Terra's acceptances tendered

Telefonica SA
25 July 2003




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 July 25th , 2003 notice of the Spanish National Securities
Market Commission (Comision Nacional del Mercado de Valores), the total number
of securities included in the acceptances tendered in the public tender offer
for shares of TERRA NETWORKS, S.A. has been 202,092,043 shares (33.60%),
bringing the direct interest held in the share capital after the offer to
71.97%.


Consequently, TELEFONICA, S.A. has decided to waive the minimum volume
requirement established as a condition for this tender offer and will therefore
acquire all of the securities tendered.




                                                        Madrid, July 25th , 2003


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