Welcome to the BT Wholesale Fibre Product Surgeries

Agenda Facilitator - Carole Haywood-Poole Fibre Overview - Lee Martin FTTC Product Update – Neil Tye FTTP Product Update - Natalie Walker Openreach Marketing – Lee Martin (Jackie Hasted)

Legal and Confidentiality Statement The information contained in this Presentation is confidential information as per your terms and conditions with British Telecommunications plc (BT). Please treat it accordingly and do not forward, republish or permit unauthorized access. The information contained in this Presentation represents BT Wholesale’s current thinking for the intended WBC FTTP product at the time this Presentation was developed and may be subject to change. In relation to the WBC FTTP product referred to in this Presentation which are currently under development and/or trial, BT gives no undertaking or other commitment that it will be made commercially available in the same form. Any price indications and time scales contained within this Presentation are estimates for discussion purposes only and do not constitute any contractual or other obligation. All prices/charges are shown exclusive of value added tax and any other applicable duties and taxes which will be added to invoices. BT reserves the right to make changes to the information in this Presentation at any time without further notice. Any developments carried out by CPs based on the contents of this Presentation are entirely at the CP’s own risk. Note “BT” and “BT Wholesale” are trademarks of British Telecommunications plc. © British Telecommunications plc, All rights reserved. British Telecommunications plc Registered Office: 81 Newgate Street London EC1A 7AJ Registered in England no

Industry Engagement Plan Previously, We’ve held FTTP (and before that FTTC) weekly trial calls We’ve had 121 engagement with ‘early adopter’ customers We’ve shared the development roadmap via the ISP forum The product collateral has been stored across Inspire & BTW.com as well as having separate availability & coverage data sites It’s now time to: Conduct discreet trials with our supplier (where appropriate) to minimise the impact of your trial participation To share fibre plans & developments at an industry level via these surgeries & the newsletter Continue to support the ISP forum To rationalise the product collateral onto a single BTW.com site & share the Openreach activity with you first hand

Product Surgeries When & who: We’ll hold them monthly (4 th Thursday of every month) Every customer who has in interest in Fibre will be welcome to attend What: Monthly insight into the marketplace & BT’s strategy & plans Hour long, interactive with plenty of time assigned for Q&A What its not: A replacement for the ISP forum Really a place to cover systems & process issues A one way cascade of information

WBC Fibre - Fibre Overview Lee Martin

~19,000 cabinets ready for service at ~790 exchanges 2/3 premises passed by end /3 premises passed by end m premises passed by May m premises passed by May m premises passed by summer m premises passed by summer m premises passed by end m premises passed by end 2012 ADSL enabled for 99% of all premises Nearly 7 million+ ‘premises’ passed with 400,000 EU’s taking Superfast broadband (6% conversion) Superfast broadband Constantly evolving our plans both commercially and technically to meet the needs of the market and responding to UK Government 60+ external service providers are trialling or selling BT’s fibre services Announcement of plans to double FTTC speeds to 80/20 & introduce 300+Mb on FTTP in 2012 FTTC & FTTP coverage % changing, less reliance on FTTP to deliver the faster speeds

 Today, more than 99% of UK homes have access to broadband, of up to 20Mbps  Public funding would get SFBB to 90% of UK homes and businesses by 2018  £830m has been pledged by the UK Government;  Potential for further local authority, regional government and EU funding  Changes to the access network frequency band-plan will allow us to deliver up to 80Mbps on FTTC  We are testing vectoring technology which has the potential to offer over 100Mbps to over 50% of UK premises Superfast broadband Will transform the UK bandwidth landscape Before SFBB Commercial SFBB + BDUK funding + Band-plan changes + Vectoring + Further investment Broadband SFFB 20Mbps 90%

Superfast BB for our wholesale customers  Any WBC or WBMC customer can take the superfast broadband, it uses the same backhaul bandwidth as WBC (ADSL2+) – 200kbit/s per EU can be assumed (based on industry average)  Coverage, 1 in 10 of BTW CPs EU’s in served by an enabled cabinet or DP currently, demand is greater than supply  Assessing availability, understanding & applying the coverage data:  datasets on BTw.com, interactive map on Openreach site  weekly cabinet information published on BTw.com & postcode/cabinet translator  bulk check is available – special offer in January  geographical concentrations are appearing  Proposition development  at least a dozen different ‘service offering’ permutations available  we’ll not encroach in your ‘value’ space  higher converters are typically business ISP’s

 We now have more than 60 external CPs taking the service with an end user base of over 6,500, some are in test, some have many 100s of lines  Our records indicate that there are over 50,000 (external) EU’s that are within the existing fibre footprint, with that number set to double over the next 12 months, as BDUK funding becomes available that number could again be increased  The average conversion has risen from 7% in October to 9% in January, our group aspiration is to achieve a 20-30% conversion over the next few years, many of our CPs are converting at a rate of 15% or higher already  Consumer conversion is as healthy as business conversion  FTTP conversion is double the average FTTC conversion  We’re seeing double digit month on month growth across the base as marketing campaigns are now starting to reap dividends  Impact on backhaul networks is still real but starting to stabilise at ~200Kbit/s per EU FTTC conversion synopsis

We’d like to do a quick poll to gather your feedback & then take Q&A

WBC Fibre – Introduction to FTTP Natalie Walker

 FTTP was introduced in November last year (EMD) with commercial launch expected in Spring/Summer 2012  Available as part of the WBC portfolio to all WBC & WBMC customers  We have nearly 5,000 FTTP lines already  45,000+ premises already within footprint at 11 exchanges so far Fibre to the Premises (FTTP)  Primarily designed to be used as an infill for FTTC, greenfield & as an alternative to FTTC  Designed to match the FTTC speeds (& price) & also offer an optional higher headline speed  Multiple CPs per fibre line All WBC CPs can now place FTTP orders Remember the connection offer! Advantages include:  GPON, so no electronics  Inherently reliable  Hub & spoke architecture pre-built (at Openreach expense) up to the DP the serves the premise  Future proof, expecting ongoing development and speeds

WBC FTTP topology & architecture

Speed uplift to include 80M and 330M FTTP Development plans for Spring – Summer 2012 MOU/MDU solutions FTTP overlay and New Sites BDUK funding & regional opportunities Real Time QoS

Coverage New products Launch considerations Take up Yes, it is concentrated, and likely to be less than 25%. But:  FTTP extends existing FTTC products  Large pockets of FTTP only due to new developments, FOX, regional funding, the Cornwall solution has 40% FTTP coverage BT Wholesale CP’s have been very successful converting customers to fibre, and evidence so far suggests they are even better with FTTP! Concern with 100M headline rate if changes are likely, but: Openreach would only withdraw in consultation with industry At least a year away Avoid forced migrations unless equivalent product exist Commercials Typically Bandwidth Charges are an area for concern, but: FTTP bandwidth integrated with WBC, so impact is very small by comparison to copper usage

We’d like to do a quick poll to gather your feedback & then take Q&A

WBC Fibre – update on FTTC Neil Tye

80Mb FTTC & 330Mb FTTP products being launched Fibre Market Virgin – very much in the press, very public ‘speed war’ materialising Sky - When will they enter the fibre market & what will that do to the RRP 02, Talk Talk etc. – what are their plans for fibre, they’ll not want their market eroded Increased customer awareness of fibre ‘Window of opportunity’ challenge for the BTW external customers to stake a claim Increasing Openreach fibre roll-out & concentrations

FTTC 80/20 Trial Update Technical trial nearly complete (28th Jan)  160 orders successfully completed since 9th Jan  All systems performed as expected  Average speeds 65Mbits – with top speeds at 79.9Mbits! Full customer trial due to start soon! (6th Feb)  No limit on number of trial lines  No geographical restriction – it will be national!  Free line rental during customer trial! Launch/Pricing  Awaiting confirmed launch date from Openreach  Will be released 28 days prior to launch

Data consumption drivers Average household data consumption has grown 7 fold in the last 5 years; Ofcom forecast it will grow by a factor of 33 over the next 10 years BBC iPlayer requires Mbps for SD; > 3Mbps for HD. Broadcast HD TV currently requires 8-11Mbps; Broadcast 3D TV requires 13-17Mbps Global internet video is now 40% of Consumer internet traffic and will reach 62% by Cisco, VNI report, 06/11 By 2015, the average family might require 40-55Mbps ; young single adults between 20-35Mbps ~ 50Mbps will give a consumer 3 HD broadcast TV channels being viewed live, 2HD channels being recorded during peak period Concurrency is the killer application – Smart-Phones, Smart-Pads, PC’s, gaming devices, IPTVs all connected to the home network at the same time In this multi-user, multi-device environment, increasingly video rich usage of broadband with HDTV, HD VOD and HD gaming is driving demand for greater speeds and bandwidth. Cloud computing and storage is adding to this demand Interactive Online Gaming High Definition TV Video Conferencing Accessing Content Streamed Online Super-Fast Broadband Connection

We’ll now take Q&A

Openreach Superfast Fibre Marketing Creating awareness to stimulate demand

CP neutral local awareness marketing campaigns  Reminder: Why is Openreach doing this? – We can help drive awareness and take up by utilising two channels unique to us – our street assets and our relationship with local councils  Objective: Raise awareness, generate curiosity about superfast fibre, stimulate the general public to find out more (via  Activities – Branding of Openreach assets - Cabinet stickers and Superfast branded vans, guard rail posters – Joint Openreach/Council branded flyers for distribution by engineers and via council run buildings (leisure centre, libraries, offices) – Joint local PR activity, competitions, collateral, social media, web banners and promotion via council publications  Call to action – visit to find out more and where you can buy from (site includes a list of launched CPs – make sure you are on there)  Expected Results – During 2011, campaign activity in Cardiff, Cheshire and Bristol has driven, on average, a 5% uplift in weekly order numbers in the exchange areas covered

CP neutral local awareness marketing campaign locations: Jan-April 2012 NB exact timings to be confirmed via TWG as agreements with local councils firmed up City / AreaExchangesLive?Forecast Date Milton Keynes Bradwell AbbeyYes Milton KeynesYes Newport Pagnell,Yes Shenley Church EndYes WolvertonYes Bridgend AberkenfigYes BridgendYes Kenfig HillYes PencoedYes PorthcawlYes Pontycymnmer Mar-12 West Sussex HorshamYes Southwater Mar-12 Haywards HeathYes Lindfield Feb-12 Burgess Hill Mar-12 Phase 2 (Q1) Selsey Jun-12 Pagham, Jun-12 Bognor Regis Jun-12 Middleton on Sea Jun-12 Littlehampton Jun-12 Rustington Jun-12 Worthing (3 exchanges) Jun-12 Lancing Jun-12 Shoreham Jun-12 Southwick Jun-12 Stamford Yes Tendring Manningtree Mar-12 Clacton-On-Sea Mar-12 Frinton-On-Sea Mar-12 Grtr Manchester Ardwick Dec-12 ChorletonYes AltrinchamYes RingwayYes SaleYes Trafford Jun-12 UrmstonYes DidsburyYes Manchester centralYes Manchester EastYes Mercury (March 12) Mar-12 MossideYes RusholmeYes Cheshire Phase 1 - CongletonYes Phase 2 - Alsager (Mar 12) Mar-12 Holmes ChapelYes Middlewhich,Yes Sandbach (Mar 12)Yes Chester North Mar-12 Chester CentralYes Chester SouthYes Bath Bath KingsmeadYes RadstockYes Midsomer NortonYes Evesham Yes Exeter Yes Nottingham Arkwright Dec-12 BasfordYes SherwoodYes Trentside (Radcliffe)Yes Nottingham ArcherYes Derby MickleoverYes ChellastonYes Derby Mar-12 PeartreeYes Willowcroft Mar-12 York Dringhouses Mar-12 HaxbyYes Melrosegate Mar-12 YorkYes Definitely going ahead during Q4 ( Jan to March ) Ongoing dialogue with councils - could slip into Q1 (April to June)

has seen an increasing trend in visits during 2011, and w/c 8 January saw a record breaking number of connections Interest is growing is going to be the year of superfast broadband – get involved now!

For more information on Openreach CP neutral local awareness marketing campaigns contact: Jackie Hasted, Head of Portfolio Marketing, Openreach Tel:

We’d like to do a quick poll to gather your feedback & then take final Q&A Slides will be available on the fibre pages of btw.com