial income (expense), net                (35,4)       (45,7)      22,6
- Amortization of goodwill                         0,0          0,0        n.s.
+ Extraordinary income (expense), net             (3,8)       (19,4)      80,7
= Income before taxes                            633,9        546,7       16,0 
- Income taxes                                   214,2        179,9       19,1 
= Net Income before minority interests           419,7        366,8       14,4
- Minority interests                               0,0         (0,1)       c.s.
= Net Income                                     419,7        366,9       14,4

Consolidated Income Statement

(million euros)                                     June-September        %    
Unaudited figures                                 1999         1998     Change 
+ Operating Revenues                             999,1        752,7       32,7
+ Internal expand capitalized in fixed assets      9,6          8,4       14,4 
- Operating expenses                             595,5        409,2       45,5 
+ Other operating income (expense), net          (13,6)       (15,2)      10,5 
= EBITDA                                         399,6        336,7       18,7 
- Depreciation and amortization                  116,3         98,3       18,3 
= Operating Profit                               283,3        238,4       18,8 
+ Profit from associated companies                 0,0          0,0        n.s.
+ Financial income (expense), net                (10,5)       (14,4)      27,1 
- Amortization of goodwill                         0,0          0,0        n.s.
+ Extraordinary income (expense), net             (0,6)        15,2        c.s.
= Income before taxes                            272,2        239,2       13,8 
- Income taxes                                    91,9         81,5       12,7 
= Net Income before minority Interests           180,3        157,7       14,4 
- Minority interests                               0,0         (0,1)       c.s.
= Net Income                                     180,3        157,8       14,3  

SELECTED OPERATING DATA                               September           %
                                                 1999          1998     Change

Cellular subscribers                        7.699.732     4.174.654       84,4
  MoviLine                                    768.874       893.383      (13,9)
  MoviStar                                  6.930.858     3.281.271      111,2

Net adds (a)                                2.805.468       986.958      184,3
  MoviLine                                   (124.318)     (207.212)      40,0
  MoviStar                                  2.929.786     1.194.170      145,9

Penetration TM (b)                              19,3%         10,6%    8,7 p.p.
Total airtime minutes, in million (a)          9.621         5.733        67,8
Employees                                      3.272         2.729        19,9

                          TELEFONICA INTERNACIONAL GROUP

Consolidated Income Statement

(Million euros)                                      January-September      %  
Unaudited figures                                    1999        1998    Change 
+ Income from Investments                           201,3       345,2    (41,7) 
 Equity Income                                      83,4       259,3    (67,8)  
   CTC                                            (14,1)       65,4      c.s  
     COINTEL/TASA                                    65,3        86,0    (24,1) 
    Telefonica del Peru                             41,2        68,5    (39,8)  
   Telesp Participacoes                            25,0         9,4    167,4    
  CRT Fija                                       (16,1)       12,8      c.s.    
 CRT Celular                                     (5,5)          -      n.s.     
Telesp Celular Participacoes                     3,2         3,9    (17,4)
     TeleSudeste Celular Partic.                      0,9         l,l    (15,2) 
    TeleLeste Celular Participacoes                 (2,9)        0,3      n.s.  
   Publiguias                                       4,6         6,4    (28,3)   
  CANTV                                            6,5        10,4    (37,7)    
 Otras                                          (24,8)       (4,8)    n.s. 
Management fee                                      117,8        85,9     37,2  
 Operating expenses                                363,7       263,0     38,3   
  Net financial expenses                          222,8       171,4     30,0    
 Goodwill amortization                            55,4        48,4     14,5     
Intangible assets amortization                   85,5        43,2     97,9    
=Operating profit                                  (162,4)       82,2      c.s. 
+Divestitures                                        74,2       135,4    (45,2)
+Other income (expense) net                         (63,8)      (97,2)    34,3 
-Taxes                                              283,7         0,0      n.s. 
 
=Net Income                                         131,8       120,3      9,4  
 
                           TELEFONICA INTERNACIONAL GROUP

Consolidated Income Statement

(Million euros)                                      June-September      %  
Unaudited figures                                    1999        1998    Change 
+ Income from Investments                            28,9       121,6    (76,2)
  Equity Income                                     (12,1)      107,4      c.s.
     CTC                                            (27,2)       39,5      c.s. 
    COINTEL/TASA                                    17,0        22,4    (24,4)  
   Telefonica del Peru                              9,8        15,7    (37,5)   
  Telesp Participacoes                             9,5         9,4      1,5     
 CRT Fija                                        (1,1)        7,2      c.s.     
CRT Celular                                     (0,1)          -      n.s.     
Telesp Celular Participacoes                    (0.6)        3,9      c.s.
     TeleSudeste Celular Partic.                     (0,9)        l,l      c.s  
   TeleLeste Celular Participacoes                  (2,1)        0,3      c.s.  
   Publigulas                                       2,2         7,6    (70,9)   
  CANTV                                            1,7         2,5    (29,0)    
 Otras                                          (20,3)       (2,1)     n.s. 
Management fee                                      41,0        14,2    188,0   
Operating expenses                                131,2        97,5     34,6    
 Net financial expenses                           83,6        88,3     (5,4)    
Goodwill amortization                            18,7       (11,1)     c.s.    
Intangible assets amortization                   29,0        20,3     42,7    
=Operating profit                                  (102,3)       24,1      c.s. 
+Divestitures                                         3,5        27,7    (87,3)
+Other income (expense) net                           1,4       (29,0)     c.s.
-Taxes                                              107,9         0,0      n.s. 
 
=Net Income                                          10,6        22,8    (53,6) 

                                TELEFONICA INTERNACIONAL GROUP
Thousands

Operating Data                    Lines in Service
                                   
                                            %Change          Proport.
                                  Sep-99      99/98        % Partic. (*)


Managed Operators                 17.540     13,1           4.453
CTC                                2.672      2,5           1.166
TASA                               3.934     (1,0)          1.070
Telefonica de Peru                 1.668      7,7             608
Telesp + CTBC                      7.658     26,8           1.339
CRT                                1.600     19,9             267
CRT Celular
TeleSudeste Celular Par.
TeleLeste Celular Par.
Telefonica El Salvador                 7      n.s.              3
Financial participations           2.578     (6,6)            165
CANTV                              2.578     (6,6)            165
Telesp Celular Par.
Cablevision
TOTAL                             20.119     10,1           4.618


                                Cellular subscribers           Pay TV customers
                                  %Change  Proport.           %Change Proport.
                           Sep-99  99/98  % Partic.(*) Sep-99 99/98 %Partic.(*) 

Managed Operators          5.891   168,9   1.671         589   0,2     234
CTC                        1.021   118,8     446         269  (3,7)    117
TASA                       1.250    56,9     340        
Telefonica de Peru           667    44,0     243         320   3,7     117
Telesp + CTBC
CRT
CRT Celular                  816    75,7     287     
TeleSudeste Celular Par.   1.573   147,6     276
TeleLeste Celular Par.       470    97,6      42
Telefonica El Salvador        93              36
Financial participations   3.337    55,5     225       1.451   4,4     521
CANTV                        961    73,8      62 
Telesp Celular Par.        2.376    49,2     164
Cablevision                                            1.451  (4,4)    521
TOTAL                      9.228   112,8    1.897      2.040  (3,1)    755

(*) Lines weighted by TISA's economic participation in each the companies


                         TELEFONICA DATA GROUP

Consolidated Income Statement

(Million euros)               January-September  %     June-September    %     
Unaudited figures             1999     1998   Change  1999    1998    Change

+ Operating Revenues          432,3   334,4   29.3    151,5   116,4   30,1
+ Internal expend capitalized 
in fixed assets (1)             0,3    15,3  (98,2)     0,6    11,0  (94,4)
- Operating expenses          339,2   297,0   14,1    111,0   107,2    3,6
+ Other operating income 
(expense), net                  0,6    (1,3)  c.s.      0,3    (0,4)   c.s.
= EBITDA                       94,0    51,4   83,4     41,4    19,8  108,1
- Depreciation and amortization47,8    47,2    1,1     15,3    16,2   (5,4)
= Operating Profit             46,2     4,2    n.s.    26,1     3,6    n.s.
+ Profit from associated 
  companies                     2,3     1,4   66,1      1,7     0,8  111,8
+ Financial income (expense),
  net                          (1,9)   (2,3)  17,1     (0,2)   (0,8)  77,0
- Amortization of goodwill      2,2     0,1    n.s.     2,2     0,1    n.s.
+ Extraordinary income 
  (expense), net               (0,2)    0,6    c.s.    (0,2)    0,5    c.s.
= Income before taxes          44,2     3,8    n.s.    25,2     4,0    n.s.
- Income taxes                 15,5     0,0    n.s.     9,0     0,4    n.s.
= Net income before minority 
  Interests                    28,7     3,8    n.s.    16,2     3,6    n.s.
= Minority interests            0,0     0,0    n.s.     0,0     0,0    n.s.
= Net Income                   28,7     3,8    n.s.    16,2     3,6    n.s.

(1) Including work in process

SELECTED OPERATING DATA           September         %
                              1999       1998    Change

Connections (dedicated ports) 110.484   104.548    5,7
IP Network (switched ports)    36.270    16.740  116,7
Employees                         830       610   36,1

TPI-PAGINAS AMARILLAS GROUP

Income Statement
(Million euros)           January-       %      June-         %
                          September             September 
Unaudited figures         1999    1998   Change 1999  1998  Change

+ Operating Revenues      191,9   143,0   34,2   96,2  85,4  12,7
- Operating expenses      132,1   101,0   30,7   49,7  35,1  41,4
+ Other operating income 
  (expense), net            1,0     0,8   23,8    2,8   2,3  21,3

= EBITDA                   60,9    42,8   42,2   31,2  28,4   9,7

- Depreciation and 
 Amortization               4,9     7,5  (35,3)   1,9   2,6 (28,9)
= Operating Profit         56,0   35,3    58,7   29,3  25,8  13,6
+ Profit from associated 
   companies                0,0    0,0     n.s.   0,0   0,0   n.s.
+ Financial income 
  (expense), net           (0,2)   0,7     c.S.  (0,1)  0,4   c.S.
- Amortization of goodwill  0,0    0,0     n.s.   0,0   0,0   n.s.
+ Extraordinary income 
  (expense), net           22,5    0,6     n.s.   0,0  (0,7)  n.s.

= Income before taxes      78,3   36,5   114,3   29,2  25,4  14,7

- Income taxes             23,7   13,0    82,8   10,2   9,1  12,6
= Net income before 
   minority interests      54,6   23,6   131,5   19,0  16,4  16,0
- Minority interests        0,0    0,0     n.s.   0,0   0,0   n.s.
= Net Income               54,6   23,6   131,5   19,0  16,4  16,0   
 

SELECTED OPERATING DATA                    September -  %
                                           1999   1998  Change

Books (published)
 Paginas Amarillas (Yellow Pages)           42      40    5,0
 Paginas Blancas (White Pages)              30      19   57,9
Subscribers
 Paginas Amarillas (Yellow Pages)      230.335 229.077    0,5
 Paginas Blancas (White Pages)         131.769   8.117    n.s.
Advertising revenues
 Paginas Amarillas (Yellow Pages)        124,1   108,3   14,6
 Paginas Blancas (White Pages)            50,6    33,8   49,9
 Paginas Amarillas on Line                 1,3     0,1    n.s.
 Paginas Amarillas Habladas                0,7     0,0    n.s.
 Europages                                 1,2     0,8   48,9

TELEFONICA MEDIA GROUP

Consolidated Income Statement(1)
(million euros)         January-       %       June-         %
                        September              September 
Unaudited figures       1999    1998  Change   1999    1998 Change

Profit from associated 
 companies             (73,9)  (74,0)    0,2   (43,3) (31,7)(35,6)
 Antena 3               24,2    (0,1)    c.s.   (0,9)   1,0   c.s.
 Via Digital           (66,7)  (60,4)  (10,6)  (27,0) (18,4)(46,9)
 Telefonica Servicios 
  Audiovisuales          4,5     2,5    85,3     1,4    0.3 448,8
 Telefonica Medios 
  de Comunicaclon      (30,9)  (20,6)  (50,0)   (8,4) (16,7) 49,7
 Otros y ajustes        (5,0)    4,6     c.s.   (8,4)   2,1   c.s.
- Operating expenses    37,0    27,0    37,5    14,4   10,8  33,8
    Net financial 
     expenses           18,3     8,2   124,4     7,1    4,2  71,5
    Goodwill 
     amortization       18,7    18,8    (0,3)    7,3    6,6  10,1
= Operating profit    (110,9) (101,0)   (9,9)  (57,7) (42,5)(35,1)
+ Divestitures           0,0     0,0     n.s.    0,0    0,0   n.s.
+ Other income 
   (expense), net      (11,2)   (2,3) (379,7)   (7,4) (1,5)(383,8)
- Taxes                (39,9)  (19,5) (104,4)  (22,8) (7,9)(189,0)
= Net income           (82,2)  (83,8)    1,9   (42,3)(36,1) (16,3)

(1) Consolidated by equity method

TERRA

Consolidated Income Statement (1)
(million euros)            January-September    January-September 
Unaudited figures          1999        %        1999        %

Financial Data (a)
Operating revenues          8.6      192,7       5,7      511,0
EBITDA                    (35,4)       n.s.    (24,4)       n.s.
Net Income                (33,9)       n.s.    (26,3)       n.s.
Financial Data 
 'primary' (b)
Operating revenues         17,5        n.s.      9,2        n.s.
Net Income                (38,5)       n.s.    (16,7)       n.s.
Financial Data 
 proforma (c)
Operating revenues         48,0        n.s.     17,9        n.s.

Operating Data                  September        June
ISP Customers                     861.747        368.407
Page views, in millions (june)        290            250
Visits per month, in millions (june) 22,1           17,5

(a) Including Terra subsidiaries' financial data since their acquisition date
(b) Including all Terra's subsidiaries at September 30th, plus those
subsidiaries acquired from Telefonica S.A. Group, regardless whether the
acquisition took place after this date
(c) Including all Terra's subsidiaries at the floatation date, as if these
transactions occurred on 1/1/99

  
APPENDIX

TELEFONICA, S.A. CONSOLIDATED INCOME STATEMENT

(million euros)                                            
Unaudited figures
                                        January-September
                                                         
                            Equity      Change (2).  Impact TISA excl.
                            method (1)  Sep-98       Telesp. Participacoes
                             1999                    & Telesudest Part (3) 1999 

+ Operating Revenues        9.857,7      9,6                    4.036,6
+ Internal expend 
capitalized In fixed 
assets (7)                    410,4     (12,8)                    153,1
- Operating expenses        5.215,9      18,3                   1.931,5
     Supplies               1.594,7      31,0                     360,1
    Personnel expenses      2.109,1      (7.2)                    715,5
    Subcontracts            1.354,4      77,7                     749,9
    Taxes                     157,7       1,7                      86,0  
+ Other Operating income 
(expense), net                  4,9       c.s                    (313,5)   
= EBITDA                    5.057,1       0,8                   1.944,7
- Depreciation and 
amortization                2.807,1      14,7                     871,2 
= Operating Profit          2.250,0     (12,5)                  1.073,5  
+ Profit from associated 
companies                       9,9     (95,0)                    (21,7)
+ Financial Income (expense),
net                          (517,8)     25,3                    (509,5)
- Amortization of goodwill    194,4      (5.6)                     25,5 
+ Extraordinary income 
(expense), net                196,4       c.s                     (58,5)   
= Income before taxes       1.744,1      36,2                     458,3 
- income taxes                325,4       9,0                     223,6 
= Net income before minority 
interests                   1.418,7      44,5                     234,7
- Minority interests            4,9       n.s                     234,7 
= Net income                1.413,8      44,0                       0,0

 Outstanding shares 
 (million) (8)              3.198,8       4,0
Per share                      0.44      38,4


                           Group (4)               %       Telesp +
                             1999       1998     Change    TeleSudeste (5)      
                                                sep-98

+ Operating Revenues       13,894.3    12,910.0   7.6        2,605,0
+ Internal expend 
capitalized In fixed 
assets (7)                    563,5       568,8   (0,9)         57,3
- Operating expenses        7.147,4     9.958,5   20,0         1.444,7
     Supplies               1.974,8     1.434,9   37,6           684,2
    Personnel expenses      2.824,6     2.950,8   (4,3)          357,9 
    Subcontracts            2.104,3     1.358,1   54,9           387,3
    Taxes                     243,7       214,7   13,5            15,3  
+ Other Operating income 
(expense), net               (308,6)     (390,3)  20,9           (44,6)
= EBITDA                    7.001,8     7.130,0   (1,8)        1.173,0
- Depreciation and 
amortization                3.678,3     3.270,3   12,5           745,6 
= Operating Profit          3.323,5     3.859,7  (13,9)          427,4    
+ Profit from associated 
companies                     (11,8)       18,0    C.S.          (25,7)
+ Financial Income 
  (expense),net            (1.027,3)   (1,052,7)   2,4          (105,0)        
- Amortization of goodwill    219,9       179,2   22,7             0,0 
+ Extraordinary income 
(expense), net                137,9      (611,3)  c.s.           (27,9) 
= Income before taxes       2.202,4     2.034,5    8,3           268,8 
- income taxes                549,0       587,6   (6,6)           18,1 
= Net income before minority 
interests                   1.653,4     1.446,9   14,3           255,7
- Minority interests          239,5       465,2  (48,5)          255,7 
= Net income                1.413,8       981,7   44,0             0,0

                             Total Group         % Change
                               (6)                Sept 98

+ Operating Revenues           16.499,3           27,8
+ Internal expend                 
capitalized In fixed 
assets (7)                        620,8            9,1
- Operating expenses            8.592,1           44,2
    Supplies                    2.659,0           85,3                          
   Personnel expenses          3.182,5            7,9
    Subcontracts                2.491,6           83,5
    Taxes                         259,0           20,6  
+ Other Operating income 
(expense), net                   (353,2)           9,5
= EBITDA                        8.174,8           14,7
- Depreciation and 
amortization                    4.423,9           35,3
= Operating Profit              3.750,9           (2,8)  
+ Profit from associated 
companies                         (37,5)           c.s.
+ Financial Income (expense),
net                            (1,132,3)          (7,6)
- Amortization of goodwill        219,9           22,7  
+ Extraordinary income 
(expense), net                    110,0           n.s.   
= Income before taxes           2.471,2           21,5 
- income taxes                    562,1           (4,3) 
= Net income before minority 
interests                       1.909,1           31,9
- Minority interests              495,3            6,5 
= Net income                    1.413,8           44,0                     

Outstanding shares (million)(8) 3.198,8            4,0
Per Share                           0,44          38,4

(1) Telefonica Internacional's operating subsidiaries consolidated by the
equity method. 
(2) Change calculated over September 1998 pro-forma Income statement
including Latinamerican subsidiaries consolidated by equity method.
(3) Impact of TASA, CTC, Telefonica del Peru, Publigulia and TLD full
consolidation.
(4) Telefonica S.A.including TASA,CTC, Telefonica del Peru, Puibligulas and TLD
fully consolidated; other Latinamerican subsidiaries consolidated by the equity
method.
(6) Te1etonica S.A. Including Telesp Participacoes, Tele Sudeste Participacoes,
TASA, CTC, Telefonica del Peru, Publigulas and TLD fully consolidated: other
Latinamerican subsidiaries consolidated by the equity method
(7) Including work in process.
(8) Number of shares at the end of period, including split (3xl)