Fixed/mobile phone launch

BT Group PLC
15 June 2005

DC05-379                                                           June 15, 2005

                       BT LAUNCHES WORLD'S FIRST COMBINED

                             FIXED AND MOBILE PHONE

                      BT Fusion "the best of both worlds"

BT today launched the world's first combined fixed and mobile phone service.

The announcement marks an important milestone in the broadband revolution which
is allowing people to communicate in ways they never have before.

BT Fusion works just like a mobile phone when you are out and about, but
switches automatically and seamlessly onto a BT Broadband line when you get
home. That means you get all the convenience and all the features of a mobile
phone but with fixed lines prices and quality.

BT Fusion can offer customers huge savings by allowing calls to UK landline
numbers to be charged at BT landline rates of 5.5p for up to an hour for all
off-peak calls and 3p a minute at peak times.

For example, a BT Fusion 10-minute off-peak rate mobile call from home will cost
up to 95 per cent less than the same call using a typical mobile competitor
package.

Calls over broadband in the home means customers can make a mobile call but with
the quality of a fixed-line and worry less about the signal being lost or
dropping out. A recent survey of BT Broadband customers revealed that as many as
19 per cent had experienced problems with mobile coverage in the home.

It is all made possible by a special access point installed in the home - called
the BT Hub - which uses Bluetooth wireless technology to switch the BT Fusion
handset seamlessly to the broadband line - even in mid-call.

The BT hub also works as a wireless (Wi-Fi) router- allowing the user to connect
up PCs, laptops, games consoles and printers wirelessly around the home.

Ian Livingston, CEO for BT Retail, said: "We promised to launch the world's
first seamless combined fixed and mobile service and now we're doing it. The
service will transform the communications landscape and bring excellent value to
customers.

"For the first time customers will be able to get the best of both worlds in one
service - combining the convenience and features of a mobile with fixed line
prices and quality."

"The cornerstone of this strategy is BT Broadband which can be wirelessly
enabled - to link up everything from your laptop, PC, games console to your home
security system - and now your mobile."

"We know that many of our customers enjoy the convenience of their mobile phones
when they're out and about - but switch to using a landline phone when they
arrive back home to save money or because they have little or no mobile
coverage.

"We're now delivering a world-first service that allows our customers to benefit
from BT's great value landline rates with guaranteed coverage at home. You can
even set the handset to work at more than one location.

"The launch of BT Fusion will start with approximately 400 early adopter
customers, with the service being widely available for delivery in September.
Customers who want to sign up for BT Fusion ready for full roll-out can register
their interest at www.bt.com/btfusion.

"BT is taking a world lead in pushing forward fixed-mobile convergence and BT
Fusion will form a significant part of our growth plans."

For further information please contact Jon Carter at BT on 020 7356 4523

Alternatively inquiries about this news release can 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: http://www.bt.com/newscentre


Notes to Editors:

A comparison with the best core tariff price for "similar" competitor tariffs
(Monthly fee applies/Competitors' fees vary)

Call type : from mobile    5 min  10 min  30 min 60 min  % saving  % saving 
device to UK landline in                                  10 mins   10 mins                           
the home                                                peak call  off-peak
                                                                       call
BT Fusion 200 Off Peak      5.5p    5.5p    5.5p   5.5p                                                
BT Fusion 200 Peak           15p     30p     90p  £1.80                                               
"3" Videotalk 500         £ 0.25  £ 0.50  £ 1.50 £ 3.00       40%       89% 
Orange 200+100 online     £ 0.50  £ 1.00  £ 3.00 £ 6.00       70%       95% 
O2 (Anytime) 200          £ 0.50  £ 1.00  £ 3.00 £ 6.00       70%       95% 
T-Mobile Relax 200 self   £ 0.50  £ 1.00  £ 3.00 £ 6.00       70%       95% 
service                                                                                                             
Virgin Pay monthly 200    £ 0.75  £ 1.00  £ 2.00 £ 3.50       70%       95% 
Sainsbury's o2 200        £ 0.50  £ 1.00  £ 3.00 £ 6.00       70%       95% 


1 Price comparisons made against core tariff rates - excludes any offers and
promotions which may run from time to time

2 Comparative price study prepared for BT by an independent professional firm:
May 2005

3 "Similar" competitor offerings defined as offers with 200 inclusive anytime
any-network GSM minutes per month (with exception of "3" offer with 500
inclusive minutes.



Customers signing up to BT Fusion will get one free handset - available at
launch is the BT branded Motorola v560; secondary handsets at launch will also
be free of charge.

Customers will be eligible for a free BT hub (wireless base station)

Users will need to choose a mobile phone 'package' (exactly the same as when
choosing a standard contract mobile phone). Customers at launch will have the
following choice:

  • BT Fusion 100 : offering 100 cross-network, anytime inclusive minutes :
    launch pricing of £9.99 a month
  • BT Fusion 200 : offering 200 cross-network, anytime inclusive minutes :
    launch pricing of £14.99 a month

  • Secondary subscribers will be charged a monthly subscription of £9.99

  • Full pricing details for roll-out will be announced in September.

  • Calls to UK landlines originated in the home will be charged at BT
    landline rates of 5.5p for up to an hour at evening & weekends and 3p a
    minute daytime.

  • All other types of call made in the home are charged at normal mobile
    rates (same as calling rates of BT Mobile - for full details see BT Mobile
    Ts&Cs on www.bt.com).

  • All calls made outside the home will be charged at normal mobile rates
    (same as BT Mobile).

  • BT Fusion customers will also require Broadband from BT (from £17.99 a
    month online/with Direct Debit or add £1) and a BT Line (from £10.50 a month
    with Direct Debit or add £1).


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About BT

BT is one of the world's leading providers of communications solutions serving
customers in Europe, the Americas and Asia Pacific. 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 three lines of business:

  • BT Retail, providing a comprehensive range of communications and related
    services to more than 20m UK consumers and businesses.

  • BT Wholesale, providing network services and solutions within the UK to
    more than 600 fixed and mobile operators and service providers including the
    provision of broadband and private circuits.

  • BT Global Services, providing networked IT services to meet the needs of
    multi-site organisations globally. BT Global Services operates in more than
    130 countries and also offers international carrier services.

In the year ended 31 March 2005, BT Group's turnover was £18,623 million with
profit before goodwill amortisation, exceptional items and taxation of £2,085
million.

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

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






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