Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 1 BT Wholesale Next Generation Broadband Tom Saville December Version 1

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 2 Forward looking statements – Caution advised Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities litigation Reform Act of These statements include, without limitation, those concerning: BT's plans for transformation of its networks; benefits to customers of the 21CN programme; key milestones and expected timetable for delivery of 21CN; and the benefits in relation to, for example interconnect, convergence and broadband. Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual outcomes may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences between actual outcomes and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic and financial markets conditions in the markets served by BT; supplier arrangements; future regulatory actions and conditions in BT’s operating areas; technological innovations; developments in the convergence of technologies and the anticipated benefits and advantages of new technologies, products and services, including broadband, not being realised.

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 3 Forward looking statements – Caution advised Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of These statements include, without limitation, those concerning: BT's plans for transformation of its networks; benefits to customers of the 21CN programme; key milestones and expected timetable for delivery of 21CN; and the benefits in relation to, for example interconnect, convergence and broadband. Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual outcomes may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences between actual outcomes and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic and financial markets conditions in the markets served by BT; supplier arrangements; future regulatory actions and conditions in BT’s operating areas; technological innovations; developments in the convergence of technologies and the anticipated benefits and advantages of new technologies, products and services, including broadband, not being realised.

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 4 Nov 05 IPstream Home Max & Office Max 256k-8Mbps Downstream Up to 832k Upstream 2 variants of weighting factor for Home Max and Office Max Datastream Max 256k-8Mb Downstream Up to 832k Upstream New High Speed Products Move from fixed rate to variable rate. Datastream, IPstream split ATM based Higher speeds will encourage bandwidth hungry applications.

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 5 Force the Battle for Speeds and Price… Fixed Rate DSL More Throughput for Less VALUE 24M for £9.99? 2M for £17.99

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 6 Bandwidth Landscape 0-65Mbps Downstream

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change Applications Market Drivers- Consumer Technology-access Market Applications 2MB fixed rate DSL BT MB DSL Max VDSL/ FTTC FTTH Access ADSL2+ Consumer Internet Voice IPTV HDTV Authenticatio n Remote Storage & Backup E- information: e-news, ringtones services VoD Teleworking Music Downloads VoBB, Mobile 3G Convergence Gaming Online Gaming Downloads Managed security & monitoring Video Telephony Training /Education Managed Billing Remote Home security Managed Home Networks Geek Squad Bandwidth on demand / PAYG Bandwidth on demand (QoS) Intelligent Billboards Personalised Media

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change Applications Market Drivers- SME Technology-access Market Applications Managed business networks 2MB fixed rate DSL BT Videoconferencing Business Quality VoIP (2 way QoS) High definition Videoconferencing 8MB DSL Max VDSL/ FTTC FTTH Access ADSL2+ Remote backup Managed storage Business Personalised media VoBB, Mobile 3G Convergence Authentication Security VoIP/ VoBB Managed monitoring services Training/ Education e-tagging/ tracking Managed business access Managed billing Intelligent Billboards IPVPN Business Quality VoIP (1 way QoS)

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 9 Future: The Battle for Applications More Throughput for Less Get the best experience from your broadband line e.g. Codec for HDTV compression. Conveyance/ QoS Next Generation Broadband on 21CN IPTV HDTV Converged VOBB/Mobile Wi-fi Gaming Virtual call centres Remote home security Pod Casting Video telephony Online gambling Internet Radio Parental Controls Interactive Gaming Employee training/comms Targeted Business news 2-way video for online gaming/ gambling True interactive TV VALUE

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 10 Voice enabling the Internet and interactivity is a huge opportunity. Imagine that you can click to talk in any web site You’ve searched for your local pizzeria? You simply hit the Famous Moe logo & Mr Moe is taking your order. No need to even dial a phone number. ‘I checked my online balance and there seems be a mistake’ Your Bank PLC will have customer service on line instantly ‘ Want to meet like minded people in a chat room but your spelling lets you down? Meet Me adds voice to the hottest new way to socialise Seen someone’s picture on the web and fancy a chat. Meet Me adds voice to premium rate content.

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 11 Mass consumer market network model CPE / IAD With Gateways functions Legacy POTS PWLAN Hotspots Web surfing Legacy POTS Broadcast Num TV VoIP VoD or second TV set DSL access to Multiple services DSLAM/MSAN ISP1 ISP2 Video WWW Customer CVLANS carried in Service Provider VLAN(S) BT 21CN Network Service Provider SVLAN(S) carried across core network and delivered as SVLANs to the SP Multimedia Gateway/Router/ Media Server

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 12 Content & Applications Services Consumers Added value network capability including VoIP, and media- enabled network Also includes wholesale OSS & BSS Application Services Platform BSS OSS Network backbone Content Services Layer On demand services E-Gov Learning Tourism News Sports etc Content CDN Digital enablement

Consult21 Information is subject to change and is for discussion purposes only. Any dates/timings are the current anticipated timescales and may be subject to change. 13 Questions?