BRITISH Telecom is set for a #300m windfall as a result of American

telecoms giant AT&T's decision to make a full bid for McCaw Cellular,

the US portable phones group in which BT holds 17%.

Last November, BT agreed to sell its holding for $49 a share to AT&T,

with the deal scheduled to be completed by the end of next month. Now

following talks, AT&T has decided to swallow the whole of McCaw and has

agreed share exchange terms which value McCaw shares at $62. So BT is to

receive a total of #1500m, against #1200m under the ealier arrangement.

However, the takeover of McCaw is expected to take a year to consummate

and BT will have to wait until then to get its AT&T shares, which will

then be sold.

BT chairman Iain Vallance commented: ''We believe this is a solution

that is good for McCaw's shareholders and should provide better value

for BT shareholders than the previous arrangement.''

The group acquired its McCaw stake four years ago and will now make a

profit of some #550m on it. The idea was to use McCaw to develop

operations in the US, but this was thwarted by US regulatory rules which

forbid foreigners owning more than 25% of a portable phone network. As a

major plank of its global ambitions, the move was an obvious failure

though BT maintans it learnt a lot about the US telecoms industry.

Now BT is having another go in America, having spent $4300m on a stake

in the US long-distance phone operator, MCI, with which it has formed a

joint $1000m venture, 75%-owned by BT, to handle international voice and

data communications for multinationals.