Pegaso-Closing of acquisition

Telefonica SA
12 September 2002


In compliance with article 82 of Law 24/1988, July 29, of the Securities Market
Law and related provisions, and in order to make public a Notice of Corporate
Action, Telefonica, S.A. hereby inform you that on September 10th, 2002 took
place the final closing of the acquisition by Telefonica Moviles, S.A., a
subsidiary of Telefonica, S.A, of 65% of the Mexican corporation Pegaso
Telecomunicaciones, S.A. de C.V. (Pegaso), once fulfilled all the conditions to
which the acquisition was subject.

In accordance with the agreements signed, 100% of Pegaso shares' as well as of
the companies owned by Telefonica Moviles, S.A. in Northern Mexico have been
contributed to a newly incorporated corporation, Telefonica Moviles Mexico, S.A.
de C.V., in which Telefonica Moviles, S.A. holds a 92% interest.


                                                    Madrid, September 12th, 2002


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