Closure of Partnership Deal

BRITISH TELECOMMUNICATIONS PLC
2 September 1999


  BT ANNOUNCES CLOSURE OF PARTNERSHIP TRANSACTION WITH
                 JAPAN TELECOM AND AT&T

BT today announced closure of its ground-breaking
strategic and operational partnership transaction with
Japan Telecom and AT&T.

     BT and AT&T announced on 25 April 1999 that they
would acquire a 30% stake in Japan Telecom for £1.2
billion, forming a partnership aimed at reinforcing Japan
Telecom's ability to deploy new services and technologies
to serve customers in Japan. Definitive agreements were
concluded on 31 August 1999.

     Sir Peter Bonfield, BT chief executive said: 'This
is an important milestone for us. We have closed the deal
two months ahead of schedule. This visibly demonstrates
the strength and dynamism of this unique three-way
partnership between Japanese, European and American
companies. It positions us for strong growth in the
multinational sales, data, mobile and Internet sectors in
Japan'.

     As part of the transaction:

* Japan Telecom will become the sole distributor in Japan
  of BT and AT&T Global Venture branded services, once
  the Global Venture secures US regulatory approval.
  Japan Telecom is now appointed distributor of Concert
  global managed services in Japan

* BT's in-country operations in Japan, BT Communications
  Services and BT Network Information Services, which
  focus on multinational sales and services, have been
  integrated into Japan Telecom, and will be renamed -
  Japan Telecom Communications Services and Japan Telecom
  Network Information Service. AT&T's in-country business
  - Jens - is also being integrated with Japan Telecom.

* BT has taken a 20% stake in the Japan Telecom third
  generation mobile planning company, which will apply
  for a licence in Japan early next year.

* The BT Directors on the Japan Telecom Board are: Clive
  Ansell as executive board member; and Koshiro (Kit)
  Kitazato as non-executive board member.