German 3G Licence

British Telecommunications PLC
17 August 2000

   
   BT'S JOINT VENTURE IN GERMANY WINS 3G LICENCE


BT today announced that Viag Interkom, its joint venture

in Germany which it plans to take control of, has been

awarded a third generation mobile licence for 16.5

billion marks (£5.13 billion).

     The company bid successfully for two 10 MHz blocks

of spectrum to enable future provision of the next era of

mobile telephony over Germany's future Universal Mobile

Telecommunications System (UMTS) network. The network is

due to become operational in 2002.

     Sir Peter Bonfield, chief executive of BT, said: 'We

are delighted that, along with our partners, we have

won a 3G licence in Germany, adding to our successes in

UK, Japan, Spain and the Netherlands.

     '3G is the future of mobile communications and with

this latest licence award in Europe's key mobile

telephony market, BT has again shown it is at the

forefront of crucial developments.'

     'This licence will enable us to capitalise on our

already strong presence in Germany with our world-beating

technology.'

     BT announced earlier today that it had reached

agreement enabling it to take control of Viag Interkom by

buying E.ON's 45 per cent stake in the company.

Currently, BT has a 45 per cent stake in the venture and

Norwegian operator Telenor has 10 per cent.

     Maximilian Ardelt, chief executive of Viag Interkom,

said: 'Winning the licence is the key to the largest

market in Europe. Viag Interkom will now aggressively

pursue its innovation-driven strategy to make the

Internet a mobile experience, developing the multimedia

world for millions of customers in the future.'

     Viag Interkom offers a full range of communications

products and services for homes and businesses, including

fixed voice, mobile, data, Internet and managed Internet

protocol.

     Last year it launched Europe's first fully

integrated fixed-mobile service, Genion. The company will

take a significant step towards 3G mobile services later

this year with the first German commercial launch of its

General Packet Radio Service (GPRS), enhancing its

current E2 mobile network.

     

NOTES

     As a result of the licence win, the exercise price
for the call option agreed with E.ON will now be adjusted
upwards by £400 million as the final licence fee cost
less than had been factored into the transaction terms.
     
     There has been no other significant change affecting
any matter contained in our notification of earlier today
and no other significant new matter has arisen which
would have been required to be mentioned in that earlier
notification if it had arisen at the time of the
preparation of that notification.