Demerger Update

British Telecommunications PLC
15 November 2001



                                                             November 15, 2001


                          BT RECEIVES COURT APPROVAL

                          FOR SCHEME OF ARRANGEMENT



BT today received final court approval prior to the demerger of the mmO2
business.

The demerger process involves the creation of two new holding companies: one
for the BT Group businesses, and one for the mmO2 businesses through a
court-approved Scheme of Arrangement. The High Court of Justice in England and
Wales today completed hearings which sanctioned the Scheme of Arrangement and
approved the reduction of the share capital of BT provided for under the
Scheme.

BT confirmed that the demerger process is on schedule and the listing of the
two new companies, BT Group plc and mmO2 plc, on the London and New York Stock
Exchanges is expected on November 19, 2001.

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The contents of this announcement, which has been issued by, and is the sole
responsibility of, British Telecommunications public limited company, has been
approved by Cazenove & Co. Ltd which is regulated in the UK by The Securities
and Futures Authority, solely for the purposes of Section 57 of the Financial
Services Act 1986. Prices and values of, and income from, shares may go down
as well as up and an investor may not get back the amount invested. It should
be noted that past performance is no guide to future performance. Persons
needing advice should consult an independent financial adviser.

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