Issue of Debt

BT Group PLC
17 November 2003



                                     Press Release

BT to monetise its interest in LG Telecom through an issue of exchangeable bonds


London, November 17th, 2003 - BT Group plc ("BT") announces today that it is
issuing bonds (the "Exchangeable Bonds") exchangeable into its 16.6% stake in LG
Telecom ("LGT"). Proceeds from the offering of approximately US$168-176 million
(£100-105m) will be used for general corporate purposes.


The Exchangeable Bonds will rank pari passu with the senior indebtedness of BT,
will be denominated in US dollars and will mature in December 2008. The
Exchangeable Bonds will pay a coupon of approximately 1.0-1.5% per annum, and
will be exchangeable into 45,992,408 shares in LGT at a premium of approximately
15-20% to LGT's current share price.


The final terms of the Exchangeable Bonds will be announced at the conclusion of
the bookbuilding process launched this morning. Bookbuilding is expected to
conclude tomorrow but may finish earlier.


BT has previously identified its interest in LGT as non-core, and this offering
forms part of BT's non-core asset disposal programme. Today's issue will enable
BT potentially to dispose of its stake in LGT at a price in excess of the
current share price if the share price appreciates during the life of the
Exchangeable Bond.


LGT is a leading Korean provider of wireless telecommunications services. It is
listed on KOSDAQ and has a market capitalisation of KRW 1,044bn (£523m).


Application has been made to list the Exchangeable Bonds on the Luxembourg Stock
Exchange. Prior to such listing, an offering circular will be published in order
to meet the listing requirements.


Lehman Brothers International (Europe) and Deutsche Bank AG London are Joint
Bookrunners to the Exchangeable Bond issue.


About BT


BT is one of Europe's leading providers of telecommunications services. Its
principal activities include local, national and international
telecommunications services, higher-value broadband and internet products and
services, and IT solutions. In the UK, BT serves over 20 million business and
residential customers with more than 29 million exchange lines, as well as
providing network services to other licensed operators.


In the year ended 31 March 2003, BT's turnover was £18,727 million, with profit
before taxation of £1,829 million.


Disclaimer


This is not an offer of securities. The securities will not be offered for sale
in the United States, Canada or Japan. The Bonds and the Shares are not being
registered under the US Securities Act of 1933, as amended (the "Securities
Act") and may not be offered or sold in the United States or to or for the
account or benefit of US persons (as such terms are defined in Regulation S
under the Securities Act) unless registered under the Securities Act or pursuant
to an exemption from registration. BT does not intend to register the securities
under the Securities Act.


In the United Kingdom, this announcement is directed exclusively at persons who
fall within article 19 or article 49 of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2001. The Exchangeable Bonds referred to in
this announcement will be issued only to such persons.


Stabilisation / FSA.


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