Sale of Yell

British Telecommunications PLC
27 May 2001



NR 0124
                                    May 26, 2001

                 BT AGREES SALE OF YELL FOR £2.14 BILLION

BT today announced it has agreed to sell Yell Group ('Yell'), its
international directories business, for £2.14 billion to a newly formed
company jointly owned by funds advised or controlled by Apax Partners & Co.
Ventures Limited and Hicks, Muse, Tate & Furst.

The sale of Yell is a further significant step in BT's restructuring
programme. BT will use proceeds from the sale to reduce net debt. The
consideration comprises £2.04 billion in cash and £100 million in interest
bearing vendor loan notes. Completion of the sale, which is conditional on
Hart Scott Rodino clearance, is expected by the end of June.

The sale follows the announcement on May 10, 2001 that Yell was non-core to
the BT Group and that BT was considering plans to sell or demerge it pending
the outcome of a review of the UK Yellow Pages business by the Office of Fair
Trading. The Secretary of State for Trade and Industry announced his decision
following the review on May 11, 2001: Yell was required to cap advertising
rate increases in its UK Yellow Pages business at RPI minus 6 per cent for
four years from January 2002, instead of RPI minus 2 per cent in the preceding
review period.

Sir Christopher Bland, Chairman of BT, said: 'The sale of Yell is good for BT
and its shareholders.'







Sir Peter Bonfield, Chief Executive Officer of BT, said: 'Following what we
viewed as a stringent decision by the DTI, we are pleased with this
transaction which shows further good progress in the implementation of BT's
restructuring.'

Yell operates in the classified advertising market through print,
telephone-based and Internet-based media, including the Yellow Pages and
Business Pages directories, Talking Pages, Yell.com (its Internet site) and,
in the United States, Yellow Book. In the year ended March 31, 2001, Yell had
profits before tax of £163 million on turnover of £774 million.  As at that
date net assets were £695 million before deduction of intra-group loans.

John Condron, Chief Executive Officer of Yell, said: 'We are very excited
about the prospects for Yell as an independent business. With our commitment
and focus and the financial support of our new owners, Yell will be well
placed to pursue our strategic objectives.

'We intend to develop our position as a leading provider of classified
advertising services in the UK and the US. In addition, we will have greater
flexibility to capitalise on emerging opportunities and build on our
relationships with customers, particularly small and medium sized businesses.'







BT was advised on the sale by Rothschild and Morgan Stanley & Co. Limited.

                     -------------------------------------------------

 Inquiries about this release should be made to the BT Group Newsroom on its
24-hour number: 020 7356 5369. From outside the UK, dial [phone]. All
           BT group news releases can be accessed at the web site:

                      http://www.groupbt.com/mediacentre

Yell
Richard Duggleby               + 44 (0) 118 950 6206
Jon Salmon                     + 44 (0) 118 950 6656



Rothschild                     + 44 (0) 20 7280 5000
Warner Mandel
Laurent Haziza



Morgan Stanley & Co. Limited   + 44 (0) 20 7425 8000
Adrian Mee



This announcement, which has been issued by and is the sole responsibility of
BT, has been approved by N M Rothschild & Sons Limited and Morgan Stanley &
Co. Limited, which are regulated in the United Kingdom by The Securities and
Futures Authority Limited, solely for the purpose of Section 57 of the
Financial Services Act 1986.  Each of N M Rothschild & Sons Limited and Morgan
Stanley & Co. Limited is acting for BT and no one else in relation to the sale
described above and will not be responsible to anyone other than BT for
providing the protection afforded to its customers nor for providing advice in
relation to such proposals.


Notes to editors:



Yell

Yell is BT's international directories business.  It operates in the
classified advertising market through print, telephone-based and
Internet-based media.

Yell is a leading provider of classified advertising directories and
associated products and services, principally to small and medium-sized
enterprises and consumers in the United Kingdom and the United States.  Its
products and services are designed to generate business leads by connecting
buyers and sellers through an integrated portfolio of advertising solutions
including printed, telephone- and Internet-based directories.  In addition, it
provides a growing range of business-to-consumer and business-to-business
products and services through new media, primarily through the Internet.

Yell's activities are:

*        UK Printed Directories: Yell publishes the Yellow Pages consumer
directories and the Business Pages business to business directories and is the
largest classified directory publisher in the United Kingdom.

*        US Printed Directories: Yell's classified directory business in the
United States, Yellow Book, is the oldest and largest publisher of classified
advertising directories not affiliated with a US telephone service provider,
and believes that it is the sixth-largest overall based on turnover in 1999.
Although Yell's business is currently concentrated in the area east of the
Mississippi River, Yellow Book has been successful in entering new geographic
markets in the United States, both organically and by acquisitions.

*        On-line Services: On-line products and services are based on Yell's
Internet site, Yell.com, and include on-line advertising, web site design and
hosting services, and business information services.

*        Other businesses including Talking Pages and The Business Database:
Talking Pages is a 24-hour, telephone-based, operator-assisted service which
provides up-to-date telephone information on businesses and services
throughout the United Kingdom through a single telephone number. The Business
Database rents business lists to customers operating in the
business-to-business market, charging on a per-use basis.  It also provides
database development and management services and advertising campaign
management services for telemarketing and direct-mail campaigns.