Distribution of Shares

Telefonica SA
17 October 2003


Further to the notification made on October 10th, 2003, 'Telefonica S.A.', and
in its name and behalf Mr. Antonio J. Alonso Ureba, General Secretary and
Secretary to the Board of Directors of the said company,


                                    NOTIFIES

That in relation to the extraordinary in-kind distribution to the Company
shareholders of part of the Additional Paid-in Capital Reserve by mean of
allocation of shares of 'Antena 3 de Television, S.A.' (Antena 3), and
subsequent to verification by the Spanish Securities Markets Commission
(Comision Nacional del Mercado de Valores) on October 17th, 2003 of the listing
for stock market trading of the Antena 3 shares, Telefonica would like to state
that the official announcement as per text attached hereto in the Official
Gazette of the Mercantil Register (Boletin Oficial del Registro Mercantil) will
not take place on the originally foreseen date, but on Monday October 20th,
2003.

Pursuant to the resolutions adopted by the Telefonica shareholders at their
Annual General Meeting held on April 11th, 2003, and in accordance with the
provisions of article 62 of the Spanish Stock Exchange Regulations (Reglamento
de Bolsas de Comercio) of June 30th, 1967, the holders of Telefonica shares as
at the close of the trading session on October 21st, (day following publication
of the said announcement) shall be entitled to receive the Antena 3 shares.


                                                      Madrid, October 17th, 2003



TEXT OF THE OFFICIAL ANNOUNCEMENT:


                                  TELEFONICA, S.A.

              Distribution of shares of 'Antena 3 de Television, S.A.'

It is hereby publicly announced that the Spanish Securities Markets Commission
(Comision Nacional del Mercado de Valores) has verified the listing for stock
market trading of the shares of 'Antena 3 de Television, S.A.' (ANTENA 3) on
October 17th, 2003, thereby fulfilling the condition precedent for the
resolution adopted by the shareholders of TELEFONICA, S.A. (TELEFONICA) in
the Annual General Meeting held on April 11th, 2003 regarding the extraordinary
in-kind distribution to the Company shareholders of part of the Additional Paid-
in Capital Reserve by means of allocation of shares representing 30% of the
share capital of ANTENA 3.

The shareholders are hereby informed of the details of this distribution:

1.- Shares to be distributed: The distribution will involve 30% of the share
capital of ANTENA 3, represented by a total of 16,666,800 shares.

2.- Class and name of the securities distributed: The securities to be
distributed are registered shares of ANTENA 3 common stock with a nominal value
of THREE EUROS (3 euros) each, fully paid up.

3.- Form of representation: The new shares are represented by the book-entry
system and shall be governed by the Spanish securities regulation. The entity
responsible for keeping the relevant accounts is the Spanish Management Company
of Securities Registration, Clearing and Settlement Systems (Sociedad de Gestion
de los Sistemas de Registro, Compensacion y Liquidacion de Valores, S.A. -
IBERCLEAR), together with its participating entities.

4.- Shareholders entitled to participate in the distribution: The right to
receive the ANTENA 3 shares rests with the holders of TELEFONICA shares as at
the close of the trading session on October 21st , the day following publication
of this announcement in the Official Gazette of the Mercantil Register (Boletin
Oficial del Registro Mercantil or 'BORME').

5.- Exchange ratio: In accordance with the provisions of article 79.1 of the
Spanish Law of Corporations (Ley de Sociedades Anonimas), after the ANTENA 3
shares which would correspond to the TELEFONICA own shares held as treasury
stock are proportionally distributed to the rest of the TELEFONICA shares,
the exchange ratio is set at one share of ANTENA 3 for every 295.60802997576
shares of TELEFONICA.

6.- Settlement of fractions: Those TELEFONICA shareholders entitled to a
fraction of an ANTENA 3 share as a result of applying the above exchange ratio
shall receive a cash payment for such fractions. The payments shall be made with
the involvement of the two financial institutions mentioned in the following
point, who shall make cash settlements for those fractions. For this purpose,
the ANTENA 3 shares have been assigned a value of 25.20 euros per share.

7.- Agents for the Distribution: 'Banco Bilbao Vizcaya Argentaria, S.A.'
(BBVA) and 'Caja de Ahorros y Pensiones de Barcelona, S.A.' ('la Caixa') shall
act as Agent Banks.

8.- Listing prospectus: ANTENA 3 has prepared a full prospectus relating to
the listing of all of its shares on the Madrid, Barcelona, Valencia and Bilbao
stock exchanges, and their inclusion in the Spanish Automated Quotation System
('sistema de interconexion bursatil'), according to the requirements laid down
in Spanish securities exchange laws. The prospectus has been verified and was
registered by the Spanish Securities Markets Commission on October 17th, 2003
and is available to the public at the registered office of ANTENA 3 (San
Sebastian de los Reyes, Avenida Isla Graciosa, 13, Madrid) and in the offices of
the Spanish Securities Markets Commission.

9.- Restrictions on participation: TELEFONICA shareholders are reminded,
for the relevant purposes, that the Spanish Private Television Act (Ley de
Television Privada) provides that individual or corporate shareholders of a
company holding a concession for a national public television service, as is the
case of ANTENA 3, shall not hold ownership interests in any other public
television service concessionaire company, regardless of its area of coverage.


Madrid, October 17th, 2003


Mr. Antonio Jesus Alonso Ureba
General Secretary and Secretary to the Board of Directors


                      This information is provided by RNS
            The company news service from the London Stock Exchange