SBC Media Briefing Media Update May 9, 2001 Ross Ireland Senior Executive Vice President, Chief Technical Officer Abha Divine Vice President – Corporate Strategy

our strategy meeting our customers where they are

SBC’s Fiber Access Deployment  Direct fiber connections bring nearly unlimited bandwidth  PON and WDM make deployment efficient and cost effective  PON: Fiber to multiple customers without intermediary electronics  WDM: Signals as different colors of light on the same fiber

SBC’s Fiber Access Deployment  Direct fiber connections bring nearly unlimited bandwidth  PON and WDM make deployment efficient and cost effective  PON: Fiber to multiple customers without intermediary electronics  WDM: Signals as different colors of light on the same fiber

San Francisco Bay Competitor A’s Switch Competitor A’s Switch Location Competitor A’s Fiber SBC’s Central Offices SBC’s Wire Center Boundaries Silicon Valley Competitor A’s Fiber Network

San Francisco Bay Competitor A’s Switch Competitor B’s Switch Location Competitor B’s Fiber SBC’s Central Offices SBC’s Wire Center Boundaries Silicon Valley San Francisco Bay Competitor B’s Switch Competitor B’s Fiber Network

San Francisco Bay Competitor A’s Switch SBC’s Central Office SBC’s Loop Fiber SBC’s Inter-Office Fiber SBC’s Wire Center Boundaries Silicon Valley San Francisco Bay Competitor A’s Switch San Francisco Bay SBC’s Fiber Network

Fiber to the Neighborhood … Central Office or Remote Terminal Neighborhood Gateways Fiber Copper

… Then to the Home Central Office or Remote Terminal WDM allows multiple homes or businesses to be served by a single fiber connection Splitter is the size of a bubble gum pack Requires no remote power source Homes and businesses receive virtually unlimited bandwidth homes or 12 businesses Splitters

Access  SBC’s core data strength  High-speed access technologies form the foundation for all advanced services  Leased lines  ATM, frame relay, gigabit ethernet  Optical connections  DSL

DSL Deployment ,0 Central Offices 90 percent of total Pronto target

DSL Deployment ,0 Neighborhood Gateways 17,000 projected by 2003

DSL Deployment ,0 DSL Subscribers SBC is the nation’s largest DSL provider 5 9

Project Pronto: The Next Phase  Broadband platform for years  Enhanced scalability for DSL  Fiber for more businesses  Enhanced reliability  “Future-proof” architecture  Supports an array of advanced services

Project Pronto: The Next Phase  Broadband platform for years  Enhanced scalability for DSL  Fiber for more businesses  Enhanced reliability  “Future-proof” architecture  Supports an array of advanced services

SBC’s vision Be the only communications company our customers will ever need

SBC’s vision

Building Solutions ACCESS NETWORK

Network  SBC’s network is the backbone transport for all voice and data traffic  Switched  ATM  IP  Business networks allow workers to share information throughout an enterprise  LANs and WANs  Virtual private networks  Managed services ACCESS NETWORK

SBC IP Backbone Traffic by Product Mbps

SBC DSL customer base EOY 2000 SBC DSL customer base EOY 2000 “ Sweet Spot” IP Backbone Cost Curve $200 $450 $700 $950 $1,200 $1,450 $1,700 $1,950 $2, ,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0008,000 10,000 Number of DSL Subscribers (000) 5 Yr. WA Cost Per Mbps.

IP Backbone Buildout

Benefits of Our Approach  Efficiently handles IP traffic growth  Service level agreements (SLAs)  Differentiated products and time frame  Satisfies need for native transport

ACCESS NETWORK HOSTING Building Solutions

Hosting  Key to enabling customers to capitalize on our network and access  Ensures reliable, always-on Internet presence ACCESS NETWORK HOSTING

Hosting: Data Centers  $50 million facilities in Dallas, Irvine  Powered by Cisco equipment  Multiple DS3 Internet connections  Redundant power  Fire suppression and environmental controls  24-7 monitoring  Infrastructure services ACCESS NETWORK HOSTING

Hosting Services  Dedicated  Shared  Collocation  Internet data centers ACCESS NETWORK HOSTING

Hosting Market Growth Source: Forrester, Yankee Group, SBC region based on 41% of U.S. Managed CAGR 96% Hosted Apps CAGR 41% Collocation CAGR 51% Shared CAGR 23% ACCESS NETWORK HOSTING

ACCESS NETWORK HOSTING APPLICATIONS Building Solutions

ACCESS NETWORK HOSTING Applications  Advanced services that add functionality to Web sites and networks  A platform for ASP services  The fastest, most reliable path from customer to content APPLICATIONS

ACCESS NETWORK HOSTING Applications  Advanced services that add functionality to Web sites and networks  A platform for ASP services  The fastest, most reliable path from customer to content APPLICATIONS

Fiber or DSL broadband connection Home or business SBC Data/IP Network Hosted Content at SBC IDC Internet Content “Best effort” architecture of Internet: speeds can vary End-to-end access through SBC’s network Faster, more reliable bandwidth Corporate Network or e-business Network Broadband Solutions: The Ideal Platform

SBC Content Navigator SBC Broadband

SBC Content Navigator SBC Broadband

SBC Service Navigator SBC Broadband

Applications  SBC is introducing applications through its subsidiary, Sterling Commerce, one of the world’s leading e-business application providers  Sterlingcommerce.net  Sterling eTransaction Manager ACCESS NETWORK HOSTING APPLICATIONS

Applications  SBC is introducing applications through subsidiary Sterling Commerce, one of the world’s leading e-business application providers  Sterlingcommerce.net  Sterling eTransaction Manager ACCESS NETWORK HOSTING APPLICATIONS

Ecommerce Endgame: From Convoluted …

… To Convenient and Cost-Effective

ACCESS NETWORK HOSTING APPLICATIONS CONSULTING INTEGRATION MANAGEMENT Building Solutions

Consulting, Integration and Management  These offerings help businesses identify the options that best suit their needs, and making sure that all services work together to maximize benefit and performance  Management consulting  Process integration  Network integration ACCESS NETWORK HOSTING APPLICATIONS CONSULTING INTEGRATION MANAGEMENT

ACCESS NETWORK HOSTING APPLICATIONS SOLUTIONS CONSULTING INTEGRATION MANAGEMENT Building Solutions

ACCESS NETWORK HOSTING APPLICATIONS CONSULTING INTEGRATION MANAGEMENT The End Result solutions Products and services combined and customized to meet specific needs of businesses or industries SOLUTIONS

Customer Solutions HIPAA  Daunting challenge for health care and insurance companies  SBC solution combines consulting and integration expertise with networking applications ACCESS NETWORK HOSTING APPLICATIONS SOLUTIONS CONSULTING INTEGRATION MANAGEMENT

Customer Solutions HIPAA  Daunting challenge for health care and insurance companies  SBC solution combines consulting and integration expertise with networking applications ANX  Automotive suppliers need high-speed access to Big three e-commerce network  SBC solution combines high-speed access with e-commerce application and integration ACCESS NETWORK HOSTING APPLICATIONS SOLUTIONS CONSULTING INTEGRATION MANAGEMENT