1. Beyond connectivity Sally Davis, President, Products and Services BT Global Services November 20, 2003

2. BT - embracing the future A profitable and cash generative company Financially sound, standing out from our peers Focused on organic growth Great European ICT success story World-class system of strategic partners Using a sustainable model to win

3. Our customers face challenges Consolidation & restructuring Connected world Globalisation More for less

4. Industry growth will clearly come from value-added services Worldwide IT/Communications Services and Product Enterprise Spend Source: IDC; Gartner; Forrester; ADVENTIS Analysis $ in Billions CAGR Total12% $2,312Bn $1,646Bn End-User Applications20% Application Infrastructure19% Communication Services24% Core Communication Elements5% Applications and Value Added Basic

5. BT’s answer – offer value, not just connectivity... Business Application Services Business IP Services Business Transformatio n Services Increasing Value People Software Hardware

6. … and create new value through a constant flow of innovation Solution Package Component Customised Industrialised Commoditised Drives innovation Captures value Carries fixed costs

7. This is what attracts our customers

8. Managing international networks is a complex business  Router management  LAN Management  Billing reports  Fax equipment  Telephony UPS and PABX battery back up  Dial up remote access service  PABX/ Telephony services/ associated systems and applications  Ancillary PABX systems; e.g. voicemail, call information logging equipment  PABX telephone handsets  Numbering plans  Mobile services (telephones & pagers)  Audio conferencing services  Calling cards  Video conferencing  All voice network and carrier connections  Freephone services  All data network and carrier connections

9. We can then add applications... Local branches Head office Estate agents BT Data centre CUSTOMER 220 building society branches 309 estate agency branches 42 surveyor officess 8,000 users SOLUTION Managed WAN Managed Lotus Notes Extranet access Disaster recovery Managed Wide Area Network Business partners

10. … which are what our customers care about most Critical Finance & E-Commerce site Servers, Security & Network High Availability Architecture First French total Microsoft.Net architecture Intranet & Internet Hosting for world-wide group

11. So connectivity is the foundation… Voice-oriented Centralised Closed interfaces Multi-media capable Distributed Open interfaces Narrowband 64kbit/s Circuit switching Multi-service IP Packet switching 2Mbit/s network Hands-on Mix of old and new 150Mbit/s network Direct fibre Optical networking Overlapping technologies Limited integration Aggressive DSL roll-out Transformation design Integrated access Network Intelligence Switching & Routing Core Transmission Access Network Service Oriented Architecture Services not products End to end not stovepiped User session based not product feature based Value not connectivity … on which services can be built

12. WAN LAN IT Infrastructure Web Services & Integration Apps Functional Applications Vertical Market Applications eHR /ERM Supply Chain Procurement CRM/ PRM Collaboration/ Office Finance Bespoke/ Legacy Enterprise Mgmt Tools Voice Related Applications Retailers Financial ServicesGovernment We believe that a network-centred approach is best for our customers SOFTWARE PARTNERS Microsoft Oracle PSO PARTNERS Accenture CSC HARDWARE PARTNERS emc2 HP

13. Questions?