Ofcom Strategic Review

BT Group PLC
28 April 2004



NR0422                                 April 28, 2004


                             OFCOM STRATEGIC REVIEW
                                  BT STATEMENT

                              BT's initial response


BT welcomes the comprehensive review of the UK telecoms sector.  The industry is
changing rapidly as new technologies appear, new companies enter the market and
customer expectations evolve.  Communication is fundamental to the good of
society, and BT wants an environment in which people, businesses and
organisations can benefit from communicating and sharing information in the way
they want when they want.  Ofcom's document, on first view, seems balanced and
well-thought out and appears to recognise some of the fundamental changes that
have continued to take place in the UK telecom sector.

          Ben Verwaayen, chief executive of BT said: "The Ofcom review asks a
number of fundamental questions and we welcome the chance to put forward our
views.  We're pleased that Ofcom say that the review will be fact-based and
forward looking.  A dynamic and forward-looking industry needs a dynamic and
forward-looking regulatory environment."

          The UK market is one of the most highly competitive in the world with
over 350 other licensed operators as well as a host of successful mobile
operators.  These include not only specialist telecoms players but also some of
the biggest and most successful retailers in the country.  There is also a
vibrant cable infrastructure passing 13 million homes. Every person and business
has a real choice for every call they make. In fact, BT currently accounts for
35 per cent of the total UK calls market by value.

          One of the key issues for Ofcom must be to create the proper
environment to encourage investment.  Those who take the risk must have some
certainty about the level of reward.  A proper investment environment is crucial
if the UK is to have a communications infrastructure fit for the new
technologies and services that people and businesses want.   The next generation
of networks, enabling communications between a variety of devices, will not
build itself.

          We're pleased that Ofcom recognises the need for sustainable business
models as well as ensuring that the rewards are there for those who wish to
invest. Subsidising poor business models is not the way forward, sound economic
principles are.

          One question raised is the old chestnut of breaking BT up.  It is, of
course, right that Ofcom asks the question.  The answer is self-evident.  No
other nation has contemplated the break-up of a former incumbent and the
arguments against such a move are well rehearsed.  The UK economy benefits from
a strong, vibrant and competitive BT.  Hundreds of other business and suppliers
benefit from BT's commitment to the UK telecoms sector and an end-to-end
provider is the way to achieve that.


Inquiries about this news release should be made to the BT Group
newsroom on its 24 hour number: 020 7356 5369.  From outside the UK, dial +44 20
7356 5369.  All BT Group news releases can be accessed at our web site:

www.bt.com/newscentre


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