Interconnection Rates

Telefonica SA
27 December 2000


Mr Antonio Hornedo Muguiro, Vice Secretary, non member of the board of
Telefonica Moviles S.A. ('Telefonica Moviles') appears before the Spanish
National Securities Market Commission ('CNMV') and

                              DECLARES:

That he submits to the CNMV as HECHO RELEVANTE (Relevant Event) the following
information regarding the initiative of TELEFONICA MOVILES ESPANA to reduce
interconnection rates (remuneration received from fixed-line operators with
which it has entered into interconnection agreements) in calls made to MoviStar
and MoviLine mobile telephones. This measure will consist of two phases and will
reduce the referential final fee charged to users by at least 13%.

The first rate cut will be made effective on January 15 and will reduce by 
10,75% the current average revenue obtained from those operators. There will be
a second price reduction applied on April 30 that will cut the rates further to
reach a final 17% cut.

TELEFONICA MOVILES ESPANA wants to continue passing on though cost savings the
efficiencies and economies of scale that the development of the mobile telephony
market makes possible, creating a balanced evolution of mobile-to-fixed and
fixed-to-mobile rates.


Madrid, December 21, 2000


Antonio Hornedo Muguiro
In the name of and representing TELEFONICA MOVILES S.A.