Chairman's AGM Statement

BRITISH TELECOMMUNICATIONS PLC
14 July 1999

        BT HAS ENJOYED ONE OF ITS BEST YEARS EVER

          SIR IAIN VALLANCE TELLS SHAREHOLDERS

BT has enjoyed one of its best years ever on a wide range
of measures, company chairman Sir Iain Vallance said
today.

     Addressing shareholders at the annual general
meeting in Birmingham, he said he was very proud of the
commitment shown by chief executive Sir Peter Bonfield,
his senior management team, and BT people at all levels
who made this happen.

     He said: 'We not only returned excellent financial
results but we also made strategic progress in a number
of new markets around the world and we continued to
enhance our reputation as a good corporate citizen and a
good company to do business with.'

     During the year, the share price grew by 55 per
cent, compared with an increase of five per cent for the
FT-SE 100 index as a whole.

     'And the news on dividends is good as well - a total
for the year of 20.4 pence per share, an increase of 7.4
per cent on the previous year.'

     Other figures Sir Iain cited included an increase in
turnover by more than 13 per cent to over £18 billion and
BT Cellnet winning 1.4 million new customers.

     He said: 'Our new ventures in Europe and the Asia
Pacific region accounted for over £800 million of the
increase in turnover.'

     Sir Iain told the meeting that the company's vision
statement had been refined to read: 'To be the most
successful worldwide communications group', to replace
telecommunications.  This reflected two facts - that the
vision is no longer about future aspirations, it is about
seizing the moment now. And that revenues increasingly
come from new wave activities - mobile and data
communications, Internet access and systems solutions.

     'One sign of the new kind of company we are, and the
success of our strategy of seizing opportunities in new
high-growth markets, is the global venture we are forming
with AT&T,' he said.  'We expect it to be up and running
shortly.'

     However Sir Iain stressed that a company's financial
results, its strategy and partners, don't tell you
everything you need to know about it.

     'Another key factor is its reputation, not least
because a good reputation will encourage customers and
suppliers to do business with the company.'

     He cited BT's Statement of Business Practice - which
sets out the way in which BT builds and manages
relationships with all those that have an interest in the
company - and its newly-published Social Report as
evidence of BT's initiatives here.

     'All companies are required to comply with the laws
concerning corporate governance but your company is
committed to setting a standard in these matters,' he
told shareholders.

     Sir Iain also reminded them of the part that BT was
to play in the Millennium Dome, as sponsors of the Talk
Zone.  'We believe that our products can make a major
contribution to our communities into the next century,'
he said.   The company planned to tell this story in the
Dome.

     Beyond this, BT had also launched one of the UK's
largest-ever industry-backed education programmes -
Futuretalk - in thousands of schools around the country.

     Sir Iain concluded by thanking shareholders, many of
whom had held shares since privatisation in 1984, for
their loyalty.  'Your board is truly grateful to you all
for your support and we look forward to having you all
with us in the next millennium,' he said.

Note: copies of the full speech are available from BT's
Corporate Newsroom.