Global Alliance

Telefonica SA
11 February 2000



              TELEFONICA AND BBVA, ANNOUNCE GLOBAL ALLIANCE

Telefonica S.A. today filed the following notice of corporate action  to
the National Securities Market Commission(CNMV):

Telefonica  and  Banco Bilbao Vizcaya Argentaria (BBVA)  have  signed  a
strategic  accord  in the areas of internet, e-commerce,  mobile services
platforms and means of payment.

*  The  alliance  puts  Telefonica and BBVA  in  a  unique  position  to
capitalize on business opportunities of an enormous size in these  areas,
guaranteeing rapid execution. At the same time, the leading  position  of
both  companies in their natural markets, their clear commitment  to  new
technologies,  the  strength of both industrial groups  and  their  broad
customer  base  in the same geographical areas allows them to  accelerate
the development of these initiatives, guaranteeing their success.

* In this context, the BBVA will increase, through purchases in the stock
market,  its  shareholding in Telefonica to up to 10% of  the  company's
share  capital. Telefonica will acquire, also in the market, up to 3%  of
BBVA. The incorporation of Juan Villalonga into the Board of Directors of
BBVA, as vice-chairman, is also foreseen.

* The alliance, which consist initially of 14 specific actions, contains
among its most important elements the increase of the shareholding of the
Telefonica Group in the internet bank Unoe.Bank from 20% to 49%  and  the
purchase  by BBVA of 40% of the business to business electronic  commerce
company Telefonica B2B, solidly positioning the two entities in these two
high-growth areas.

BBVA  will  integrate  the  conventional banking  activities,  trademark,
personnel, offices, operations and assets of the Banco de Comercio, which
later  will merge with the bank Unoe.Bank, SA., increasing the  number  of
on-line customers.

Additionally,  BBVA and Telefonica will develop joint  projects  for  the
development of new means of payment, both over fixed telephone lines  and
mobile  phone,  through the company Movilpago. They will create  specific
companies to develop wireless internet applications and BBVA will take up
to  5% in the consortium led by Telefonica to bid for UMTS licenses  in
Europe.


The  framework of today's accord also contemplates the  creation  of
companies for investment and joint development in the areas of electronic
commerce  between  businesses to consumers (B2C)  and  between  consumers
(C2C) the collaboration of both groups in the development of portals  and
interactive services, banking transactions and means of payment.

Another  action arising from the Alliance is the purchase  by  BBVA
of  a 20% stake in the share capital of Atento (until now wholly owned by
Telefonica), a company which is developing the 'call center' business  in
Europe,  the  US, and Latin America and which currently has  over  60,000
customer attention points. BBVA will transfer to Atento, S.A all  of  its
'call center,' activity.

BBVA  will  invest  up  to  US$200 million in  the  investment  fund
Communicapital Partners, led by Telefonica, whose purpose the investment
in start-up companies, based on the Internet and new technologies.

Telefonica  and BBVA are committed to coordinating their actions in the
company Hispasat, S.A. where they have a joint shareholding of about 40%.

Both  parties, BBVA and Telefonica, have agreed to offer to La Caixa
the  possibility of joining the alliance for the development of  some  of
the   business  lines,  in  which  the  contribution  of  an  outstanding
institution such as La Caixa could mean a more rapid development  of  the
agreed initiatives.

The  signing of this accord allows the two institutions to carry out
a  solid  expansion  in  Internet, electronic commerce,  mobile  services
platforms and means of payment, strengthening the position of both groups
in their natural markets.