Talks with Telecom Co's

Telefonica SA
3 May 2000


During the normal course of its activity, Telefonica S.A. maintains
conversations with different telecommunications companies, both Spanish and
foreign, on various matters.  In this context, Telefonica has been maintaining
conversations with KPN on a number of topics, including the possibility of
integrating all or part of their businesses.  However, as of today's date, no
definitive agreement has been reached, nor is there a certainty that the 
abovementioned conversations will produce positive results.