Acquisition

Scottish & Southern Energy PLC
02 April 2003

                                                                    2 April 2003


                        SSE TELECOM ACQUIRES NEOS FOR £13.4m

SSE Telecommunications (SSET), the telecommunications subsidiary of Scottish and
Southern Energy (SSE), has today completed the acquisition of Berkshire-based
Neoscorp Ltd (Neos) for a total cash consideration of £13.4 million.

SSET manages 2,300km of fibre and 15,000 sites, mainly installed on SSE's own
electricity infrastructure in the north of Scotland and central southern
England, with further links to London, Glasgow and Edinburgh. It provides
network and infrastructure capacity and other services to over 100 commercial
and public sector organisations.

Neos was formed in 1997 and has established a 4,500km fibre network in the UK,
extending from Aberdeen to London and Land's End. It too provides network and
infrastructure capacity and other services to more than 300 commercial and
public sector customers and is one of the fastest-growing companies in the UK.

SSET and Neos have previously contracted and worked together, and their business
models, technologies and target markets are complementary. The combined business
will have an annual turnover in excess of £50m. It will have a bigger, UK-wide
network, and larger customer base and will be able to secure both cost savings
and other synergy benefits.

Looking ahead, it will have financial strength and a flexible range of services
to meet customers' needs as the market develops and grows.. The acquisition is
expected to be earnings enhancing from this year and make a significant
contribution to telecoms earnings in the years ahead.

Ian Marchant, Chief Executive of SSE, said: 'The acquisition of Neos and its
consolidation with our existing business gives SSE a UK-wide telecoms business
and greater operational capability in the telecoms market. It is a good
opportunity to capture synergy benefits and is in keeping with our approach of
helping to expand SSE further through the incremental addition of assets which
will cumulatively deliver significant shareholder value.'

                                    - ENDS -


Notes to editors:

Neos

Neos (the greek word for 'a new form of') is the UK's premier Ethernet Service
Provider (ESP), having created the UK market for national Ethernet services in
2001. Neos operates Neosnet(TM) , the UK's only Layer 2 MPLS Ethernet network,
providing national and metro Gigabit Ethernet network services featuring Liquid
Bandwidth(TM) to ISPs, carriers, corporate customers and public sector
organisations. In January 2003 Neos announced they acquired their 500th
customer.

Neosnet(TM) features a national layer 2 MPLS Ethernet network which 
interconnects the major business conurbations in the UK with access to over 100 
POPs nationwide, as well as one of the densest network offerings in the Greater
London area, Neosnet(TM) Metro, which provides an independent broadband
interconnection of co-location sites to 30 PoPs and access to further network
nodes within the M25.


SSE Telecom (SSET)

SSET manages one of the largest private telecoms networks in the UK. SSE has
invested £70m in SSET, which now has over 2,500km of fibre optic cable installed
on the Group's own electricity infrastructure and further links to London,
Glasgow and Edinburgh. The business has over 100 major customers, comprising all
the major mobile phone operators like Vodafone and T-Mobile, other telecoms
carriers and major telecoms users such as the emergency services, local councils
and other public sector organisations.

Scottish and Southern Energy (SSE)

SSE is one of the largest energy companies in the UK and a FTSE top 100 company.
SSE supplies electricity and gas to nearly five million customers throughout the
UK under the Southern Electric, Scottish Hydro-Electric and SWALEC brands.

For further information contact:

NEOS

Greg Lovell - Firefly Communications

Tel: [phone]

Mobile [phone]

E.mail: [e-mail]

Neil Fairbrother, Marketing Director - NEOS

E.mail: [e-mail].

Or visit: www.neosnetworks.net

Scottish and Southern Energy

Alan Young - Director of Corporate Communications

Denis Kerby - Media Relations Manager

Tel: [phone] (24-hours)

E.mail: [e-mail]

Or visit: www.scottish-southern.co.uk


                      This information is provided by RNS
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