Acquisitions of Interest

National Grid Group PLC
23 May 2000


National Grid announces two South American telecom investments

The National Grid Group plc (LSE:NGG and NYSE:NGG) announced
today two investments designed to further the company's
growth in the Latin American telecommunications market.

The company has acquired a 30% interest in Telefonica
Manquehue (TM), a telecommunications company based in
Santiago, Chile. National Grid's investment of US$80
million will provide capital to expand TM's fibre optic
network in Santiago and exploit the rapidly growing voice
and data market in Chile's capital city.

Also, the company is investing US$61 million for a 50%
interest in Southern Cone Communications Company, SA, a new
telecommunications joint venture in Argentina and Chile.
National Grid and partners Telefonica Manquehue (30.1%) and
US-based Williams Communications (19.9%)(NYSE:WCG) will
invest a total of US$220 million to develop a 4,300
kilometre (2,660 mile) broadband backbone network across
Argentina and Chile. The total investment will come from a
combination of equity and debt.

David Jones, Group Chief Executive, said

     'These two investments build on our growing experience
     in start-up telecom ventures, which began with Energis
     in the UK and has since been transferred to Intelig in
     Brazil, a new project in Poland, and now Argentina and
     Chile.  They will further our plans to become a
     significant telecoms player in South America, targeting
     the continent's  most vibrant economies, and they will
     help answer the market's rapidly growing demand for
     advanced telecommunications services.'
     
Wob Gerretsen, Group Director, Latin America, said
     
     'These deals have the right partners, the right
     markets, and the right fit with our existing
     operations.  By investing in Telefonica Manquehue, we
     gain immediate access to the expertise and customer
     base of one of Santiago's leading alternative telecoms
     providers. Williams brings its international telecoms
     marketing experience. Santiago has a population of 5
     million people representing two-thirds of Chile's Gross
     Domestic Product. The Southern Cone network leverages
     our investment in the Argentine transmission system and
     has the potential to be connected to the Intelig
     telecoms network in Brazil, so strengthening the
     region's telecoms infrastructure.'
     
Telefonica Manquehue investment

TM is a competitive local exchange carrier (CLEC) providing
local and long distance telephony, cable TV and Internet
services to customers in Santiago. Services are provided
over TM's 440 km (260 mile), high speed fibre optic backbone
network, which has 67,000 lines in operation and expects to
reach some 200,000 customers by the end of 2002.

National Grid's investment will enable TM to rapidly expand
its fibre optic network to more than 1,100 km (660 miles),
and upgrade it to ensure that TM is a leader in a wide range
of voice, multi-media and high-speed broadband data
services, which will be marketed aggressively in Santiago.

Other partners in TM are MetroGas (25.54%), a consortium of
major Chilean and international energy companies; the Rabat
family (21.23%); Williams Communications (16.46%); and Xycom
(6.77%).  MetroGas holds the concession to convert Santiago
to natural gas.  This provides a rare opportunity to
establish at low cost an underground fibre optic network in
the densely populated city of Santiago as the natural gas
network is rolled out.

Southern Cone Communications joint venture

Southern Cone's state-of-the-art Synchronous Digital
Hierarchy backbone network will facilitate telecommunications 
competition in Chile, and in Argentina where the market will 
liberalise fully in November 2000. Initially, the company will offer 
wholesale voice and data transmission services to telecommunications 
carriers and other businesses in both countries.

The Southern Cone network will link the major Argentine
cities of Buenos Aires, Rosario, Cordoba, Mendoza and
Neuquen, and include a spur across the Andes to Santiago.

In Argentina, the network will consist of two sections.
First, National Grid, which is joint owner of Argentina's
high voltage electricity transmission company Transener,
will provide access to fibre optic cable already installed
along Transener's 4th Line, which connects Buenos Aires to
Bahia Balanca and Neuquen. The other half of the Argentine
component of the network is being installed in roadside
ducts.

The line connecting the Argentine loop to Santiago is being
installed in telecommunications ducts alongside the GasAndes
international gas pipeline, which crosses the Andes
mountains from San Rafael in Argentina to Santiago in Chile.
The Andes have presented a natural barrier that, up to now,
had constrained cross border telecommunications development.
The underground pipeline route will offer a secure Andean
crossing for Southern Cone's customers. Installation of the
fibre optic cable has begun and is well advanced.

In addition to the potential to be linked to the Intelig
network in Brazil, the Southern Cone network has the
potential to be linked to proposed submarine cables arriving
at Valparaiso, Chile, on the Pacific coast and Las Toninas,
Argentina, on the Atlantic coast, providing access to
overseas traffic.


Contacts

National Grid             [phone]

Jill Sherratt     mobile: [phone]   
Diane Boddy 
Susan Stevens

Citigate Dewe Rogerson    [phone]
      
Anthony Carlisle  mobile: [phone]
Sue Pemberton

Telefonica Manquehue                    

Cristobal Philippi        [phone]                     
Jake Steelman             [phone]  
                   
Williams Communications

Lynne Butterworth         [phone]
Patricia Kraft            [phone]