Interim dividend

Telefonica SA
02 November 2007




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


Pursuant to the resolution adopted by the Board of Directors of TELEFONICA,
S.A., at its meeting held on September 26th, 2007, we hereby inform all
shareholders that on November 14th, 2007, the Company will pay an interim
dividend from 2007 net income of a fixed gross amount of 0.35 euros for each
Company share issued, in circulation and carrying entitlement to this dividend.
This payment, in accordance with the applicable tax legislation, will be made as
follows:


       Gross dividend              Withholding tax rate (18%)    Net dividend
     (Euros per share)                 (Euros per share)       (Euros per share)

            0.35                             0.063                  0.287


The payment of this dividend shall be executed from November 14th, 2007, by
Banco Bilbao Vizcaya Argentaria, S.A., through the participating entities in
Iberclear (Sociedad de Gestion de los Sistemas de Registro, Compensacion y
Liquidacion de Valores, S.A.), the Spanish securities registrar, clearing and
settlement company.


Madrid, November 2nd, 2007


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