British Telecom Signs Multi-License Agreement with Network Instruments.

Business Editors & Technology Writers

MINNEAPOLIS--(BUSINESS WIRE)--Aug. 29, 2001

Observer(R), Link Analyst(TM) To Provide

Network Analysis for Telecom Clients

Network Instruments, LLC, a market leader in high-value, high-performance protocol analyzers and device mapping software, has announced that British Telecommunications plc (BT) has licensed its Observer(R) Suite with additional Probes and Link Analyst(TM) to provide its clients with LAN and network health checks.

The original agreement includes 30 licenses for Network Instruments' network analysis and mapping software. BT provides an array of telecommunications services throughout the world. The first product application includes an enhanced customer service program that helps BT clients accurately and objectively evaluate their networks and determine the viability of voice and data convergence.

"We chose the Observer Suite because of its high level of functionality at a relatively low price point," said Tony Sanders, manager of LAN strategy, BT. "As we've rolled out its use in the field, we've discovered it offers even more functionality--such as voice data analysis--than we originally realized." Sanders adds that BT has just initiated its field use of Link Analyst.

"Our contract with BT represents a beginning of an important business partnership," said Douglas Smith, President, Network Instruments. "More important than their endorsement of our products is the positive feedback they are receiving from their customers. It poises both of us for more opportunity beyond this initial agreement."

Observer Suite is a software-based tool that analyzes any network problem from the network administrator's PC and offers both real-time monitoring and troubleshooting, as well as a complete trending and baselining collection system to view historical data. Link Analyst provides graphical mapping of network devices, uptime monitoring of device response times, a trigger-based active notification system to warn of network problems as they happen, and web reporting.

About Network Instruments

Network Instruments is the developer of Observer(R), Expert Observer(R) and Observer Suite(R), a line of protocol analyzation products that offer the ability to detect network abnormalities and report device or route failures. Network Instruments also develops and sells Link Analyst(TM) device mapping software. Network Instruments is a privately held company based in Minneapolis, Minnesota, with a European sales office in the UK and distributors in over 45 countries worldwide. Information on the company and its products can be obtained by calling [phone] or by visiting the company's web site at www.networkinstruments.com.

About British Telecommunications plc

British Telecommunications plc is one of Europe's leading providers of communications services, including: exchange lines and private circuits, and fixed local, national and international voice and data calls to homes and businesses in the United Kingdom (UK); wireless voice and data communications services and equipment for businesses and individuals in the UK and internationally; international new-wave products and services, including interned, multimedia data transport and solutions; and interconnection services for other UK operators.

In the 12 months to 31 March 2001 (the 2001 financial year), nine per cent of BT's group revenues derived from activities outside the UK, compared with around five per cent in the previous financial year. This excludes BT's proportionate share of the revenues of our joint ventures and associates. Total turnover for 2001 was 29,666 million Pounds Sterling compared to 21,903 million Pounds Sterling in 2000.

During the 2001 financial year, BT began a radical restructuring of its group. As a result, some BT activities have been grouped by market sector, rather than geography, to form three businesses with potential for high growth; BT Wireless - an international mobile business, with particular strengths in mobile voice, data and next generation services; BT Ignite - an international, data-centric solutions and broadband IP business focused on European corporate and wholesale markets; and, BTopenworld - mass-market internet business focused increasingly on broadband services.

In October 2000, management of the UK communications services businesses was split as follows: BT Retail - the UK's leading communications business and the prime UK channel to market for BT's other businesses; and, BT Wholesale - the provider of network services and solutions to communications companies, network operators and service providers, including BT Retail, BT Wireless and BT Ignite.

These five businesses operate alongside Concert, the BT global joint venture with AT&T, launched in January 2000 which is a leading communications provider for multinational business customers, international carriers and ISP's worldwide.

In November 2000, BT announced details of a restructuring plan which was drawn up following the identification of potential benefits which should follow from a separation of the group into a number of operating units which defined management accountability.

The plan was to optimize the positioning of BT's individual businesses within their respective markets. BT intends to demerge BT Wireless, which BT expects will include all of BT's wireless assets in the UK (BT Cellnet), the Isle of Man (Manx Telecom), Germany (Viag Interkom), the Republic of Ireland (Esat Digifone), and The Netherlands (Telfort). BT Wireless will also include Genie, one of Europe's leading mobile internet portals.

BT continues with plans to create a new holding company to give us corporate flexibility and to facilitate other potential acquisitions, demergers, disposals or IPO's.