Mobility strategy statement

BT Group PLC
10 April 2002

For Immediate Release

10 April 2002



                   NEW MOBILITY STRATEGY COULD BE WORTH £500M

                          EXTRA REVENUE IN FIVE YEARS

      • BT to create UK's first Public Access Wireless LAN network
          • Launch of new fully-BT-branded Mobility Services
      • BT to buy airtime from mm02 and offer unified billing and customer
        service under own brand
      • Focus on integrated mobile and fixed line solutions
      • New mobility strategy expected to contribute new revenue of £180m a
        year by 2004/05 and could rise to £500m per annum in five years
      • BT's mobility solutions will help corporate customers achieve optimal
        'business agility'



BT today (Wednesday 10 April) followed Group CEO Ben Verwaayen's recent review
of the company's strategy by unveiling new mobility initiatives that are
expected to deliver additional revenues of £180m a year by 2004/05.

The mobility strategy focuses on delivering fully BT-branded mobile solutions
and includes the launch of the UK's first-ever public access Wireless LAN
network, combining the flexibility of mobile devices with the speed and power of
BT's broadband network.

Today's announcement forms part of BT's 'Business Agility' Week, which explores
the ways in which businesses can adapt to modern demands through cultural change
and smart use of technology, allowing work to be done just as effectively away
from static locations. BT's new mobility initiatives will help make the concept
of 'business agility' a reality for the company's corporate customers.



Pierre Danon, chief executive officer, BT Retail said: "We are already market
leaders, with more than 20 per cent of subscribers among major business
customers. Yet, since the demerger with mmO2, there has been a false assumption
that, because we do not now physically own a network, we are somehow no longer
in mobile. As today's announcements demonstrate, that could not be further from
the truth. The major initiatives announced today will deliver cutting-edge,
integrated services to our customers, consolidate our leadership position in the
mobile solutions market and provide the answers for those companies wishing to
improve their 'agility'.

"As I told the City before Christmas, we expect our mobility strategy to
generate £180m in new revenue by the end of 2004/05. We are confident this will
be a fast-growing market and it could be worth an extra £500m of revenue per
annum within five years."

UK's first Public Access Wireless LAN network

Anticipating a decision from the UK Radio Agency to allow commercial services to
operate across the 2.4 GHz radio spectrum, BT is moving quickly to build the
UK's first public access Wireless LAN network by installing around 400 hotspots
by June 2003. BT estimates there will be up to 4,000 sites by June 2005 and will
be working closely with its partners Motorola and Cisco to build the new
network.

Confirming this, Danon said: "We intend to build a national network of access
points around key public sites such as hotels, railway stations, airports, bars
and coffee shops - all within reach of business travellers, commuters and other
users. We are already working to secure this. We are talking to Costa Coffee
about public Wireless LAN and are in advanced discussions with all the leading
retailers and property owners to create the right geography and numbers of
outlets. I'm hoping to be able to announce more news just as soon as these deals
are signed."

Using the service is simple. As long as users are within range of a Wireless LAN
hotspot (approx 100 metres) and have the right software on their laptop or
handheld device, they will be able to access the Internet or get secure access
to their corporate networks at speeds of up to 500 kbps and several times faster
than current wireless connections, enabling them to send and receive large
quantities of information at broadband speed. At the same time, BT will be
working with corporate customers to bring the same technology into their offices
- heralding the dawn of the truly wireless office and creating new, flexible
ways of working.

Current estimates are that Wireless LAN will be at least three times faster and
less than half the price of 3G technology. It also uses simple and readily
available current technology.

Danon added: "One of the advantages of Wireless LAN is the simplicity of its
adoption, requiring no additional cabling and no digging. By only modest
investment, we'll achieve a high-speed network and be able to exploit BT's
existing and growing broadband network. That, coupled with the recent price cuts
announced in wholesale Broadband access, enables us to make our Wireless LAN
network really affordable for our customers. It complements mobile services for
those who are 'on the pause' rather than 'on the move'."

Full product details will be available in June and billing options will range
from an annual subscription-based charge for regular users and business
customers to a pre-paid vouchers solution sold in retail outlets for more
occasional use, which will become available later in the year.

Future opportunities for Wireless LAN will include a home networking solution
from BT before the end of the year. The Wireless LAN initiative is expected to
generate new revenues of at least £30m a year by the end of 2004/05.

BT Mobility Services

From June 2002 BT is also launching its new Mobility Services portfolio which
will bring a wide range of mobile products to its business customers and create
a new Service Provider business in the mobile market, giving BT business
customers unified billing and customer service for the first time under the BT
brand. The new service is expected to deliver around £150m a year in additional
revenues by the end of 2004/05. BT is targeting a 12-15 per cent share of the
business market for mobility services by 2006/7 and delivering margins in the
same year of more than 10 per cent.

BT branded from top to bottom, the new service will buy airtime from mmO2 and
provide the overall customer support as part of their BT relationship. BT has
already agreed wholesale airtime terms with mmO2 to launch the new product range
and has an existing three-year agreement to act as its sales channel in the
business market. It will deliver today's GSM and GPRS services, as well as
tomorrow's 3G solutions. The service will include access to other mobile devices
such as the Blackberry, which allows real-time email access on the move without
dependency on a Wireless LAN hotspot.

BT is also developing a portfolio of business solutions, offering the benefits
of mobility through integrated applications. Working with partners, including BT
Ignite, BT already offers solutions based around GPRS and Wireless LAN, covering
personal information management, mobile office and highly-secure access to
corporate intranet services. The new offerings will include location and
personalised service applications as well as solutions for workforce management
and enablers for a mobile sales force. Further announcements about these
solutions will follow this summer.

Pierre Danon said: "Today we're building on the strength and trust of the BT
brand and making it clear to our customers that we can connect their world,
wherever they are, backed up by a single point of customer service and supplier
relationship. We intend to exploit our ability to deliver integrated
communications solutions, covering voice and data, mobile and fixed line,
working with our growing ecosystem of world class partners and BT's own internal
expertise. Above all, we bring a passion and focus on the customer experience in
addressing their integrated communications needs for today and for the future.

"What we are announcing today clearly demonstrates how BT can give businesses
the agility they need to compete and succeed, by providing the technological
solutions to allow their employees to work as effectively away from the office
as they do in it. We have the mobility solutions to help them on the move and
the forthcoming Wireless LAN network to allow them to work 'on the pause'. The
picture will be complete when we announce shortly a powerful package that will
transform the home-working experience. This all aligns with our vision of '
Connecting your World. Completely'."

ENDS

High resolution images of Pierre Danon and David Hughes (Director of Mobility)
will be available for the media to view and download at 9.45am, 10 April 2002,
from www.vismedia.co.uk.

For further information:

Elizabeth Ballard, Fishburn Hedges          tel: [phone]

BT Group Newsroom                              tel: [phone]

BT Retail is one of the businesses that make up the BT Group. Others include BT
Ignite, BT Wholesale, BTopenworld and BTexact Technologies. It is the UK's
leading communications service provider and the prime channel to market for the
other businesses in the Group. It has 21 million residential and business
customers, a turnover of £11.8bn (in the last full financial year) and around
50,000 employees.



                      This information is provided by RNS
            The company news service from the London Stock Exchange