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British Telecom PLC (BT.A)

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Thursday 04 October, 2001

British Telecom PLC

BT announces outsourcing

British Telecommunications PLC
4 October 2001

NR0163 October 4, 2001

                             DEPARTMENT TO XANSA

BT today announced its intention to transfer the department which provides
many of its key accounting and financial services to Xansa the business
consulting, information technology and outsourcing company. If an agreement is
reached, Xansa will manage these services and provide them to BT under a long
term service contract.

The proposal is in line with BT's stated strategy of maximising shareholder
value by focusing on its core telecommunications business. It would allow BT
to benefit from Xansa's considerable experience in the provision of
outsourcing services.

Philip Hampton, BT Group finance director, said: 'We believe this relationship
with Xansa would provide us with the opportunity to benefit from continuing
improvements and best-in-class processes and systems. It provides both
opportunities for cost savings for BT as well as excellent career prospects
for the people who transfer. This builds on our strategy of focusing on BT's
core business.'

More than 500 employees from BT's financial and accounting services department
would transfer to Xansa as part of the proposed arrangement. It is expected
that a definitive agreement between BT and Xansa would be finalised by year

Xansa Chairman Hilary Cropper said: 'We are delighted to announce this
proposed alliance which would represent a natural and complementary extension
to our 15 year relationship with BT. BT would be a foundation client of our
new Business Process Management business, the launch of which we announced
separately today. It will build on our existing capabilities and enhance
significantly our offering in the growing area of IT enabled business process
management. It will be a pleasure to welcome such highly skilled professionals
into Xansa.'


Notes to editors

BT's financial and accounting services department provides a range of
accounting and transaction processing services to the lines of business within
the BT Group.

Xansa is a company that transforms the business capability of its clients by
harnessing knowledge of selected industries and business processes with proven
skills in applying technology. The company has three key areas of expertise:
business consultancy, information technology and outsourcing, and operates in
the UK, North America, continental Europe, India and Asia Pacific. Xansa is
listed on the London Stock Exchange under the code XAN.

       Inquiries about this news release should be made to the BT Group

                Newsroom on its 24-hour number: 020 7356 5369.

                 From outside the UK, dial + 44 20 7356 5369.

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