TELEFÓNICA DE ESPAÑA IS TO DOUBLE THE SPEED OF ADSL LINES WITHOUT CHANGING THE PRICE

•Once authorisation has been received from the Telecommunications Market
Commission (CMT), and in accordance with the schedule established by this
body, the company will begin the process at the end of September and expects
to finalise it before the end of the year.

Telefónica de España's initiative to double the speed of its ADSL service without
modifying the price, proposed to the regulator on June 1, was finally authorised by this
body on July 22. There are currently around 2.1 million ADSL lines in operation.

Now this authorisation has been received, and in accordance with the implementation
schedule specified therein, Telefónica de España will proceed in the last days of September
to increase the speed of all ADSL modalities without changing their price and without the
need for customers to carry out any procedures. The measure will also be applied from that
moment to all new ADSL customers.

Specifically, nominal speeds for downloading information will double compared with
present speeds; this means that the basic ADSL mode will operate at 512 kb/s, at the same
price as currently paid for a 256 kb/s connection. This increase will have no impact on the
other characteristics or additional features of the service for which the customer is paying
(e-mail accounts, antivirus software, maintenance services, etc.)

Telefónica de España will establish a gradual migration plan to the new speeds for current
ADSL customers, which it aims to conclude before the end of the year. This migration
process requires no adjustments to the customer's equipment.

The following table provides details of the new speeds for each mode

27/07/2004
TELEFÓNICA DE ESPAÑA IS TO DOUBLE THE SPEED
OF ADSL LINES WITHOUT CHANGING THE PRICE
•Once authorisation has been received from the Telecommunications Market
Commission (CMT), and in accordance with the schedule established by this
body, the company will begin the process at the end of September and expects
to finalise it before the end of the year.
Telefónica de España's initiative to double the speed of its ADSL service without
modifying the price, proposed to the regulator on June 1, was finally authorised by this
body on July 22. There are currently around 2.1 million ADSL lines in operation.
Now this authorisation has been received, and in accordance with the implementation
schedule specified therein, Telefónica de España will proceed in the last days of September
to increase the speed of all ADSL modalities without changing their price and without the
need for customers to carry out any procedures. The measure will also be applied from that
moment to all new ADSL customers.
Specifically, nominal speeds for downloading information will double compared with
present speeds; this means that the basic ADSL mode will operate at 512 kb/s, at the same
price as currently paid for a 256 kb/s connection. This increase will have no impact on the
other characteristics or additional features of the service for which the customer is paying
(e-mail accounts, antivirus software, maintenance services, etc.)
Telefónica de España will establish a gradual migration plan to the new speeds for current
ADSL customers, which it aims to conclude before the end of the year. This migration
process requires no adjustments to the customer's equipment.
The following table provides details of the new speeds for each mode

      ADSL MODE                                               CURRENT SPEED                                              NEW SPEED
Basic                                                               256 kb/s / 128 kb/s                                         512 Kb/s / 128 Kb/s
Class                                                              512 Kb/s / 128 Kb/s                                            1 Mb/s / 300 Kb/s
Advanced                                                          1 Mb/s / 300 Kb/s                                            2 Mb/s / 300 Kb/s
Premium                                                             2 Mb/s / 300 Kb/s                                            4 Mb/s / 512 Kb/s
Business Class                                             512 Kb/s / 256 Kb/s                                             1 Mb/s / 512 Kb/s
Advanced Business                                         1 Mb/s / 512 Kb/s                                             2 Mb/s / 512 Kb/s
Premium Business                                            2 Mb/s / 512 Kb/s                                             4 Mb/s / 512 Kb/s

By implementing this measure, Telefónica de España is adjusting its offer to the growing
demands of the Information Society to facilitate access to new and improved content and
applications via the internet, with the consequent benefits for users, service providers and
the growth of the market in general. The company is once again demonstrating its clear
commitment to the development of broadband, in which it has invested more than 2
billion euros to date.

The doubling of ADSL speed at no additional cost to the customer marks a further step in
Telefónica de España's effort to promote the advance of broadband at three levels: the
launch of new products and services, both for the residential and business markets,
sustained improvement in quality and the permanent search for innovation.

Hence, over the course of 2002, 2003 and 2004 new proposals that create value for
Telefónica customers have been progressively launched: ADSL solutions for SMEs,
Mundo ADSL, 1 Mb/s. ADSL line, antivirus and anti-intruder software, satellite
broadband internet access, Imagenio…