Trading of Terra Networks

Telefonica SA
28 June 2002



                            ANTONIO J. ALONSO UREBA

                               General Secretary

                    and Secretary of the Board of Directors

                               TELEFONICA S.A.


'TELEFONICA, S.A.', in accordance with that stated in article 82 of the
Spanish Stock Market Law hereby informs of the following:

In answer to the request for further information by the Spanish National
Securities Commission, following the statements made by the Chairman of
Telefonica to journalists at the close of the presentation in Madrid of the book
'The Information Society in Europe, Present and Outlook', (La Sociedad de la
Informacion en Europa. Presente y Perspectivas), it is hereby declared that:

As you are aware, the exclusion from trading of a quoted company corresponds to
a decision taken by this same company through the corresponding company organs,
in compliance with the Stock Market Regulations partially in force 'Royal Decree
1506/1967, of June 30, which approves the Stock Exchange Regulations' and which
also complies with 'Royal Decree 1197/1991, of July 26'. In this respect, the
Chairman of Telefonica, the company that holds a 37.63% stake in the quoted
company 'Terra Networks, S.A.' stated, in answer to the questions posed by
journalists, as mentioned above, that no intention exists to exclude Terra
Networks, S.A. from trading.


                                                        Madrid, June 28th , 2002



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