News release

BT Extends Infrastructure and Services Agreement Contract Totaling $660 Million with HP

As part of the BT HP Alliance, BT has signed a $660 million contract amendment with HP to extend the transformation of its technology environment, reinforcing BT’s ability to meet customer needs today and into the future, while delivering significant cost reductions.

The contract extends the companies’ current agreement for the next 7.5 years, whereby HP will continue to provide, deploy and support BT’s servers and storage. Under the agreement, HP also will continue to deliver Service Desk and End User Services to a population in excess of 100,000 users across BT in the United Kingdom.

The deal signature demonstrates the ongoing commitment in the strategic relationship between the two companies via the BT HP Alliance, which has created more than $5.3 billion of new revenue for BT and HP since 2004. BT and HP are building the networked IT infrastructure that delivers new customer business models.

The BT HP Alliance is a working partnership between BT and HP. It transforms and simplifies customers’ networked IT services and provides better costs points, flexibility, service levels and time to market for BT’s customers.

“This contract renewal offers BT competitively priced services across a number of key areas of our IT infrastructure,” said David Butcher, managing director, Service Introduction, BT Operate. “HP is a key partner for BT and this deal will create the platform for accelerated innovation and delivery of services for our customers.”

“HP will support the management and transformation of the BT technology environment into an increasingly agile, cost-effective infrastructure designed to deliver what their business requires,” said Francesco Serafini, senior vice president and managing director – EMEA, HP.

About BT

BT is one of the world’s leading providers of communications solutions and services operating in 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services. BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale.

In the year ended 31 March 2008, BT Group’s revenue was £20,704 million with profit before taxation and specific items of £2,506 million.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York.

For more information, visit www.bt.com/aboutbt.

About HP

HP, the world’s largest technology company, provides printing and personal computing products and IT services, software and solutions that simplify the technology experience for consumers and businesses. HP completed its acquisition of EDS on Aug. 26, 2008. More information about HP (NYSE: HPQ) is available at http://www.hp.com.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the execution and performance of contracts by HP and its customers, suppliers and partners; the achievement of expected results; and other risks that are described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008 and HP’s other filings with the Securities and Exchange Commission, including but not limited to HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2007. HP assumes no obligation and does not intend to update these forward-looking statements.

© 2008 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.