Mobile Media Development Agreement with Panasonic

British Telecommunications PLC
23 February 2000

                            
        BT AND PANASONIC TO DEVELOP MOBILE MEDIA
                            
           DISTRIBUTION SERVICES AND PRODUCTS

BT and Panasonic (Matsushita Electric Industrial Co.
Ltd., and Matsushita Communications Industrial Co. Ltd.)
today announced plans jointly to develop mobile media
distribution services and products for customers around
the world.

     The agreement forms part of BT's global mobile
Internet strategy to deliver information, entertainment
and commerce to mobile users and is a key element of
Panasonic's mobile multimedia business development on GSM
and UMTS mobile communication networks. 

     Sohail Qadri, BT's director of mobility, said: 'This
agreement is a key part of BT's mobile Internet strategy
to meet customer needs for personalised communications,
information and e-commerce anywhere and at any time.
Panasonic's expertise in the mobile handset market and
its world class consumer audio and video business makes
it an ideal partner for us in this exciting and fast
moving market.

     'The delivery of these innovative products and
services will strengthen our position to exploit the
potential of GPRS and third generation mobile
technologies and offer our customers unrivalled
benefits.'

     Mr Eiichiroh Murata, director of the multimedia
communications development centre, Matsushita
Communication Industrial Co., said: 'This agreement
offers an unrivalled chance for Panasonic to create new
mobile services on GSM and third generation mobile
systems, in the mobile multimedia environment of the new
millennium. We are really excited to be collaborating
with BT on mobile multimedia as part of our plan to
develop third generation infrastructure, information
networks and terminals for mobile multimedia. This
follows our recent contribution to 'MID', a mobile
information service provider and 'airmedia', a joint
venture for mobile media distribution services in Japan.'

     The initiative brings together Panasonic's expertise
as a world leader in consumer electronics and mobile
telecommunications with BT's global network and
communications experience. This strong combination will
deliver exciting new mobile multimedia products and
services to BT's customers and its family of mobile
alliances around the world.  Users will have a choice of
information and entertainment services provided by a rich
variety of local and global content providers.

     One of the first services to be developed will
enable customers to request music of their choice using
their mobile phone and then download it to a personal
stereo.

     Customers can choose and listen to their favourite
music while out and about without having to carry a
library of discs. Audio clips, samples of the latest
releases and music news will be available instantly,
helping the user to decide whether they want to listen
and read more by downloading. For the first time,
customers will be able to see lyrics and pictures of the
performers while listening to the latest release - all on
a handy personal stereo.

     Trials to be held in the UK in the third quarter of
2000 will show how the mobile phone works with the new
personal stereo, using Panasonic's Secure Digital memory
card technology, which protects copyrighted music.

     Other developments will include lightweight, colour
screen palmtop devices to access a full range of
multimedia services. This new generation of handheld
mobile units will be equipped with e-mail, Internet
access, camera and personal organiser services using
technological advances made in the Japanese mobile
communications market.