NICC PLC Update Paul Momtahan, Head Of Marketing

SSE Telecom Overview A Scottish & Southern Energy Company Telecom Business of Scottish and Southern Energy PLC Telecom activities developed in Scottish Hydro-Electric and Southern Electric prior to their merger from internal requirements Scottish Hydro-Electric gained a PTO licence in 1993 and embarked on development of customer projects and sales. 2,300km fibre network that was laid alongside the Scottish & Southern Energy’s electricity distribution networks in the South of England and North of Scotland, Scottish & Southern Energy’s portfolio of over sites pylons for mobile operators Acquired Neos In April 2003 Founded in 1997 National UK Network With 120 POPs UK’s First Ethernet Service Provider (Launched Ethernet Service in 10/2001) Other products: SDH Leased Lines, IP Transit, Dark Fibre, Integration Business

SSE Telecom Overview Scottish & Southern Energy PLC Company Background Formed in December 1998 from the merger of Scottish Hydro-Electric and Southern Electric Electricity Supply to 5 Million Customers Electricity Distribution to 3.3 Million Customers Top 5 UK Generator of Electricity 9,474 Employees Unrivalled Financial Strength FSTE 100 Company 2003 Revenues: £4,113.6M 2003 Operating Profit: £685.3M Market Capitalisation: £5B~£6B “AA-” Standard & Poor Credit Rating (Best in Telecom!)

CPE* PC Medium Voltage Grid Low Voltage (“Last mile”) High Voltage In-Premise (“Last Inch”) Phone(s) (Fibre Network) point to multi-point point to point * CPE - Customer Premise Equipment Internet & PSTN PSTN - Public Service Telephone Network Power Line Communications Architecture

Symmetrical bandwidth with future growth potential (Up to 100Mbps in vendor labs) Power Line Communications Speed & Reach

Home Transformer Sub-station HV Network To Backbone Network Meter/ Distrib. Outdoor SegmentIndoor Segment Controller Modem Power Line Communications First Mile

Home Transformer Sub-station HV Network To Backbone Network Meter/ Distrib. Outdoor SegmentIndoor Segment Controller Modem Repeater Low Voltage Pillar Street Furniture Customer Meter Box Power Line Communications First Mile with Repeaters

MTU Transformer Sub-station HV Network Outdoor SegmentIndoor Segment To Backbone Network Meter/ Distrib. ETH. Controller Modem Adapter Power Line Communications First Mile + In-Premises for MTU

Power Line Communications Potential PLC Coverage Area= 3.3M Customers

SSE PLC Trials Campbletown Re-cap one of Scotland's most remote mainland towns being the furthest from any other town on the British mainland until recently, main contact with the rest of Scotland was by sea Ireland is just 20 km away

Schematic Network SSE PLC Trials Campbletown Re-cap

SSE PLC Trials Increasing Scale of Activities

SSE PLC Trials Winchester Marketing Trial

SSE PLC Trials Stonehaven Marketing Trial

PLC Economics Satellite Backhaul Lower capital cost but higher running costs Scale Requirements: 30~50 customers –Within reach of one substation (400 m radius) –Within reach of multiple substations SDSL links on same exchange Medium Voltage PLC links Broadband wireless links Income/customer = ~£30/month –Public sector requirements can reduce this

PLC Economics Fibre or Microwave Backhaul Lower running costs Scale Requirements: 100~200 customers –Within reach of one substation (400 m radius) –Within reach of multiple substations SDSL links on same exchange Medium Voltage PLC links Broadband wireless links Income/customer = ~£30/month –Public sector requirements can reduce this –Public sector backhaul can reduce this further

PLC Regulation PLC has the potential to interfere (Like any radio source) Probability of interference is very low (based on real life experience) Equipment can shift/block selected frequencies to avoid problems Need to show protection of “small users” Impossible to legislate for complete radio protection and free spectrum use

PLC Regulation No regulatory problems (worldwide still no significant complaints arising from PLC despite 100’s of thousands of passed properties) 80% of the measured values are below 55dBµV/m (for both indoor and outdoor measurement points) 94% of the measured outdoor values are below the JWG CENELEC/ETSI currently proposed limit (55 dBµV/m) 60% of the outdoor measurements are lower than the surrounding noise floor

Broadband by PLC works –Technically –Profitable commercial models exist The real test is whether utilities can market broadband services to their customers –On their own –In partnership with others –In direct competition with cable & DSL Summary

NICC PLC Update Paul Momtahan, Head Of Marketing