MADRID, Spain -- Telefónica and Sogecable have signed an agreement to offertelecommunications and digital satellite television services and to work together to buy pay-TVcontent in the Spanish market.

As from 30 November 2007, Telefónica and Sogecable will provide a joint offer branded“Trío +” via their respective sales channels. It will consist of Telefónica’s DUO service (ADSLand Voice) and the satellite television service offered by Digital+.

Each company will invoice its respective customers separately and will continue toprovide customer care and service via their corresponding centres.

Telefónica and Sogecable will therefore be able to offer a competitive Triple Play servicewhereby Sogecable can offer all its current and future customers the option of ADSL televisionwhile Telefónica can widen its current offer to include satellite pay-television, on top of itsImagenio service.

Sogecable and Telefónica have also agreed to join forces to buy pay-TV content in Spain.Sogecable will take the lead in these initiatives and supply the content to Telefónica. As a result,both parties to the agreement expect to leverage the size of their joint customer base in order toacquire content which will benefit both companies' customers and enhance the catalogue ofcontent on offer.

Telefónica SA (NYSE: TEF)