Sale of Pearson shares

Telefonica SA
23 September 2004

Telefonica S.A., as provided in article 82 of the Spanish Securities Market Act
(Ley del Mercado de Valores), hereby in writing

REPORTS

That Telefonica, S.A. has sold 38,853,403 shares in the company Pearson Plc on
the London stock market for approximately 350 million euro, representing 4.88%
of its share capital. This sale forms part of the previously announced company
strategy of divesting its media assets.

Madrid, 23 September 2004


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