I ... had trouble using the Telefonica telephone booths (for local calls, with Euro coins). I eventually was able to make my calls, but I ... did not find the onboard instructions to be helpful. So, what is the proper procedure??.
It's been about 4-years since I used coins in a
Telefonica pay phone in Spain; but as I recall, it was just like using one in the U.S.: lift the handset; insert a 20-euro cent coin; listen for a dial tone and punch in the number you are calling. I never exceeded the basic time, so I can't tell you about how they cue you to pay overages. The 20-euro cent may have increased since 2002, but I don't know that for a fact.
I assume you are planing to visit Spain again soon (otherwise, why the questions?). I always buy a
Tarjeta Telefonica: the one with the I/C on the card. You insert that into the slot on the upper right of the phone and the screen tells you how much (Euro-credit) you have remaining.