21CN Network Suppliers

BT Group PLC
28 April 2005


DC05-255
April 28th, 2005

                        BT ANNOUNCES PREFERRED SUPPLIERS
                       FOR 21st CENTURY NETWORK PROGRAMME

BT today took a major step towards delivering its 21st Century Network with the
selection of its preferred suppliers. The 21st Century Network is the world's
most radical next generation network transformation programme. It will require
an investment by BT of up to £10 billion over the next five years and will put
the UK at the cutting edge of innovation, providing industry with a real
competitive advantage, and consumers with a world-class communication service
for the 21st Century.

The announcement is the culmination of two years of discussions and negotiations
with over 300 potential technology suppliers from all corners of the world. This
is has been an extremely competitive process in what is one of the largest
single procurement programmes ever undertaken in the communications industry.

A final list of eight preferred suppliers has been chosen to work with BT in
five strategic domains:

     1. Fujitsu and Huawei have been chosen in the access domain which will link
        BT's existing access network with the new 21CN.
     2. Alcatel, Cisco and Siemens have been selected as preferred suppliers for
        metro nodes which provide routing and signalling for 21CN's voice, data
        and video services.
     3. Cisco and Lucent will be 21CN's preferred suppliers for core nodes
        providing high capacity and cost efficient connections between metro
        nodes.
     4. Ericsson has been selected in the i-node domain - in essence the
        intelligence that controls the services.
     5. Ciena and Huawei have been chosen in the transmission domain to supply
        the optical electronics that will convert the signals carried at high
        capacity over the cables connecting the metro and core nodes.

The selection of these eight suppliers will allow dozens of smaller and
innovative subcontractors to become involved in the delivery of the 21st Century
Network. The programme will attract significant new investment and employment to
the UK.

Matt Bross, BT Group's chief technology officer said: "The capability that BT is
putting in place through this investment in 21CN is unequalled anywhere in the
world. It will enable us to introduce new services at a speed that is simply
impossible today."

Paul Reynolds, BT Wholesale chief executive, the BT Board member responsible for
the programme, added: "21 CN is a key infrastructure that will fuel the UK
economy and provide a flexible way for consumers to use new services. The
selection of the preferred suppliers is an incredibly important building block
towards that vision. 21CN will also radically reduce BT's cost base, with
identified savings of around one billion pounds a year."

In order to achieve world class delivery of the programme, the selection of
suppliers has been about much more than choosing technology and selecting
partners. The commercial agreements, which the company expects to conclude over
the summer, will include open standards and a focus on whole life costs.

                                     -ends-

Inquiries about this news release should be made to the BT Group Newsroom on its
 24-hour number: 020 7356 5369. From outside the UK dial + 44 20 7356 5369. All
  news releases can be accessed at our web site: http://www.bt.com/newscentre

Notes to editors

Preferred suppliers have been chosen across each of five strategic domains. The
domains are access, metro, core, i-nodes, transmissions.

Access     Metro      Core          I-Nodes         Transmission

Fujitsu    Alcatel    Cisco         Ericsson        Ciena
Huawei     Cisco      Lucent                        Huawei
           Siemens

   •Access - the access domain in this context is the aggregation equipment
    (multi-service access node - MSANs) which will link BT's existing access
    network, initially carrying voice and data services from end users on to the
    21CN core IP based network.

   •Metro nodes provide the routing and signalling functions for the unified
    21CN network for voice, data and video.

   •Core nodes are the high capacity, large scale routers providing cost
    efficient connections between metro nodes.

   •i-node is where the service execution functionality is located - in
    essence the intelligence that controls services. In the 21CN context, this
    includes soft switches, network intelligence and bandwidth management
    capabilities.

   •Transmission includes the optical fibre transport infrastructure that
    connects all nodes in 21CN but also the electronics that converts the
    signals carried at high capacity over the cables connecting the MSANs, metro
    and core nodes. Much of the optical fibre infrastructure is already in place
    and today we are announcing the preferred suppliers for the optical
    electronics.

About BT

BT is one of the world's leading providers of communications solutions serving
customers in Europe, the Americas and Asia Pacific. Its principal activities
include IT and networking services, local, national and international
telecommunications services, and higher-value broadband and internet products
and services.

BT consists principally of three lines of business:

   •BT Retail, providing a comprehensive range of communications and related
    services to more than 20m UK consumers and businesses.

   •BT Wholesale, providing network services and solutions within the UK to
    more than 600 fixed and mobile operators and service providers including the
    provision of broadband and private circuits.

   •BT Global Services, providing IT and networking services to meet the
    needs of multi-site organisations globally. BT Global Services operates in
    more than 130 countries and also offers international carrier services.

In the year ended 31 March 2004, BT Group's turnover was £18,519 million with
profit before goodwill amortisation, exceptional items and taxation of £2,013
million.

BT Group plc is listed on stock exchanges in London and New York. British
Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and
encompasses virtually all businesses and assets of the BT Group.

For more information, visit www.bt.com/aboutbt



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