Objectives for 2003-2006

Telefonica SA
10 April 2003

                            Antonio J. Alonso Ureba

                          Director, General Secretary

                    and Secretary of the Board of Directors

                               TELEFONICA S.A.






'TELEFONICA, S.A.', in accordance with that stated in article 82 of the
Spanish Stock Market Law ( Ley del Mercado de Valores) hereby informs of the
following:




                               SIGNIFICANT EVENT


At the press conference held today, April 10th, 2003, prior to Annual General
Shareholders' Meeting, the Chairman of the Company has announced Telefonica's
objectives for the period 2003-2006, which are framed within a strategy of
profitable growth for the Company.



The objectives for 2006 are:

  • Improve the shareholder compensation policy.

  • Enlarge the customer base to over 100 million.

  • Pass the 5 million ADSL customers mark.

  • Consolidate the Telefonica Group's leadership in the Spanish and
    Portuguese speaking market.


  • Boost revenues by more than 50% in constant currency between 2002 and
    2006.

  • Keep EBITDA margin over 40%.

  • Achieve profits in all business lines in 2005.


  • Accumulate during the period 2003-2006 a free cash flow of more than 20
    billion euro.


  • Capacity to pay off financial debt within four years.


All of these targets are geared toward achieving a single ultimate objective of
achieving double-digit Return on Capital Employed in 2005, up from the 2002
figure of 7.4%.


In any event, the Company will make the presentation analysed in this press
conference available to the public by posting it on the Company website.

(www.telefonica.es/www.telefonica.com)

Madrid, April 10th, 2003




This document contains statements that constitute forward looking statements of
the Company or its management, including statements regarding the intent, belief
or current expectations of the customer base, estimates regarding future growth
in the different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.


Such forward looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those in the forward looking statements as a result of various factors.


Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this presentation.
Telefonica undertakes no obligation to release publicly the results of any
revisions to these forward looking statements which may be made to reflect
events and circumstances after the date of this presentation including without
limitation changes in Telefonica's business or acquisition strategy or to
reflect the occurrence of unanticipated events. Analysts and investors are
encouraged to consult the Company's Annual Report as well as periodic filings
made with the regulatory organisms.



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