Second Cash Dividend Payment

Telefonica SA
02 November 2004



                            ANTONIO J. ALONSO UREBA
                        Director, General Secretary and
                      Secretary of  the Board of Directors
                                TELEFONICA, S.A


Telefonica S.A., in accordance with that stated in article 82 of the Spanish
Stock Market Act (Ley del Mercado de Valores), hereby


                                    NOTIFIES


Pursuant to the resolution adopted by the shareholders of 'Telefonica, S.A.' at
their Annual General Meeting of April 30th, 2004, we hereby inform all
shareholders that on November 12th, 2004 the Company will pay the cash dividend
from the Additional Paid-in capital reserve of a gross amount of 0.20 euros for
each Company share issued, in circulation and carrying entitlement to this
dividend (Record Date: Thursday, November 11th, 2004).


The payment of this dividend shall be executed on the aforesaid date by Banco
Bilbao Vizcaya Argentaria, S.A., through the participating entities in Iberclear
(Sociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion de
Valores, S.A.), the Spanish securities registrar, clearing and settlement
company.





                                                      Madrid, November 2nd, 2004


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