New service announcement

BT Group PLC
06 August 2002

August 6, 2002

                         BT OUTLINES REVOLUTIONARY NEW

                              DIRECTORIES SERVICE

BT today unveiled its strategy to transform its directories operation following
Oftel's decision to deregulate the 192 service and the recent acquisition of
Scoot's business.

BT Directories will see the expansion of the basic directory enquiries service
into an integrated multi-media information service.

For the first time customers will be able to access both directory enquiries and
classified listings, as well as retrieve information as diverse as weather
forecasts, sports results and cinema listings via a single telephone number: 118
500.

As a result of deregulation the whole marketplace is changing with all operators
moving from a fixed price charging system to a time-based system. BT expects the
typical directory enquiries call will cost no more than it does today.

There are three elements to the strategy:

  • A comprehensive directory enquiry service with all calls being answered by
    an agent who will be able to offer onward connection - including, for the
    first time, direct connection to people's mobile phones.
  • Re-entry into the classified listings market following the acquisition of
    Scoot. This gives BT access to sophisticated search engines and databases
    covering most businesses in the UK, and will enable the introduction of new
    classified pages.
  • Enhanced information services which will enable callers to access a range
    of information such as travel and directions, weather forecasts, sports
    results, entertainment listings and share prices. Calls will cost
    considerably less than many current premium rate services. In due course
    this could be extended to 'fulfilment services' such as ticket bookings and
    share dealing.



The strategy for the new service also includes a possible future option for
customers to store personal information like telephone numbers, address books
and banking details with BT.

The raft of exciting new initiatives is expected to generate new wave revenue of
£100 million a year by 2004/5 - prior to any revenue lost as a result of the
deregulation of the directory enquiries market.

Pierre Danon, chief executive, BT Retail, said: "Today's announcement proves
BT's commitment to giving our customers the best service - providing instant and
easy access to a wealth of information via phone, internet or paper directories.

"As already announced to the City we expect BT Directories to generate £100
million new top-line revenue by 2004/5."

How the service will work: The 'one stop' information service will be available
via the telephone and internet. It is planned to run from the end of the year,
in line with Oftel's timing for deregulation. Customers will be able to continue
using the old 192 service in tandem with the new number until August 2003.

Pierre Danon added: "Oftel's decision to deregulate the market has given us the
opportunity to build on the strength of BT's brand and expertise and become a
leading information service provider.

We are confident that BT Directories will offer customers an unbeatable service
experience and place BT at the heart of this new marketplace."

ENDS

NOTES:

Deregulation of the market - In line with developments across Europe, Oftel
decided in 2001 to open up the UK directory enquiries market. Research on the
results of deregulation in other countries reveals that companies need to offer
a broad range of services in order to be competitive. BT is the fourth largest
directory enquiries provider in the world and is capitalising on this expertise
and existing large network of call centres to expand into profitable information
services.

Customers will be able to continue using the old 192 service in tandem with the
new number until August 2003.

For further information:

Jon Carter, Press Officer, BT Retail:                tel: [phone]

Mike Jarvis, Press Officer, BT Retail:               tel: [phone]

Rachel Jones, Fishburn Hedges                        tel: [phone]

BT Retail is one of the businesses that make up the BT Group. Others include BT
Ignite, BT Wholesale, BTopenworld and BTexact Technologies. It is the UK's
leading communications service provider and the prime channel to market for the
other businesses in the Group. It has 21 million residential and business
customers, a turnover of £12.1bn (in the last full financial year) and around
50,000 employees




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