Integration agreement-Replcmt

Telefonica SA
30 January 2003




                            JOAQUIN DE FUENTES BARDAJI


                             General Vice- Secretary

                  and Vice-Secretary of the Board of Directors

                                TELEFONICA, S.A.


This is the same Significant Event as that published early today under RNS 8112G
but the paragraph 4th stated ' Sogecable will also offer its shareholders the
possibility of participating in a subordinated loan of Euros 175 million, at an
interest rate of 10.20%' and should have been 'Sogecable will also offer its
shareholders the possibility of participating in a subordinated loan of Euros
175 million, at an interest rate of 10.28%'. This release is in order to correct
this error.

Continuing from yesterday's announcement of a Significant Event, and in
compliance with that set forth in article 82 of the Spanish Stock Market Act
(Ley del Mercado de Valores), Telefonica S.A. would like to announce the
following


                               SIGNIFICANT EVENT



The agreement signed yesterday between Sogecable S.A. and Telefonica de
Contenidos, S.A.U., a subsidiary of Telefonica, S.A., sets forth the possibility
that the final stake to be held by the aforementioned company in the share
capital of Sogecable will exceed that held by Prisa and Groupe Canal +,
respectively, which, following the dilution derived from the operation, and
having carried out the exchange for 100% of the share capital of Via Digital,
will stand at 16.38% of the resulting share capital. Telefonica will renounce
its right to exercise the voting rights that would correspond to this excess in
stake. In this agreement, Telefonica also states that its current annual
strategic plans do not foresee the divestiture of the 16.38% stake previously
mentioned.

Telefonica will participate in the Board of Directors of Sogecable with five
directors, as will be the case of Prisa and Groupe Canal +.

In order to collaborate in the financing of the operation, Prisa, Groupe Canal +
and Telefonica will contribute with a participation loan of Euros 150 million,
with each of the parties holding Euros 50 million, at 10-year maturity, and an
annual interest rate of 11%.

Sogecable will also offer its shareholders the possibility of participating in a
subordinated loan of Euros 175 million, at an interest rate of 10.28%, whose
final underwriting will be undertaken by Telefonica. This subordinated loan will
mature at 9 years, and will include the yield of the warrant issue equal to 1%
of the share capital of Sogecable.

The parties have also agreed that Via Digital's indebtedness at April 30th,
2003, may not exceed Euros 425 million, and that that of Sogecable may neither
exceed, at this same date, Euros 705 million.

Once the accounting effect of the operation for Telefonica has been calculated,
the market will be duly informed.

                                                      Madrid, January 30th, 2003


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