Update re Net2S

BT Group PLC
13 December 2007


                                                                13 December 2007

                   BT SIGNS DEAL TO ACQUIRE 68.6% OF NET2S SA


 BT announces today that it has signed the share purchase agreement to acquire
68.6% of Net2S SA's ("Net2S") outstanding issued share capital (the "Block")
from four controlling founding shareholders ("the Controlling Shareholders") at
a price of €5.27 per share (the "Acquisition"). The deal values the entire
outstanding Net2S issued share capital at approximately €68.5 million. This
announcement follows the statement released by BT on 10 October 2007 confirming
it was in exclusive discussions with the Controlling Shareholders.

 As consideration, upon settlement of the Tender Offer (as defined below), BT
will issue new BT shares in exchange for 5,566,022 Net2S shares representing
42.9% of Net2S' issued share capital held by three founding shareholders. The
number of BT shares to be issued will be calculated at that time based on a 3
day average quoted price of BT's Shares. The remaining 3,341,244 Net2S shares of
the Block will be acquired for cash at the closing of the Acquisition. In
addition to the price offered per share, it is proposed that before closing of
the Acquisition, Net2S distributes €5 million of cash to all its current
shareholders by way of a special dividend, equating to €0.385 per share.

 Net2S provides technology consulting and engineering services for critical
business solutions to large corporate customers. The company is headquartered in
Paris and employs approximately 800 people operating mainly in France, but also
with a presence elsewhere in Europe, USA and Morocco. For the year ended 31
December 2006 Net2S reported revenues of approximately €77 million, and €65.4
million for the first three quarters of 2007.

Subject to completion of the Acquisition of the Block and to approval from
France's Autorite des Marches Financiers, BT will implement a public tender
offer for the remaining issued share capital of Net2S at a price of €5.27 per
share (the "Tender Offer").  The consideration for the Tender Offer will be
payable in cash.  Net 2S's board of directors has given its preliminary approval
to the Tender Offer.

Closing is subject to certain usual conditions precedent being satisfied,
including an independent expert's report. A further announcement will be made in
the coming weeks when the Acquisition of the Block is completed.

 Notes

The four founding shareholders from whom BT is purchasing the Block are
Mr.Bernard Razaghi, Mr.Pascal Petit, Mr.Ali Pichvai and Mr.Christophe Canonne.

 The actual number of BT shares to be issued to those three founding
shareholders receiving BT shares as consideration will be determined by
reference to the BT share price as at the earlier of the time of final
settlement of the Tender Offer and 30 April 2008.

 For further information

Inquiries about this statement 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
news releases can be accessed at our web site: www.bt.com/newscentre.


About BT

BT is one of the world's leading providers of communications solutions and
services operating in 170 countries.  Its principal activities include networked
IT services; local, national and international telecommunications services;
higher-value broadband and internet products and services and converged fixed/
mobile products and services.  BT consists principally of four lines of
business: BT Global Services, Openreach, BT Retail and BT Wholesale.

 In the year ended March 31, 2007, BT Group plc's revenue was £20,223 million
with profit before taxation of £2,484 million.

 British Telecommunications plc is a wholly-owned subsidiary of BT Group plc and
encompasses virtually all businesses and assets of the BT Group plc.  BT Group
plc is listed on stock exchanges in London and New York.

 For more information, visit www.bt.com/aboutbt




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