June, 2003

TELEFONICA GROUP AND EXENT TECHNOLOGIES SIGN STRATEGIC MOU

Madrid, Spain, June, 2003 - Telefonica SA (NYSE:TEF), one of the world's leading telecommunications companies and the leading operator in the Spanish- and Portuguese-speaking markets, and Exent Technologies, the global leader in Applications-on-Demand technology, signed a Strategic MoU for cooperative development of broadband-based services in Spain and Latin America.

According to the Strategic MoU, Telefonica will consider Exent a preferential provider for Applications-on-Demand solutions in its Group companies; especially those whose business is related to the development of broadband network-based services.

Both parties recognize the importance of the development of a profitable market for broadband-based services in Spain and Latin America and consider streaming software applications a key element in their strategies to facilitate end users' experience with online content. The parties will each contribute area expertise and will share information in order to obtain better understanding of market opportunities.

In order to foster the relationship, a Strategic Alliance Committee ("SAC") has been appointed, co-chaired by Mr. Kim Faura Batlle, Corporate General Manager, Marketing and Content of Telefonica and Zvi Levgoren, Exent's CEO.

"We firmly believe this collaboration in offering Applications-on-Demand solutions is fundamental to helping us to define new and interesting value propositions for our clients. These new customer offerings will further develop the broadband market worldwide" said Faura of Telefonica.

"This MoU is an important milestone in our strategy to extend our relations with top-tier broadband providers beyond the PC Games-on-Demand business. We are committed to work with Telefonica on additional verticals such as the Console Gaming and Enterprise markets, in which Telefonica is perfectly positioned to become a global market leader," said Levgoren.

The relationship between Telefonica and Exent was established with the aid of Excem Technologies, Exent's agent for the Telefonica Group and Spain.

"Without continuous support from Excem, this could not have happened," said Levgoren.

About Telefónica SA
Incorporated in 1924, Telefonica is a telecommunications operator in the Spanish- and Portuguese-speaking world. The Company's most important markets are Spain and Latin America, although it has begun to expand into other regions, such as Europe and the Mediterranean Basin (Morocco), mainly through mobile telephone licenses and corporate services. As a global operator in the telecommunications, Internet and media sectors, the company provides a wide range of services for an extensive group of activities, including fixed telephony, mobile telephony, business services, the creation and distribution of Internet content and services, the creation and distribution of audiovisual media content, the sale and marketing of directories and guides and customer relationship management services and e-commerce. www.telefonica.com

About Exent Technologies Ltd.
Exent Technologies is the global leader in developing Applications-on-Demand technology that delivers computer software programs over IP networks for use in advanced telecom, broadband and enterprise services. Its flagship product, the Exent EXEtender™ delivers any software securely over the web or an enterprise network. Major shareholders in the company are: New Enterprise Associates (NEA), Temasek Holdings of Singapore, Concord Ventures, Geyser Business Enterprise, America Online, Comcast, Singapore Telecommunications (SingTel), and Bezeq (Israeli Telco). Exent can be found online at www.exent.com