BT to Restructure, Spin Off Business and Expand

LONDON (04/13/2000) - British Telecommunications PLC (BT) today announced its intention to restructure the company, expand further in Europe and create four new high-growth businesses in the Internet and telecommunications sectors.

In an effort to "position BT ahead of the next wave in communications", the company has created four new high-growth businesses called Ignite, Btopenworld, BT Wireless and Yell, BT said in a statement. Yell, formerly known as Yellow Pages, will be listed separately this year. It is likely that the other three business will be spun off as well.

"We are not ruling that out," said BT spokesman Simon Craven today when asked if BT will spin off all four businesses. "We will be considering it, but we will only do what is best for the shareholders in the long term."

Newly-created Ignite is a broadband IP (Internet Protocol) business focused on corporate and wholesale markets, BT said. Btopenworld is another broadband business, focusing on the mass Internet mobile and multimedia market. BT Wireless is a mobile business including BTCellnet and BT's portfolio of mobile assets worldwide.

In addition, BT announced its intention to separate its U.K. fixed network business into wholesale and retail divisions, meaning BT will free up the network business to develop products which will meet the needs of other service providers, Craven said.

The Office of Telecommunications (Oftel), the industry regulator, today issued a welcoming statement in response to BT's announcement, saying "BT's proposals are a significant step to create a structure where there will be greater transparency." Oftel sets the rules under which BT must offer wholesale versions of its retail services to its competitors.

BT is investing 4 billion pounds (US$6.35 billion) in the Ignite broadband IP business, designated to expand the company further in Europe. Ignite already has offices in nine European countries, according to Craven, but will expand further, either through organic growth or by merging with other companies.

BT, in London, can be reached at +44-207 356 5000 or on the Web at http://www.bt.com/. Oftel, also in London, can be reached at +44-20 7634 8700 or on the Web at http://www.oftel.gov.uk/.

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