Co-operation agreement

British Telecommunications PLC
21 September 2001


                                                       Embargoed until 07:00am

                                                             21 September 2001




          mmO2 AND T-MOBILE SIGN 3G NETWORK ROLL-OUT CO-OPERATION AGREEMENT

        mmO2 and T-Mobile International today announced that they have signed
        binding agreements to co-operate on the roll-out of third generation
        (3G) mobile networks between their operating subsidiaries in the UK
        and Germany.

        mmO2 and T-Mobile International announced their intention to
        co-operate on June 12 this year. The final binding agreements between
        BT Cellnet and One2One in the UK and T-Mobile and VIAG Interkom in
        Germany were signed on 20 September.

        Over the past few months both parties have been working extensively
        together to finalise the operational, technical and commercial details
        of the agreements. This agreement is expected to deliver up to 30 per
        cent cost savings over 10 years to mmO2 on capital expenditure
        relating to 3G network build.

        Peter Erskine, chief executive officer, mmO2, said: 'Today's
        announcement is another important development for mmO2. We are now in
        a position to move into the implementation phase and focus on driving
        forward our 3G network roll-out plans in Germany and UK. This exciting
        agreement should lead to substantial cost-savings, faster network
        coverage for O2 in Germany, and the additional benefit of reducing the
        number of cell sites needing to be deployed in both countries for 3G.

        Kai-Uwe Ricke, Board Member of Deutsche Telekom for Mobile and Online
        and chief executive officer of T-Mobile International, said: 'The
        speed with which we have reached agreement on these detailed
        technological and operational points indicates the spirit of
        co-operation we have established on this issue. Reaching this point
        means both groups can start to realise a more cost effective 3G
        network construction in two of the most advanced markets for mobile
        services in the world.'

        mmO2 and T-Mobile believe that these agreements are consistent with
        all existing regulatory and competition obligations. They are
        committed to meeting current 3G licence terms and conditions.



Notes to Editors


        The network roll-out co-operation deal remains subject to any
        necessary regulatory approvals.

        Following the proposed demerger from BT, mmO2 will have wholly owned
        operations in the UK (BT Cellnet), Germany (VIAG Interkom), The
        Netherlands (Telfort), the Republic of Ireland (Digifone) and the Isle
        of Man (Manx Telecom) and will also include Genie, a leading mobile
        internet portal.

        Following its proposed demerger from BT, mmO2 will own third
        generation licences to operate 3G mobile services in the UK, Germany
        and the Netherlands - all territories where its operating companies
        have already introduced GPRS services. mmO2 expects its Irish
        subsidiary to apply for a 3G licence in Ireland when the application
        process commences.

        mmO2 is the holding company of the mmO2 group of companies and O2 will
        be the brand of the customer facing businesses of mmO2 plc.

        This press announcement, which has been prepared by and is the sole
        responsibility of mmO2 plc, has been approved solely for the purposes
        of section 57 of the Financial Services Act 1986 by Merrill Lynch
        International, Morgan Stanley & Co. International Limited and Schroder
        Salomon Smith Barney which are regulated in the UK by The Securities
        and Futures Authority Limited.

        Merrill Lynch International, Morgan Stanley & Co. International
        Limited and Schroder Salomon Smith Barney are advising mmO2 plc and
        British Telecommunications plc in relation to the proposed demerger
        and no-one else and will not be responsible to anyone other than mmO2
        plc and British Telecommunications plc for providing the protections
        afforded to the customers of Merrill Lynch International, Morgan
        Stanley & Co. International Limited and Schroder Salomon Smith Barney
        in relation to the proposed demerger.

        Schroder Salomon Smith Barney is the trading name of Salomon Brothers
        International Limited. Schroder is a trademark of Schroders Holdings
        plc and is used under licence by Salomon Brothers International
        Limited.

        This announcement does not constitute, or form part of an offer, or
        solicitation of an offer, to purchase or subscribe securities.

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 24-hour number: 020 7356 5369 or Simon Gordon on 07710 070698. From outside
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