Stmnt re Capital Increase

Telefonica SA
18 December 2000


'TELEFONICA, S.A.', in accordance with that set forth in article 82 of the Stock
Market Law, by way of this document hereby announces the following Significant
Event:

The capital increase amounting to Euros 110,000,000, approved by the
Extraordinary Shareholders' Meeting of 'TELEFONICA, S.A.' held on February 4th
2000, has today been executed.

The subscription to this capital increase has been declared incomplete, with
88,944,644 'TELEFONICA, S.A.' shares of a nominal value of one (1) Euro each
having been subscribed to, and therefore totalling a nominal amount of Euros
88,944,644.

The issue premium has been set at Euros 10.230562 per share.  The effective
amount for the subscription therefore totals Euros 998,898,339.

Payment for the aforementioned 88,944,644 shares has been made through CEI
Citicorp Holdings, S.A. having contributed 404,555,475 of its shares to
Telefonica, S.A., which represent 80.91% of the former's share capital.

Madrid, December 18, 2000