Disposal

British Telecommunications PLC
15 May 2001



                                        May 15, 2001


  BT DISPOSES OF HOLDING IN BRITISH INTERACTIVE BROADCASTING (OPEN) TO BSKYB

BT announced today that it has exercised its option to sell its 19.9 per cent
holding in BiB(Open) to BSkyB. The sale and purchase agreement with BSkyB was
announced in July last year and has now been completed following regulatory
clearance.

BT will receive payment from BSkyB in tranches over the next two years. The
first tranche, consisting of approximately 19.1 million BSkyB shares, will be
delivered 45 days after yesterday's option exercise. As the second tranche, BT
will receive BSkyB shares or loan notes with a value of around £120 million,
which will be released in 18 months time. A further tranche, in BSkyB shares
or loan notes, also to a value of around £120 million, may be paid in 2003
depending on the BiB business reaching a specified valuation.

On receipt of each tranche of BSkyB shares, BT will be free to sell up to 50%
at any time. There are 12 month lock-up provisions in respect of the remaining
50% of each tranche.

Andy Green, CEO of BTopenworld, BT's mass market Internet Service Provider
which has included Open in its portfolio of businesses, said: 'The sale of our
holding in BiB is part of BTopenworld's strategy to focus financial and
operational resources on our core BTopenworld branded Internet Services and to
maximise value for shareholders.

'We will continue to work closely with BSkyB as the market for convergent
services develops. We remain committed to interactive TV and the new
possibilities which will be brought about as broadband services such as ADSL
develop, and will continue to pursue various options in this area.'

Note to editors

BT, British Sky Broadcasting, Midland Bank and Matsushita Electric announced
the formation of BiB to deliver digital interactive services to TV viewers in
the UK, in May 1997.


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