P. Release Terra takeover bid

Telefonica SA
30 July 2003



               TELEFONICA CONCLUDES ITS TAKEOVER BID FOR TERRA


  • Telefonica will pay 5.25 euros for each of the 202 million shares that
    responded to the tender offer

On July 25th, 2003, Telefonica S.A. notified the Spanish National Securities
Market Commission ('Comision Nacional del Mercado de Valores'- CNMV) that it was
willing to waive the condition of a 75% minimum acceptance level to which its
public offer for the acquisition of Terra Networks shares was subject, taking
into consideration that the response received will be sufficient to develop the
business project pursued through the takeover bid.

According to the information released this same day by the CNMV, Telefonica had
obtained 33.6% of the shares of Terra Networks it did not already own,
guaranteeing it the ownership of 71.97% of the company's equity capital.

Telefonica will closed its takeover bid for Terra Networks with the payment of
5.25 euros for each of the 202 million shares that responded to the tender
offer.

At the close of the transaction, and according to the figures provided by the
CNMV, the equity capital of Terra Networks will be held, percentagewise, as
follows:



     Telefonica                              71.97%

     Shares under stock options plans         6.77%

     Free Float                              21.26%




                                                         Madrid, July 30th, 2003


                      This information is provided by RNS
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