Options Explored for Network Construction Business

British Telecommunications PLC
3 May 2000

                              

              BT EXPLORES GROWTH OPTIONS FOR UK

                NETWORK CONSTRUCTION BUSINESS

BT today launched a fundamental review of its UK-based

network construction business and announced that it is

considering separating it from the company's network

operations.

     The options currently under active consideration for

the future ownership of the construction business are the

creation of a joint venture, a management buy-out or

flotation. A feasibility study has now been launched to

establish the best approach.

     Networkbuild, a unit within BT's networks and

information services division, currently employs about

10,000 people. It carries out work with an estimated market

value of around £400 million a year.

     Management aims to capitalise on the massive growth in

commercial opportunities in network construction arising

from the roll out of technologies such as ADSL and 3G mobile

and the explosion in licensing of new operators. Increasing

opportunities exist to carry out work for other licensed

operators both in the UK and overseas.

     Paul Reynolds, managing director, networks and

information services, said: 'In a booming market for mobile,

Internet, data and access networks, this move has the

potential to unleash the tremendous growth locked up within

the network construction business. It gives its people the

freedom to get out there into the open market and deliver

increased value both for their own business and for BT.'

     Dave Mowbray, general manager of Networkbuild, said:

'This is a huge opportunity for us to grow in a thriving

sector. We have the resources, skills and track record to

compete successfully in a vigorous and demanding market.

Network construction is growing fast. Some exciting and very

tangible business opportunities exist. This is a very

positive move for the business and the people employed

within it.'



Note to editors: Networkbuild was created within BT's
networks and information services division in 1996. It
undertakes capital construction work for BT creating
infrastructure for voice, data, mobile and IP traffic and
has been winning competitive bids for an increasing volume
of external business, including from overseas.