Broadband Developments

BT Group PLC
24 April 2002

April 24, 2002

                         BT TO TAKE CUSTOMERS DIRECT TO

                            A NEW BROADBAND BRITAIN

  • New 'no frills' access to broadband targets 500,000 connections by Summer
    2003 as major step towards the 1m Group target

  • One-stop shop for customers to have simple internet access and telephony
    on a single line*

  • Service to build wider market for broadband content and services with
    strong initial range of partners actively engaged with BT

  • Micropayments innovation to allow content providers to charge for one-off
    downloads for services like games and music via BT*

  • Support services packages to help customers get the hardware and service
    support they need to enjoy the benefits of broadband at home*

  • Broadband related services expected to deliver a net increase in revenues
    of £490 million in 2004/05

*Separate detailed press releases are available on each of the new services
outlined above.



BT today (Wednesday 24 April) unveiled a new approach to broadband that redraws
the way internet access is sold and creates fresh opportunities for service and
content providers to grow revenue.

Called BT Broadband, the 'no-frills' Broadband product aims to generate 500,000
additional residential connections by Summer 2003, playing a critical role in
helping meet the one million connections target set by BT Group chief executive,
Ben Verwaayen.

By separating access to the internet from value-added services, BT has created
the first complementary alternative to the ISP business model which makes it
easier for customers to choose what services they want delivered in the way they
want.

Pierre Danon, chief executive of BT Retail, said: "Creating a mass-market for
any product or service needs affordability plus innovation. BT Broadband
delivers both. As a result, our customers and the competitive market that
provides content, applications and services, will benefit.

"From this autumn, residential customers will have a new, simpler alternative
for surfing the internet on one phone line, while service and content providers
will have a wider target market and a simpler, easier and more compelling route
to generating revenue."

The key elements of the plan announced today are:

Access: the launch of BT Broadband: a 'no frills' DSL access product which
allows customers always-on high-speed direct access to the internet over a
single home phone line for just £27 a month if paying by direct debit or monthly
payment plan, plus the standard line rental charges. A modem and micro-filters
pack will cost £80 from BT, although they can be obtained elsewhere. There is
also a one-off connection charge of £60. The connection fee can be spread with
the monthly direct debit facility available with the BT phone bill. The new
service strips out value-added services like email, free personal web space and
content. This leaves customers free to create the portfolio of services and
content they want and means they do not have to pay for services they may not
need. BT Broadband will be widely available from autumn 2002 following extensive
trials this summer.

Content: a wide range of partnerships have been agreed with companies to guide
consumers through the potential of broadband internet content and services. They
include ISPs Clara.net, Plus.net and BTopenworld, as well as UKonline (the
government's initiative to help the UK get the most out of the internet), MSN,
Yahoo, Sky, BTLooksmart and Google (portals and search engines), BBCi,
Infogrames, Clubbed.com (news, information and entertainment), MacAfee
(security), totaljobs.com (jobs) and lastminute.com (travel). As well as
established online brands, BT is initiating joint marketing to help smaller
providers raise the profile of their broadband services. BT is keen to talk to
as many service and content providers as possible to widen consumer awareness of
broadband's potential.

Shopping: an innovative micropayment service, based on proven technology, which
enables consumers to 'pay-as-they-go' when buying online content and services,
whether or not they are BT customers, and without the need for subscription. The
system is ideal for relatively low-price "loose change" download services such
as games and music. The micropayment service will be available from autumn 2002
and BT is looking to attract a wide range of providers interested in offering
cost-effective charging structures while giving consumers the benefit of paying
securely online.

Support: a centralised customer care service for all BT customers' telephony and
broadband internet needs. In addition, a completely new package of
broadband-ready PC hardware, software, installation and customer support
developed especially for the consumer market at an affordable price. The Digital
Support service, to be launched in autumn 2002, aims to reduce the hassle
associated with buying and upgrading a PC and software, as well as upgrading to
broadband and getting started. The service will also help customers avoid having
to make a significant up-front payment for their technology and will provide
ongoing service and support needs.

Pierre Danon said: "We are offering a suite of new ideas to allow as many
residential customers to get connected to broadband as easily as possible and at
an affordable price. We are making it simple for customers to get the most out
of the internet in a way that suits their own interests.

"These moves are all about providing our customers with the services they have
told us they want - faster direct access to the internet, integrated sales and
service and real choice of compelling content and online services. We intend to
keep broadband direct, simple and fun for the customer, which should also be
good news for content and service providers."

BT Broadband is expected to generate £360 million a year in revenue for BT
Retail by 2004/05 and be profitable from 2003/04. Payback on the new service is
expected to be 27 months. Digital Support is forecast to generate £150 million
revenues a year by 2004/05 and the Micropayments business is set to generate £40
million revenues a year by the same time. Together with the corporate broadband
teleworker product announced earlier this month with Microsoft as the first
customer (£30 million revenues per annum by 2004/05), this adds up to £490
million of new, annual broadband related revenues by 2004/05, allowing for a £90
million substitution effect of the new broadband service.

While the introduction of these new services is likely to create a substitution
effect, with reduced sales of domestic ISDN and second line services for
example, the customer service and overall revenue impact will be positive.

Pierre Danon said: "It is important to BT that we are driven by customer
satisfaction in developing our revenue growth opportunities and today's
intentions deliver exactly that.

"Today BT has gone another step to ensuring broadband is at the heart of BT. We
have good products. They are at the right price. And they will be backed by a
new approach to customer service, strong marketing, and increasing
availability."

ENDS

High resolution images are available for the media to view and download from
07.05am, April 24, 2002, from http://www.vismedia.co.uk

Note to Editors

BT Broadband costs £27 per month if paid by direct debit or monthly payment
plan. Other payment methods charged at £28 per month. Monthly payment plan is
subject to status. Written quotation is available on request. Monthly payments
include estimated call spend and may vary. Prices are inclusive of VAT.

For further information:

Catherine Spaul, Fishburn Hedges         tel: [phone]

Sarah Menendez, Fishburn Hedges          tel: [phone]

BT Group Newsroom                        tel: [phone]

BT Retail is one of the businesses that make up the BT Group. Others include BT
Ignite, BT Wholesale, BTopenworld and BTexact Technologies. It is the UK's
leading communications service provider and the prime channel to market for the
other businesses in the Group. It has 21 million residential and business
customers, a turnover of £11.8bn (in the last full financial year) and around
50,000 employees.



Forward Looking Statements - Caution

Certain statements in this press release are forward-looking and are made in
reliance on the safe harbour provisions of the US Private Securities Litigation
Reform Act of 1995.  These statements relate to analyses and other information
which are based on forecasts of future results and estimates of amounts not yet
determinable. These statements include, without limitation, those concerning: BT
customer targets; reductions in costs, and prices for customers; increasing
access to broadband; improvements in network performance and service quality;
partnerships with service providers; expectations regarding broadband growth in
the UK; the promotion of broadband by third-party service providers; revenues
and EBITDA targets and growth.

Although BT Group believes that the expectations reflected in these
forward-looking statement are reasonable, it can give no assurance that these
expectations will prove to have been correct.  Because these statements involve
risks and uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.

Factors that could cause differences between actual results and those implied by
the forward-looking statements include, but are not limited to: material adverse
changes in economic conditions in the markets served by BT Group and its lines
of business; future regulatory actions and conditions in BT Group's operating
areas, including competition from others in communications markets; general
financial market conditions; technological innovations, including the cost of
developing new products and improving the quality of service; developments in
the convergence of technologies; the anticipated benefits and advantages of new
technologies, products and services not being realised; the timing of entry and
profitability of BT and its lines of business in certain communications markets;
factors not wholly within BT Group's control which may affect its ability to
implement its cost reduction programme, improve quality, and work successfully
with other service providers to promote broadband.



                      This information is provided by RNS
            The company news service from the London Stock Exchange