Terra Tender Offer-suits

Telefonica SA
16 July 2003


In answer to the information requested by the Spanish National Securities Market
Commission (Comision Nacional del Mercado de Valores), Telefonica, S.A. would
like to announce that:


The Company has been made aware of the presenting of two collective suits
against it in the United States, regarding the acquisition offer for Terra
Networks, S.A. shares, for which authorisation was requested from the Spanish
National Securities Market Commission on May 28th. Telefonica was formally
informed of the first of these suits on June 5th, 2003, but of the second, no
official information has been received, to date, by the Company.


Despite the fact that Telefonica, S.A. did not consider this information to be
of relevance for the market, applying article 82 of the Spanish Stock Market Law
(Ley del Mercado de Valores), it has included a reference to this matter within
the detailed information on lawsuits and legal proceedings set forth in the
annual report on Form 20-F, registered in the United States on June 30th of this
year. This information will also be included in the corresponding continuous
informative prospectus currently being verified by the Spanish National
Securities Market Commission.


                                                         Madrid, July 16th, 2003



                      This information is provided by RNS
            The company news service from the London Stock Exchange