Re Agreement

Telefonica SA
19 December 2000


TELEFONICA DATACORP SIGNS STRATEGIC AGREEMENT WITH AMERICA ONLINE

Madrid, Spain, December 19, 2000 - Telefonica DataCorp, the Telefonica Group
subsidiary that provides global telecommunications services to companies, today
announced a strategic agreement with America Online Inc., the world's leading
interactive services company, by which Telefonica DataCorp will become a part
of AOL's portfolio of providers, offering variety of services to several of
America Online, Inc.'s global brands.

Under the multi-year, multi-million dollar accord, Telefonica DataCorp will
supply network services to a number of America Online companies in key markets
in Europe and Latin America. As part of the agreement Telefonica DataCorp will
provide dial-up access and network backbone capacity through Telefonica Data's
International Network.

Antonio Viana-Baptista, executive chairman of Telefonica DataCorp, said, 'With
this agreement, Telefonica DataCorp has taken an important step in our strategy
of providing data services to the corporations of the New Economy and of further
expanding our global presence. We're delighted to work with a global leader like
America Online'.

'The combination of America Online's convenient access and easy-to-use
interactive features with Telefonica DataCorp's strong presence in a number of
key markets will help us further enhance the online experience for millions of
users of AOL's services worldwide.' said Geraldine MacDonald, Senior Vice
President of Global Access for America Online.

About America Online, Inc.

Founded in 1985, America Online, Inc., based in Dulles, Virginia, is the world's
leader in interactive services, Web brands, Internet technologies and e-commerce
services.

About Telefonica DataCorp

Telefonica DataCorp, subsidiary of the Telefonica Group, is the leader in the
offer of telecommunications global services for enterprises. Actually, the
company is expanding internationally, developing activities in countries such
as Argentina, Brazil, Chile, Colombia, Uruguay, Peru, Mexico and Puerto Rico,
and the United States. Telefonica DataCorp is also present in Spain, Austria,
and Italy.

For further information
Direccion de Comunicacion
Press Office                                    Tel: + 34 91 584 09 20
Gran Vla, 28 - 3a Planta                        Fax: + 34 91 532 71 18
28013 - MADRID                                e-mail: [e-mail]