Contracts Pegaso acquisition

Telefonica SA
6 May 2002








                               SIGNIFICANT EVENT



Telefonica Moviles, S.A., subsidiary of Telefonica, S.A., hereby informs, as
additional information to the significant event issued on March 7th, 2002, that
the Company and all the shareholders of the Mexican entity Pegaso
Telecomunicaciones, S.A. de C.V. ('Pegaso PCS') have executed the definitive
contracts for the acquisition by Telefonica Moviles, S.A. of approximately 65%
of the capital stock of Pegaso PCS.


The final closing of the transaction is subject to obtaining the necessary
approvals from the Mexican authorities.


The amount to be paid by Telefonica Moviles, S.A. for the 65% of Pegaso PCS is
US$ 87 million. The total value of Pegaso PCS has been fixed in US$ 1.360
billion, including the financial debt, other non financial liabilities and the
value of the equity of the company. From the total financial debt of Pegaso PCS
which amounts US$ 1.127 billion, US$ 603 million consists of long-term credits
provided by the vendors of the company. These amounts may vary depending on
certain adjustments, provided however that the maximum amount of US$ 1.360
billion may not be increased.


Telefonica Moviles, S.A. and the Pegaso Group (the Mexican shareholder which
will remain in the shareholding of Pegaso PCS) will assume the obligation of
carrying out a capital increase in Pegaso PCS for a minimum amount of
approximately US$ 326 million and a maximum amount of up to approximately US$
488 million, 65% of which will be subscribed by Telefonica Moviles, S.A.


Subsequently, the companies currently owned by Telefonica Moviles, S.A. in the
north of Mexico and Pegaso PCS would be integrated in a newly-formed entity. For
this purpose, both groups have agreed the respective valuations of the
contributions that imply that Telefonica Moviles, S.A. will own between 90% and
92% of the equity of such newly-formed entity, depending on the definitive
amount of the aforesaid capital increase in Pegaso PCS. The Pegaso Group would
own the remaining percentage.






Madrid, May 6th, 2002








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