BT to provide telcoms to Fiat

BT Group PLC
13 December 2005



  BT TO BECOME GLOBAL TELECOMS PROVIDER TO FIAT GROUP AND ACQUIRE ATLANET SPA

BT announced today that it will become Fiat's supplier of global
telecommunications services through a contract worth €450 million over five
years. BT will also acquire Atlanet, a Fiat subsidiary providing domestic
telecommunications services to Fiat and other non-Fiat business customers across
Italy.

Under the services agreement, BT will manage Fiat Group's global
telecommunications requirements across 40 countries. This contract will enable
Fiat to focus further on its core activities, while benefiting from BT's
expertise in networked IT services.

The acquisition of Atlanet from Fiat further reinforces BT's position in the
Italian market by contributing new customers and revenues and a strong existing
relationship with Fiat. Atlanet also provides additional strength in IP services
and incremental network coverage that will further support BT Albacom's strong
growth momentum.

Atlanet achieved revenues of €155 million during the year to 31 December 2004
and EBITDA of €12 million. The Turin-headquartered company controls a national
network with 24 PoPs (Points of Presence) for voice services and 42 PoPs for
data services, interconnected by a fibre optic backbone and equipped to offer
11,000 IP access points across the country. Atlanet also owns MANs (Metropolitan
Area Networks) in Rome, Milan and Turin. The company currently employs
approximately 280 people and at 2004 year end had gross assets of €133 million.
BT will pay cash consideration of approximately €80 million.

Andy Green CEO BT Global Services, said: "BT is delighted to have been selected
by such an established and respected Italian company to be its global provider,
and is committed to developing a long-term partnership with Fiat that supports
its transformation programme. This deal further demonstrates our continuing
success in winning global contracts with leading multi-national companies across
the world."

Francois Barrault, President BT International, said: "The services contract with
Fiat and the acquisition of Atlanet validate BT's unique strategy that combines
strong domestic and global capabilities; further enhancing our credibility and
momentum in Italy and internationally. Less than a year after the acquisition of
BT Albacom, we believe this transaction will contribute €1 billion of revenue to
BT over five years and demonstrates the quality and commitment of our Italian
operation under the leadership of Corrado Sciolla."

BT expects to be able to generate annual cash cost savings of around €20 million
by 2008, primarily through migrating traffic onto owned assets and the
consolidation of networks. Atlanet will be integrated into BT's Italian
operations.

The transaction is subject to regulatory approval and is expected to complete by
February 2006.

BT was advised in this transaction by Vitale e Associati spa.

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 networked IT 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 20 million 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 networked IT 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.

From January 2006, there will be a fourth business called Openreach. This
business will be responsible for the nationwide local BT network which covers
the "first mile" of wires that connects homes and businesses across the UK to
their service providers. Openreach will provide communications providers with
services and products associated with that network.

In the year ended 31 March 2005, BT Group's turnover was £18,623 million with
profit before taxation of £2,354 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

A wide selection of BT images are available for download via the image library
at www.vismedia.co.uk.

About BT Albacom
BT Albacom is the main Italian provider of communications solutions exclusively
focused on businesses and public administrations. In the fiscal year ended 31
March 2005, BT Albacom realised an annual turnover in excess of Euro 660
million, with EBITDA increased by 33 per cent compared to the previous year's
results, at a level of 8 per cent of turnover. BT Albacom currently serves more
than 240,000 businesses. In addition to its main offices in Milan and Rome, BT
Albacom also has offices in the main Italian towns and employs approximately
1,400 people. BT Albacom owns an optic fibre network exceeding 8,000 kilometers,
fully interconnected with BT's European IP network. BT Albacom is wholly owned
by BT, one of the world's leading providers of communications solutions.

About Atlanet
Atlanet S.p.A.is a Fiat Group subsidiary providing domestic telecommunications
services to Fiat and other business customers across Italy. Atlanet achieved
revenues of €155m during its financial year to December 2004, and has 286
employees. Headquartered in Turin, the company controls a national network with
24 PoPs (Points of Presence) for voice services and 42 PoPs for data services,
interconnected by a fibre backbone and equipped to offer 11,000 IP access points
across the territory. Atlanet also owns MANs (Metropolitan Area Networks) in
Rome, Milan and Turin.




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