3. 2005/6 | financial headlines (1) Underlying excluding cuts in mobile termination rates, Albacom and Infonet (2) Before specific items (3) Excluding receipts from disposals Group turnover£19.5bn6% / 3% (1) Profit before tax (2) £2.2bn5%Earnings per share (2) 19.5p8%Free cash flow£1.6bn8% (3) Full year dividend11.9p14%Net debt£7.5bn5%

4. Operational highlights of 2005/6 8million Broadband connections New wave revenues now one third of total business Investment in 21st century network Regulatory settlement – launch of Openreach Continued targeted acquisitions – Atlanet, Cara, Total Network Solutions

5. Boardchanges

6. Corporate Social Responsibility

7. Dividends Years ended 31 March Total pence 15 10 5 0 20022003200420062005 11.9 10.4 8.5 6.5 2.0

9. BT’s vision To be dedicated to helping customers thrive in a changing world

10. Consistent strategy Helping our customers thrive in a changing world 21 st Century Network Defend traditional Improved service Price innovation Reduce costs/improve margin Aggressive and creative marketing Grow new wave Networked IT services Broadband Mobility Consistent delivery

11. 5.0 4.0 3.0 2.0 1.0 0 (1.0) (2.0) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2003/4 2004/5 2002/3 2005/6 % Revenue | strong underlying* growth * 2002/3 growth is adjusted to take account of Concert unwind * 2004/05 and 2005/6 excludes impact of mobile termination and revenues from Albacom and Infonet

12. Consumers | a broadband centric service provider What is our strategy? Broadband-centred convergent services; a service culture What do consumers want? Simple, high quality services; clear pricing; value for money Examples of new services: High definition voice; BT Vision; BT Fusion; WiFi cordless phones; 8Mb broadband

13. Broadband Britain Coverage60%99.7% 20022006 BT Wholesale DSL Price£30.00£8.40 per monthTake-up200k8 millionSpeed512kbup to 8Mb BT Retail Services Internet access and email Home Monitoring Openzone BT Yahoo! Home Networking Broadband Talk IT Manager BT Fusion

14. BT VisionMusic Entertainment Broadband | our services Centred on the Home Hub Bringing it all together Communications BT Fusion High Definition Voice Home MonitoringDigital Vault Manage Life

15. Small and medium businesses | a partner for change What do businesses want? Personalised, localised service; reduced complexity; improved productivity What is our strategy? Being an IT partner; BT Local Business Examples of new services: Networked IT services; OneBill; BT Fusion for enterprise

16. Mobility | convergence is here 42% growth in revenue year on year to £292m Converged products and services Fusion, Onebill, Openzone Wireless cities Personal safety Remote working Wireless connectivity Car park monitoring

17. Wholesale customers | convergent network solutions What do Wholesale customers want? High quality service, reliable delivery; equality of service/price What is our strategy? Providing managed network solutions for fixed and mobile operators Examples of new services: 21CN based services; BT Movio

18. Corporates | growing around the world What do corporates want? Enterprise-wide solutions; a one-stop shop; reliability and security What is our strategy? Providing global reach with local presence; building long-term customer relationships Examples of new services: Converged wireless portfolio; sector specific propositions

19. Networked IT services | enhancing our capabilities Reach Infonet, Albacom, KDDI joint venture WAN & LANs Cara, Skynet & TNS Retail NSB, BT Expedite & dabs.com Motor industry Atlanet Bringing it all together Financial Services Radianz

20. 6 5 4 3 2 1 2003/42004/52002/32005/6 £Bn 7 CAGR 0 + 49% Revenue | new wave growth accelerating + 83% Mobility & OtherBroadbandNetworked IT Services + 24%

21. Basic earnings per share* Years ended 31 March Pence * From continuing activities 20 10 5 0 2002 15 2003200420062005 19.5 18.1 16.9 14.4 9.0 IFRSUK GAAP

22. Bringing it all together Strategy built around convergence & innovation Consistently successful in competitive & dynamic markets New wave now accounts for a third of group revenue Networked IT services provider of choice Strong momentum with track record of delivery SIXTEEN quarters of EPS growth NINE quarters of revenue growth FIVE quarters of improvement in EBITDA trend Positive operational trends will continue Growing revenues, profits & dividends