Broadband pricing

BT Group PLC
13 November 2006





DC06-604 13 November, 2006


                  BT OUTLINES NEW WHOLESALE BROADBAND PRICING

BT today revealed how it plans to reduce its wholesale broadband pricing once
1.5m lines have been unbundled. 1  The indicative prices are aimed at offering
service providers a cost effective alternative to Local Loop Unbundling (LLU).

The new pricing structure 2  is intended to come into effect from May 2007 - at
which point BT believes the UK will have achieved 1.5 million LLU lines - and
will be implemented in two stages. The unveiling of the proposals will enable
service providers to plan ahead.

From May 2007, service providers will see the rental charge for the most highly
used wholesale broadband product - BT IPstream - reduced by 9 per cent, with the
price coming down from £8.40 per line per month to £7.63. This price is expected
to be reduced further in the second round of changes planned for January 2008.

There will also be further savings for service providers at high density
exchanges. The current rebate scheme that applies at 561 of these exchanges is
set to be revised to cover 1,016 exchanges. The level of this rebate is also set
to increase from £1.10 to £1.24 from May 2007. The rebate reflects the lower
cost of providing broadband in these areas.

The increase in the rebate - combined with the lower rental price - will reduce
the net monthly rental price (i.e. rental less rebate) in these exchanges from
£7.30 to £6.39. This is a reduction of 12.5 per cent. Further increases to the
rebate are also planned from January 2008.

Cameron Rejali, BT Wholesale managing director for products and strategy, said:
"These pricing proposals will help our ISP customers develop their business
plans and compete effectively in the broadband market. The proposed prices
better reflect the economies of scale and input costs we face, meaning we can
deliver lower average costs to ISPs. The industry has been waiting to hear how
we will enable them to compete with the local loop unbundlers and so these
proposals should allow them to plan ahead."

Service providers choosing the BT Datastream product - a simpler service than
that provided by the BT IPstream product - are also set to benefit from the
revised rebate scheme. The existing rebate of £1.15 for connections to the
current 561 exchanges will be extended to the 1,016 designated exchanges. This
will effectively reduce the rental charge per end user from £7.05 to £5.90 in
those areas from May 2007.

BT Wholesale has started to purchase the LLU product and will consequently be
charged for the provision and cessation of a line from Openreach. From May 2007,
BT Wholesale intends to reflect these charges through connection and cessation
charges for its service provider customers. As a result, the connection charge
for BT IPstream and BT Datastream products will come down from £40 (ex VAT) to
£34.86 (ex VAT) reflecting the charges from Openreach.

A cessation charge is also set to be introduced where service providers order
the termination of service on an end user's line. This charge of £33.75 (ex VAT)
reflects the input costs from Openreach. The cessation charge will not apply
when a consumer wants to move from one service provider to another and both
service providers use the MAC process. BT's aim is to encourage more service
providers to participate in the MAC process, which is designed to make it
simpler for consumers to move from one service provider to another. The
cessation charge will also not apply where there are bulk migrations to LLU.

Finally, BT Wholesale also confirmed today it intends to trial Wholesale
Broadband Connect in selected exchanges across the UK from Summer 2007. This is
a new next generation broadband service created using 21CN. Using ADSL and
ADSL2+ technology, it will provide national connectivity enabling communications
providers to connect their broadband and data customers to their own networks
and services efficiently and cost effectively. With planned speeds of up to 24
Mbit/s, BT Wholesale Broadband Connect is set to be available to almost half the
UK from early 2008, with nationwide coverage linked to the rollout of 21CN.


Note: Prices are subject to BT's ongoing legal and regulatory obligations and
commitments and are indicative and could be subject to change prior to formal
pricing notification.


                                     -ends-

.


Inquiries about this news release should be made to Gemma Thomas or Anna Easton
in 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:
                         http://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, and
higher-value broadband and internet products and services. BT consists
principally of four lines of business: BT Global Services, Openreach, BT Retail
and BT Wholesale.


In the year ended 31 March 2006, BT Group plc's revenue was £19,514 million with
profit before taxation of £2,040 million.


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


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


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

 1  Under the Telecommunications Strategic Review, BT made a commitment that it
would not lower the prices of its wholesale broadband offerings until the UK
achieved 1.5 million LLU lines.

 2  The pricing proposals are in line with additional commitments made to Ofcom
to ensure pricing stability in the broadband marketplace.



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