Disposal

British Telecommunications PLC
2 May 2001



                                  May 2, 2001

               BT TO RAISE £4.8 BILLION (£4.4 bn net) FROM SALE

                         OFASSETS IN JAPAN AND SPAIN



BT today announced that it has agreed to sell its interests in Japan Telecom,
J-Phone, and Airtel SA to Vodafone for £4.8 billion in cash.

The sale comprises BT's 20 per cent stake in Japan Telecom, its 20 per cent
stake in J-Phone Communications Co. Ltd. and shares to be converted from a
recently announced call option, which represents 4.9 per cent direct stakes in
each of the J-Phone regional operating companies, as well as BT's 17.8 per
cent stake in Airtel.

This transaction values the Japanese investments at £3.7 billion and the
investment in Airtel at £1.1 billion. As part of this deal, BT will exercise
its option in the J-Phone regional operating companies for a total of £380
million.

The overall impact of the combined transaction will be a net reduction in
total BT group debt of £4.4 billion. In addition, Vodafone will take on £782
million of BT debt guarantees in favour of Japan Telecom.     Sir Peter
Bonfield, CEO of BT said:

'Our business activities in Japan have developed strongly and we have built a
successful and profitable relationship with Japan Telecom and J-Phone.

These are excellent companies, which we believe have a very good future.
However, when Vodafone approached us with this offer we felt that it
represented such good value for our shareholders that it was right for us to
accept it.

At the same time we had also been considering the most appropriate way for us
to exit from Airtel, including the possibility of an IPO. The Vodafone offer
gave us the opportunity to do so at an attractive valuation and with greater
certainty than would have been possible with an IPO in current market
conditions.

This deal therefore represents an excellent opportunity for us to realise
considerable value from our investments and allows us to continue to pursue
our stated aim of debt reduction. Indeed, today's announcement means a return
of more than three times our original investment in Japan for our shareholders
and five times in Spain.

Our de-leveraging strategy is firmly on track, delivering a substantial part
of our debt reduction target for this year in one combined transaction. It
demonstrates that we are committed to managing our business for value.'

Closing is conditional upon relevant regulatory and procedural approvals in
Europe and Japan. Prior to closing, BT will provide Vodafone with proxies to
vote BT's interests in Japan Telecom at the forthcoming Japan Telecom AGM. BT
was advised by Merrill Lynch International in respect of this transaction and
by Rothschild in respect of Airtel.

Notes for Editors:

JAPAN

Japan Telecom is one of Japan's leading telecommunications companies and
parent of J-Phone Communications Co. Ltd. which in turn has controlling
interests in the three regional J-Phone wireless operating companies, together
offering nation-wide mobile telecommunications services to over 10 million
subscribers in Japan.

In April 1999, BT formed a joint venture with AT&T to acquire a 30 per cent
stake in Japan Telecom, with BT owning 20 per cent and AT&T owning 10 per
cent. Subsequently, in May 2000, BT, along with Japan Telecom and Vodafone,
formed J-Phone Communications Co. Ltd. in which BT has a 20 per cent direct
stake. J-Phone Communications Co. Ltd. owns 51 per cent of each of the J-Phone
regional operating companies. On the March 29, 2001, in a re-arrangement of
existing ownership agreements, BT was granted an option to buy an additional
4.9 per cent in each of the three J-Phone regional operating companies for a
total exercise price of (Yen 68.4 billion).

The ownership structure of the Japan Telecom group has continued to evolve,
with the most recent development being the completion of AT&T's sale of its 10
per cent interest in Japan Telecom to Vodafone on April 27. For the six months
ending September 30, 2000, BT's share of the profits attributable to its
Japanese investments was £22 million after interest, tax and minority
interests.

SPAIN

Airtel is the second largest mobile operator in Spain with in excess of 7
million subscribers. BT was a founding shareholder of Airtel in 1995, and
since that time has invested £223 million in founding equity and subsequent
capital contributions. Vodafone agreed to acquire a controlling interest in
Airtel in July 2000. As at December 31, 2000, BT's stake in Airtel was carried
at £218 million in BT's balance sheet and, for the nine months ended December
31, 2000, BT's share of the profits attributable to its investment in Airtel
was £ £14 million after interest, tax and minority interests.



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