Capital Increase

Telefonica SA
19 June 2001


                            A SIGNIFICATN EVENT


'TELEFONICA, S.A.', in accordance with that set forth in article 82 of the Stock
Market Law, by way of this document hereby announces the following Significant
Event:

The capital increase amounting to Euros 174,700,000, approved by the General
Shareholders' Meeting of 'TELEFONICA, S.A.' held on June 15th 2001, has today
been executed.

The subscription to this capital increase has been declared incomplete, with
122,560,575 'TELEFONICA, S.A.' shares of a nominal value of one (1) Euro each
having been subscribed to, and therefore totalling a nominal amount of Euros
122,560,575.

The issue premium has been set at Euros 4.5 per share. The effective amount for
the subscription therefore totals Euros 674,083,162.5.

Payment for the aforementioned 122,560,575 shares has been made to Telefonica,
S.A. through shares of the companies: Corporacion Integral de Comunicacion S.A.
de C.V., Grupo Corporativo del Norte S.A. de C.V., Telefonia Celular del Norte
S.A. de C.V., Celular de Telefonia S.A. de C.V., Baja Celular Mexicana S.A. de
C.V., Baja Celular Servicios Corporativos S.A. de C.V., Tamcel S.A. de C.V.,
Movitel del Noroeste S.A. de C.V., Movicelular S.A. de C.V. and Moviservicios,
S.A. de C.V.

Madrid June 18, 2001