TGroup- financial projections

Telefonica SA
26 April 2005

                            ANTONIO J. ALONSO UREBA

                          Director, General Secretary

                    and Secretary to the Board of Directors

                               TELEFONICA, S.A.


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





                               SIGNIFICANT EVENT



During the Fourth Investor Conference that is being hosted in Barcelona on April
25th and 26th, the company communicates the expected consolidated performance of
the Telefonica Group for the period 2004-2008, based on key financial
indicators.

These financial projections are as follows:





TELEFONICA GROUP




                                                  2004 Reported under IFRS (Euros     CAGR (*) 2004-2008
                                                            in Million)                      (%)

Revenues                                                     30,270.7                      +7%/+11%

Operating Income Before D&A                                  12,129.6                      +8%/+12%

Operating Income                                              6,463.0                      +13%/+19%

CAPEX                                                         3,771.9                       +3%/+7%

(*)CAGR stands for Compounded Annual Growth Rate.





Furthermore, Telefonica announces it expects to generate a free cash- flow of
more than 36 billion euros during the period 2005-2008. As proof of the company'
s commitment to shareholder remuneration, Telefonica communicates its decision
to execute a renewed and extended 6 billion euros share buyback program until
2007. This 6 billion euros includes the pending execution of the 2003-2006
Program.



The execution schedule of these share buy-backs will be conditioned to both the
pace of cash-flow generation and to the share price level, all subject to any
applicable limitations established by law, regulation and by the Company's
Bylaws.



In terms of guidance calculation, Operating Income before D&A and Operating
Income exclude other exceptional revenues/expenses not foreseeable in 2005-2008.
These exceptionals amounted to -303.5 MM€ in 2004 and are therefore also
excluded, meaning a calculation base for guidance of 12,433.1 MM€ for Operating
Income before D&A and 6,766.5  MM€ for Operating Income, respectively. Personnel
Restructuring and Real Estate Programs are included as operating revenues/
expenses.



All projections refer to local currency, that is assuming constant exchange
rates as of 2004, and exclude changes in consolidation, other than BellSouth
assets in Argentina & Chile acquired by Telefonica Moviles in 2005, and Atrium
acquired by Telefonica Latinoamerica. Cesky Telecom is incorporated into the
consolidated accounts in the second half 2005.



Madrid, April 26th, 2005









This document contains statements that constitute forward looking statements of
the Company or its management, including statements regarding the intent, belief
or current expectations of the customer base, estimates regarding future growth
in the different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.



Such forward looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those in the forward looking statements as a result of various factors.



Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this
communication. Telefonica undertakes no obligation to release publicly the
results of any revisions to these forward looking statements which may be made
to reflect events and circumstances after the date of this communication
including without limitation changes in Telefonica's business or acquisition
strategy or to reflect the occurrence of unanticipated events. Analysts and
investors are encouraged to consult the Company's prospectus as well as periodic
filings made with the relevant financial regulatory authorities.




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