SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 6-K

                        Report of Foreign Private Issuer


                      Pursuant to Rule 13a-16 or 15d-16 of
                       the Securities Exchange Act of 1934



                                  18 May, 2004


                                  BT Group plc
                 (Translation of registrant's name into English)


           BT Centre
           81 Newgate Street
           London
           EC1A 7AJ
           England

           (Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.

               Form 20-F..X... Form 40-F.....

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.

                    Yes ..... No ..X..


If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ________



Enclosures:  1.  Product Launch announcement made on 18 May 2004

May 18, 2004


                          BT LINKS UP WITH VODAFONE UK

                               TO REMOVE FIXED AND

                            MOBILE BARRIERS FOR GOOD

                    BT steps up drive to create world's first
                     fully-converged communications service

BT today announced firm plans to change the face of  communications in the UK by
dismantling the barriers between fixed and mobile  services.  BT is to work with
Vodafone UK in its bid to offer fully-converged fixed-mobile services never seen
before in the UK, in the first relationship of its kind in the world.

BT Mobile's total connections for consumers and business are now running at over
20,000 a month.  The link-up with  Vodafone UK  reinforces  and builds upon BT's
presence in the business and consumer mobile markets,  by extending the benefits
currently  available to BT's mobility customers and taking them on to new levels
of service.

BT customers  will benefit from true  fixed-mobile  convergence by being able to
communicate and access the same  information  and services  however and wherever
they want. No longer will they have to carry  multiple  devices,  look up mobile
address  lists on  different  phones,  or use more than one  voicebank  or phone
number.  The same personalised  services will be available to them, whether they
are connected to a fixed network or on the move. BT's goal is to generate around
GBP1 billion of annual mobility and convergence revenues in five years.

Bill Morrow,  chief executive  officer of Vodafone UK, said: "This deal has huge
attractions for both  organisations.  As the mobile partner in BT's  convergence
strategy,  this enables  Vodafone UK to maximise its network and service  assets
while  generating  additional  revenue from a new source.  However,  Vodafone UK
remains fully  committed to a mobile  strategy and is happy to share the success
of mobile communications."

Pierre Danon,  chief executive  officer of BT Retail,  said: "BT and Vodafone UK
already  have a close  relationship,  through  BT's  provision  of  managed  and
wholesale  services.  Today's  announcement  takes that  relationship to another
dimension.

"This is an excellent  coming  together of two strong brands from the mobile and
fixed-line  worlds  with  complementary  strengths.  This  puts  us in an  ideal
position to work  together on  convergence  and offer  customers  the  appealing
package of trust and innovation. The fact that we are both global companies also
means good news for our corporate customers with a presence outside the UK.

"It is a  development  that  will  play a key  role in  helping  us build on our
success  to-date in  offering  mobile  services  to the  business  and  consumer
markets.  It is a first  relationship  of its kind,  going way beyond any normal
service  provision  deal,  as we will work  closely on a number of fronts,  with
Vodafone UK  providing  the network  services  for BT's  internal  and  external
requirements," added Danon.

BT today confirmed it is to launch Project Bluephone - the first step to handset
convergence  - before the end of the year.  It removes the need to own more than
one phone,  as  customers  will be able to use a single  device  that can switch
seamlessly between networks, giving more convenience, a better service with more
guaranteed coverage and lower overall costs.

It will bring the best of both worlds for both voice and data calls  through the
same devices, even at broadband speeds. Whenever customers are within reach of a
BT wireless  access point in their home or office,  they will be able to connect
at the best available  speed and quality,  through the BT network.  If they move
out of coverage range,  they will seamlessly link to our partner's  cellular GSM
or 3G network  for voice and data,  giving  them the best  available  connection
wherever they are.

Project  Bluephone has undergone  successful  trials with 50 users over the past
two months and the technology is proven. Now it is to be brought to market by BT
in close  collaboration  with Alcatel,  Ericsson and  Motorola.  A 'soft launch'
involving  more than 1,000 users is planned for this summer,  with a full launch
later this year.

Steve Andrews, BT Group chief of mobility and convergence, said: "There has been
a lot of talk about fixed and mobile  convergence  but, from later this year, it
will be here from BT. We have moved from future vision to reality.

"Project  Bluephone,  and the  developments  that will follow it, will be key in
helping  us  offer  the  world's  first  fully-converged  fixed-mobile  service,
bringing together the best of all technologies to give the customer the seamless
experience and powerful  services they want,  without having to bother with more
than one device, wherever they are.

"These developments will bring significant benefits to customers, including more
convenience,  greater personalised services and the potentially lower costs that
will result from more calls being carried over a fixed network."

Alan Mottram, president of Alcatel's Fixed Solutions activities,  said: "Alcatel
and BT enjoy a  long-standing  relationship  and we look  forward to  building a
joint solution for user-centric  services within this visionary  project." Johan
Bergendahl,  VP of Marketing at Ericsson, said: "All of Ericsson is excited that
we can bring our Mobile expertise to the Bluephone  project and help BT lead the
world in fixed mobile convergence."

Margaret Rice-Jones,  corporate vice-president and general manager of Motorola's
Infrastructure  business,  EMEA,  said: "We worked with BT to create BT Openzone
and look forward to continuing to deliver innovative solutions that will achieve
full network convergence."


                                    - Ends -

About BT

BT Group plc is the listed holding company for an integrated group of businesses
providing  voice,  data and video  services in the UK and  elsewhere  in Europe.
British  Telecommunications  plc, a wholly-owned  subsidiary of BT Group,  holds
virtually all businesses and assets of the BT group.

BT is one of Europe's  leading  providers of  telecommunications  services.  Its
principal    activities    include    local,    national    and    international
telecommunications  services,  higher-value  broadband and internet products and
services,  and IT solutions.  In the UK, BT serves over 20 million  business and
residential  customers  with more than 29  million  exchange  lines,  as well as
providing network services to other licensed operators.

BT consists principally of three lines of business:

     -    BT Retail,  serving businesses and residential customers and including
          BT Openworld, one of the UK's leading ISPs.

     -    BT Wholesale,  providing network services and solutions within the UK,
          including  ADSL,   conveyance,   transit,  bulk  delivery  of  private
          circuits, frame relay and ISDN connections.

     -    BT Global  Services,  BT's managed  services and  solutions  provider,
          serving multi-site  organisations worldwide. Its core target market is
          the  top  10,000  global   multi-site   organisations   with  European
          operations.

There are a number of other businesses within the BT group,  including BT Exact,
an   internationally   renowned  centre  of  excellence  in  IT  and  networking
technologies. It is also BT's technology and research and development business.

In the year ended March 31,  2003,  BT's  turnover was  GBP18,727m.  with profit
before goodwill amortisation, exceptional items and taxation of GBP1,829m.

For more information, visit www.bt.com

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

     Newsroom on 020 7356 5369. From outside the UK dial + 44 20 7356 5369.

All news releases can be accessed at our web site: http://www.bt.com/newscentre


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


BT Group PLC
(Registrant)


By: /s/ Patricia Day
--------------------
Patricia Day, Assistant Secretary. Head of Shareholder Services


Date  18 May, 2004