Re Agreement

Telefonica SA
31 May 2001


Document Dated 30 May 2001

SPANISH STANDARD CREATED FOR MAKING
PAYMENTS VIA MOBILE HANDSETS

-  On  30 May, Telefonica Moviles, BBVA, BSCH and Airtel concluded  an agreement
   paving the way for the launch of a Spanish technological standard  for making
   payments via mobile handsets. AMENA has also confirmed its intention to join 
   the project.

-  Caja de Madrid, Banco Popular, Banesto, Banco Sabadell and Xfera  will also  
   be part of the agreement and will contribute their expertise in this field.

-  The  standard is intended to provide a safe and secure mechanism  for
   activating credit and debit cards, drawing on the expertise of existing      
   payment processing systems.

-  The  agreement entails integrating various projects already underway in      
   Spain  and  participation  will from the outset  be  open  to  all  financial
   institutions, mobile operators and payment processing companies active in    
   Spain, paving the way for possible future expansion into international       
   markets.

-  By  using  a  single technology, this agreement will allow  for  open
   competition  among  financial institutions for clients and  among  mobile    
   phone operators, for users.

Madrid,  30 May 2001- BSCH, BBVA, Telefonica, Moviles and Airtel have concluded
an  agreement  to  integrate  the  various projects  each  had  been  developing
individually in the field of Payments via mobile handsets. The new project will
from  the  outset  be open to all financial institutions, mobile  operators  and
payment processing companies active in Spain. Amena has also signed on  to  the
project  and  there  is  an agreement in principal to bring  on  various  other
organisations, including Caja de Madrid, Banco Popular, Banesto, Banco  Sabadell
and  Xfera.  Thus  the  agreement marks the creation of a Spanish  technological
standard, with a clear will for international expansion.

This  agreement takes Spain to the forefront in the development of new  business
models and co-operation between financial institutions and mobile operators  and
strengthens  its  leadership  in  the use of new  payment  system  technologies.
Likewise,  the  project is in line with the objective of the European  Union  to
strengthen advanced European solutions to lead the technological development  of
the information society.

The new standard is based on recognition of the role which mobile telephony will
play  in  consumers' daily life, making it an ideal tool for  providing  payment
platform  for their everyday expenses. It will make the transition to  the  euro
easier  and  makes it possible to provide in advanced payment system for  mobile
businesses (household deliveries, household repairs, etc). The new standard 
will extend the range of businesses which have used advanced payment methods to 
date and will open the door to the youngest segment of the population.

The security offered by the new system will make on-line shopping easier, give a
decisive boost to mobile businesses, and open huge business opportunities by
bringing together the advantages of mobile telephony and advanced payment
systems. It uses the mobile telephone to identify the account holder who can
confirm each transaction via a secret number, different to that used to activate
the telephone.

The parties to the agreement envisage that large credit card companies such as
VISA and Master Card will enter the agreement and the international company.

The agreement will result in the creation of two companies charged with     
establishing the standard in Spain and abroad, respectively. The project will
involve initial investment of close to seven billion pesetas (42.07 million
euros) and envisages the launch of a pilot service in the fourth quarter of this
year and the marketing launch before the end of the year.