1. Current thinking. Subject to change. Rory Murphy Head of Digital Media Propositions & Customer Engagement BT Wholesale March 2011 BENEFITS OF BUILDING AN IN-HOUSE CONTENT DISTRIBUTION NETWORK (CDN)

2. Current thinking. Subject to change. CONTENT SERVICES FROM BT WHOLESALE  BT owns & manages the largest communications network in the UK  Provides a wide range of digital media distribution services to the entertainment industry - for 50+ years  Media services incorporate BT Media & Broadcast, BT agilemedia & BT Wholesale Content Services  Introducing a new approach to content distribution & delivery - developing broadband as a TV platform  Content Connect (CC) - a CDN built to address exponential growth of broadband video traffic

3. Current thinking. Subject to change. BT WHOLESALE & ISP BROADBAND MARKET Broadband Subscriber NumbersQ4 2010 Total Broadband Subs19,620,484 BT Wholesale (DSL)7,979,755 LLU Lines7,489,629 Virgin Media (DOCSIS)4,011,100 Other (Kingston etc)140, 000  ~ 19.5 million UK broadband lines  BT Wholesale provides broadband: –to around 8m UK homes & businesses –to 600+ fixed & mobile operators & ISPs –BT investing £2.5bn in fibre & continuing to roll out advanced copper broadband –broadband services provided on an open wholesale basis (Source: Enders Analysis)

4. Current thinking. Subject to change. MARKET CONTEXT INTERNET VIDEO TRAFFIC CONTINUES TO RISE IN UK AND AROUND THE WORLD BBC iPlayer reported a record 101.3m online TV content requests in Jan 2011 Virgin Media BBC iPlayer TV requests were an additional 25m Ericsson believes IP video will grow to over 90% of network traffic in the next few years Cisco predicts global internet video will increase from 2.7 to 19.5 exabytes (1m larger than terabyte) by 2014 PROLIFERATION OF INTERNET ENABLED DEVICES DRIVING CSP/CDN STRATEGY Redshift research found 35% of UK viewers watch more TV on mobiles than 2 years ago Content Providers use multiple CDN partners for greater reach, burst and economic benefits The rise & range of connected devices offers Content Service Providers increasing options to reach their customers

5. Current thinking. Subject to change. Off-Net Edge-Net On-Net A MANAGED NETWORK DELIVERY

6. Current thinking. Subject to change. CONTENT DELIVERY IN A MANAGED NETWORK Off-net delivery service incurs the end to end costs  CDN  Core & Backhaul  Access Over-The-Top (OTT) delivery fragments the end to end costs  CSP incurs CDN costs  ISP incurs network costs On-net managed networks can balance between cost & quality  To deliver a consistent experience to the end user  To provide cost effective delivery

7. Current thinking. Subject to change. Content Connect 100% UK Coverage Basic ~8m BTW Users StandardPremium LLU Network Users Custom Basic: routes traffic via Internet and is comparable to standard ‘Over The Top’ Internet CDN delivery. Broadband access is not part of this service Standard: enables ISPs to present content to BT for caching within BT Wholesale’s broadband access network to participating ISPs’ end users Premium: provides advanced quality of service within the broadband access network to assure delivery to end users Custom: Extension and integration of CC into LLUO networks with agreement of third party operators BT WHOLESALE’S CONTENT CONNECT FAMILY Sold to CSPs only Sold to ISPs only Sold to LLUOs only

8. Current thinking. Subject to change. Content Connect 100% UK Coverage Basic ~8m BTW Users StandardPremium LLU Network Users Custom Basic: routes traffic via Internet and is comparable to standard ‘Over The Top’ Internet CDN delivery. Broadband access is not part of this service Standard: enables ISPs to present content to BT for caching within BT Wholesale’s broadband access network to participating ISPs’ end users Premium: provides advanced quality of service within the broadband access network to assure delivery to end users Custom: Extension and integration of CC into LLUO networks with agreement of third party operators BT WHOLESALE’S CONTENT CONNECT FAMILY Sold to CSPs only Sold to ISPs only Sold to LLUOs only CDN KEY FEATURESWCC BASICWCC STANDARDWCC PREMIUM Download/Streaming from Edge Caches to End Users Yes Delivery via Internet only Yes Delivery via ISP Network Yes Delivery Via ISP Network & QoS Origin Server Access Yes Geo blocking Yes (UK)Yes (in ISP Network) Content Storage Yes Usage Reporting & Billing Yes SLAs for Performance, Reliability & Resilience Yes

9. Current thinking. Subject to change. … TO ADDRESS NEEDS OF ISP & CSPs ALIKE - Achieving full UK broadband coverage for all CSPs Priority Delivery CC PREMIUM Quality of Service ISP Network Product CC STANDARD Superior delivery Core Internet CDN CC BASIC 100% UK Coverage Features & Capability Timeline  Offering network bandwidth & core CDN services via IP address management  Serving video content within ISP networks or via ‘Over-The-Top’ internet delivery route Basic: OTT Delivery Standard: ‘Through the network delivery’ Premium: QoS ‘Premium’ in addition to Standard

10. Current thinking. Subject to change. ISP Network 21CN CC Content Caches CC Premium Backhaul DSL CC Standard MSAN CC Basic & all other internet CDN traffic BR AS WCC Origin Server CSP Origin Server ISP Origin Server WWW (Internet) CC Basic traffic CONTENT CONNECT ARCHITECTURE

11. Current thinking. Subject to change. A DEDICATED SERVICE PORTAL FOR PARTNERS Developing a secure destination zone for Content Connect partners to manage their business Content management, cache deletion… Skytide insight for performance, reporting & analytics across all ISPs Ability for CSPs to view volume & actual content (url) delivered by ISPs Fault management & help features Service management & training Access to billing information Network status visibility All under one wholesale.com security & authentication wrap

12. Current thinking. Subject to change. BT WHOLESALE CONTENT CONNECT BROADBAND VIDEO DISTRIBUTION FOR UK PARTNERS  BT sees broadband as a video delivery platform & a viable complement to DTT, Cable or Satellite A NETWORK CDN  Deployed deep in BT’s network  A basic OTT option & plans to introduce a managed service variant for 3 rd party networks A QUALITY USER EXPERIENCE  CC Assured provides traffic prioritisation in the broadband access network delivering a predictable & consistent user experience TRANSFORMING THE COMMERCIAL MODEL  Establishing a new commercial model for content delivery which brings the ISP into the ecosystem & offers greater choice for CSPs INSIGHT AND OPERATIONAL SIMPLICITY  A single reporting portal for deeper audience & operational insight with industry leading reporting system from Skytide

13. Current thinking. Subject to change. THANK YOU

14. Exchanges BT Wholesale Broadband, data, voice Managed network services Homes/businesses THE UK WHOLESALE MARKET Copper Openreach Access products (LLU, WLR, GEA, Backhaul) Copper Fibre