Telefonica Completes Over 500 On-line Transactions On Its Business-to-business - B2B - eProcurement Platform in Argentina and Spain

Business Wire, May 22, 2000

Business Editors

MADRID, Spain--(BUSINESS WIRE)--May 22, 2000

Three companies in two countries successfully complete over 500

on-line transactions using Telefonica's B2B eProcurement solution,

in record time.

Next month, Telefonica will continue to generate new growth

initiatives and to develop its network of alliances, with the goal

of leading B2B eCommerce solutions in Europe and Latin America.

Today, Telefonica's B2B company, which develops business-to-business (B2B) electronic commerce solutions in Spanish and Portuguese speaking markets, announced the completion of over 500 transactions through its horizontal B2B eCommerce portal in Argentina and Spain.

Telinver, Argentina's largest telephone and information directory (Paginas Doradas), Antena 3, the most profitable of all European private television channels, based in Madrid, and Telefonica de Espana S.A. (TESA), Spain's premier telecommunications provider, constitute the first group of companies to successfully conduct web-based, online B2B transactions with six of their major suppliers over Telefonica's eCommerce horizontal exchange. Telefonica provided a single point of integration between these companies and their suppliers by facilitating ready-to-use electronic catalogs, local adaptation of the Ariba B2B Buyer(TM) solution and the Ariba Commerce Services Network (TM), systems integration, and end-user training. This will result in real-time transactions between buyers and sellers, better prices and faster delivery - thereby, allowing Telinver, Antena 3, TESA and their suppliers to substantially save in procurement prices, overhead costs, paperwork, and transaction processing.

"Automating Telinver's operating purchasing process will enable us to substantially reduce operating expenses and allow us to re-focus on strategic initiatives," said Marcos Noble, General Manager, Telinver. "The most amazing characteristic of Telefonica's B2B cutting-edge solution is that it requires minimal training and is truly accessible to all of my employees."

"Telefonica is clearly committed to bringing the benefits and opportunities of B2B eCommerce to its current and future European and Latin American customers," said Keith Krach, chairman and chief executive officer of Ariba Inc. "There is strong momentum for Telefonica's B2B exchanges, which are powered by the Ariba B2B Commerce Platform, as evidenced by more than 500 live transactions from customers who are now enjoying time and cost savings through the digital B2B economy."

This is the latest in a series of moves by Telefonica, one of the world's largest telecommunications companies, to aggressively become the leader in B2B eCommerce in Spanish and Portuguese speaking markets. In December 1999, Telefonica and Ariba, jointly announced an agreement in which Telefonica would build a series of B2B corporate exchanges in Europe and Latin America. Since then, Telefonica has been working to locally adapt and deploy the Ariba B2B eCommerce solution in Latin America, Spain, and Portugal, and has been working with local partners to develop value added services, such as, customer care, content management, payment systems, order tracking, fulfillment, and systems integration, all of which will be required by corporations to streamline their purchasing process. Telefonica is creating a series of corporate exchanges leveraging the company's leading presence throughout Portuguese and Spanish speaking countries, beginning with Argentina, Brazil, Mexico, and Spain.

"Telefonica's horizontal B2B eCommerce portal will in a short time become the leader in developing the most complete eProcurement solutions in Latin America, Spain, and Portugal", said Rafael Hernandez, Chief Executive Officer of Telefonica B2B. "Internet is a very important factor in our strategy, and with this agreement, we take a step forward in positioning the Spanish and Portuguese languages in the world of Internet," he added.

Regular purchases of indirect goods and services account for 24% of a company's resources and expenditures. Consolidating and pre-negotiating contracts with suppliers to avoid "maverick" spending can save corporations 10% to 20%. The company's purchasing department, with Telefonica's expertise in B2B solutions, aggregates as many supplier catalogs as desired into a single, on-line, "universal" catalog, which allows end-user requisitioning from their desktops, facilitating standard procurement for the corporation. Linked to the corporation's back office ERP or accounting system, the eProcurement process cuts time and transaction expenses, while avoiding possible bookkeeping mistakes. This mirrors the buyer's traditional purchasing process down to individual permissions, business rules, and workflow, but permits the purchasing organization to control the overall buying process while distributing the purchasing task to end users.

About Telefonica

Telefonica SA, with presence in over 40 countries, is Spain's foremost private-sector company and the leading telecommunications' services operator in the Spanish and Portuguese speaking world. With revenues totaling US$23B, Telefonica ranks among the world's ten largest telecommunications companies. Telefonica is also Spain's biggest company in terms of profits (US$4B), volume of assets (US$64B), and market capitalization. In November of 1999, Telefonica's subsidiary Terra Networks (NASDAQ: TRRA), which provides a wide range of Internet services to residential and business users, went public. Terra recently acquired Lycos for $12.5 billion in stock, creating Terra Lycos, the third largest Internet company in the world.