BT acquires Counterpane

BT Group PLC
25 October 2006


October 25, 2006

                   BT Acquires Counterpane Internet Security

BT today announced that it has acquired Counterpane Internet Security Inc.
("Counterpane"), a leading provider of managed networked security services, as
part of its strategy to expand and develop its global professional services
capabilities.

Counterpane currently monitors 550 networks worldwide for multinational and
Fortune 100 customers. The company is based in Mountain View, California.
Post-acquisition, Bruce Schneier, the founder of the company, will continue in
his role as CTO and Paul Stich will remain its CEO.

Andy Green, CEO BT Global Services, said: "Counterpane is a welcome addition to
BT's global professional services community. As more and more of our customers
seek to exploit the opportunities of globalisation, we are finding that
increasingly business critical applications are dependent upon the resilience
and security of their infrastructure. "

Security threats get more sophisticated and a larger number of companies are
outsourcing the management of their security infrastructure to specialised
security service providers. Counterpane is a leader in this space. This
acquisition will allow BT to benefit from a unique set of security management
technologies and deliver to its global customers a more proactive managed
security service with enhanced auditing and reporting capabilities.

This acquisition is also another milestone in the execution of BT's growth
strategy that includes inorganic and organic phases. It demonstrates again BT's
commitment to extend its propositions and capabilities in areas that customers
have identified as key business issues, while further strengthening its US
capabilities.

Paul Stich, president and CEO, Counterpane, said: "This is an excellent
opportunity for Counterpane's customers and employees. It is great to see that
BT is listening to its customers and acquiring the skills and capabilities in
order to fully service their requirements. Together BT and Counterpane can
deliver the holistic approach needed to face today's security threats,
encompassing people, processes and technology."


  As at 31 December 2004 the audited gross assets of the business were $6.8m.


                                     -Ends-


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 plc
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


About Counterpane

Counterpane is The Managed Security Company. As the authority on enterprise
security, Counterpane's Managed Security Services ensure customers' business
continuity, improved compliance, and protection from financial loss. Monitoring
over 550 networks worldwide to gather, correlate and evaluate an unparalleled
volume of information, Couterpane gives its customers the industry's broadest
real-time view of, and response to, global IT security threats. Leveraging its
experienced professionals and state-of-the-art security solutions, Counterpane
delivers comprehensive protection and real economies of scale and efficiencies
of cost. For more information, visit www.counterpane.com.


                      This information is provided by RNS
            The company news service from the London Stock Exchange