Proposed sale of TPI

Telefonica SA
28 April 2006



Pursuant to the provisions of Section 82 of the Securities Market Law (Ley del
Mercado de Valores),  TELEFONICA S.A. hereby gives notice of the following



SIGNIFICANT EVENT



Having analyzed the offers received within the framework for the sale of the
equity interest of TELEFONICA, S.A. (hereinafter, 'TELEFONICA') in the
capital of TELEFONICA PUBLICIDAD E INFORMACION, S.A. (hereinafter, 'TPI'),
  TELEFONICA has decided to sign the contract committing to the formulation
and acceptance of a Public Tender Offer with the English telephone directory
company YELL GROUP plc (hereinafter, 'YELL').  The price of the offer submitted
by YELL is 8.50 euros per share (ex-dividend), which entails a total price of
1,838 million euros for 59.905% of the share capital of TPI currently owned by
TELEFONICA. In this regard, the shareholders acting at the General
Shareholders' Meeting of TPI held in Madrid on 8 April 2006 approved the
distribution of a dividend of 0.40 euros per share, which will be paid on 5 May
2006.



Pursuant to the foregoing, TELEFONICA has today formalized an agreement with
YELL pursuant to which YELL has agreed to submit to the National Securities
Market Commission (Comision Nacional del Mercado de Valores) (hereinafter, 'CNMV
') the request for authorization of a Public Tender Offer (hereinafter, the '
Offer') for all of the shares of TPI, and TELEFONICA has agreed to accept the
offer with respect to all of the shares of TPI that it owns, pursuant to the
terms and conditions of the above-referenced agreement.



TELEFONICA may be released from its commitment to accept this Offer in the
event that a competing public offer authorized by the CNMV offers consideration
of more than 10% above the initial price of the YELL offer, i.e., greater than
9.35 euro per share, unless YELL decided to improve such offer.



The Offer is subject to obtaining the relevant administrative authorizations and
the approval of the shareholders acting at the General Shareholders' Meeting of
YELL.



Madrid, 28 April 2006.










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