Co-operation Agreement

British Telecommunications PLC
12 June 2000

 BT AND VODAFONE SIGN CO-OPERATION AGREEMENT TO ACQUIRE
   ADDITIONAL SHAREHOLDINGS IN SPANISH MOBILE OPERATOR
                         AIRTEL

British Telecommunications plc (BT) and Vodafone AirTouch 
plc (Vodafone) today announced that they have signed a 
co-operation arrangement whereby they will work together to
acquire additional shareholdings in the Spanish mobile
operator Airtel Movil, SA (Airtel or 'the company').
     The agreement includes commercial terms whereby the
two parties will jointly expand and develop the company
in consultation with one another.
     BT agrees to support Vodafone in acquiring further
shares in Airtel and, should Vodafone's holding exceed  
55 per cent, then BT has the option to acquire the excess.  
In the event that Vodafone holds in excess of 55 per cent, the
board will be restructured to give Vodafone and BT equal
representation.
     This agreement follows the signing by Vodafone on
January 22, 2000 of arrangements whereby it granted to
Acciona, SA (Acciona), and affiliates of Torreal, SA
(Torreal) and Corporacion Financiera Alba, SA (Alba) a
series of conditional put options in respect of their
shareholdings representing, in aggregate, 16.91 per cent
of Airtel.
     Airtel is Spain's second largest mobile phone
operator and, at March 31, 2000, had more than 5.6
million customers.  The company has introduced fixed line
telephony and Internet offerings as part of its strategy
to use its wireless customer base to become a full
service telecommunications company.
          Airtel operates in the fast growing Spanish
telecommunications market. This agreement forms part of
BT's and Vodafone's strategies to increase their
positions in the European markets.
          Through this agreement, BT and Vodafone aim to
increase their presence in the Spanish market and jointly
take a greater role in the long-term development of
Airtel.
     BT and Vodafone have also signed a commercial
agreement outlining how BT's wholly-owned subsidiary, 
BT Tel, would increasingly work with Airtel to provide a
full range of services to BT Tel's customers in the
Spanish corporate market.  BT Tel is Spain's second
largest data communications and Internet company.
           The agreement also outlines how BT and
Vodafone will set up mobile Internet portals with Airtel.
     In the year ending December 1999, Airtel had
revenues of approximately ESP 333.4 billion, EBITDA of
approximately ESP 75.4 billion and profits after tax of
approximately ESP 24.6 billion.  The net asset value of
Airtel according local accounting standards as of
December 1999 was approximately ESP 119.2 billion.
     Commenting on the transaction, Sir Peter Bonfield,
chief executive of  BT, said: 'I am delighted that BT and
Vodafone have today reached an agreement on Airtel.
Airtel is a rapidly growing company and a major force in
the Spanish mobile market.  This agreement also
strengthens BT Tel's position in the Spanish fixed and
Internet markets.'
    Chris Gent, chief executive of Vodafone, said: 'Spain is
one of Europe's fastest growing mobile markets.  Today's
announcement that two of the world's leading
telecommunications companies have reached an agreement will
further strengthen Airtel's position in the market and
enhance the company's future growth prospects.'