1. Fixed Line Text Messaging Contract Forum November 7th 2003

2. Market Massive growth in SMS in recent years (55 millions SMS now sent each day) (MDA 2003) Market took off with introduction of cross network messaging

3. Market Mobile SMS market predicted to be reaching saturation (Frost & Sullivan 2003) Fixed network is a natural expansion area Potential is over 24.1 million households with PSTN lines Fixed line does not replace mobile phones but will appeal to niches Older users who have little understanding of mobiles Very young without mobiles (acts as a stepping stone to mobile) (Frost & Sullivan 2003) Parents with teenage children Premium rate voting and interaction - in front of the TV Market is driven by handset availability

4. Market - Handsets DECT phones available from : Siemens; Philips: Sagem; Alcatel; Panasonic Keypad terminals available from Viking Telecom ; Amstrad Viking Telecom terminals available from approx. £30 Expectation is that 300,000 handsets will be operative by 2004 in UK

5. International experience Fixed line SMS deployed by over 80% of European incumbents Eircom - January 2003 (100,000 handsets) Belgacom Deutsche Telecom - May 2001 with T Mobile, rolling out interconnects 10 million messages in 3 months Telecom Italia - December 2000 Telecom Austria - September 2002 KPN - March 2003

6. UK MNO’s UK OLO or SP’s UK ISP’s Destination network ‘Any to Any’ messaging hub Messaging applications Originating Network SMS Xchange Mobile to Fixed Fixed to Mobile Fixed to Fixed BT Wholesale Product concept Any BT PSTN line

7. Products - PSTN to UK mobile SMS Trunk Unit Trunk Unit DLE Customer enters mobile number into SMS handset to send SMS message to 447711798202 SMS Platform SMS Platform Pseudo HLR Routing Request Pseudo MSC Mobile Network Tel no 01333444555 SMSC HLR MSC SMSC SMS Message Sent Fixed SMS Gateway Tel no 07711798202 FL Handset is registered on SMS platform on sending first outgoing text.

8. UK Mobile to UK PSTN SMS Trunk Unit Trunk Unit DLE SMS message to 441333444555 SMS Platform SMS Platform Pseudo HLR Routing Request Pseudo MSC Mobile Network Tel no 01333444555 SMSC HLR MSC SMSC SMS Message Sent Fixed SMS Gateway FSK delivery of Special presentation CLI to disable ringing PSTN line must have Caller ID capability Text delivered to text phone

9. Mobile to PSTN with text to speech conversion and into voicemail Trunk Unit Trunk Unit DLE SMS message to 441333444555 SMS Platform SMS Platform Pseudo HLR Routing Request Pseudo MSC Mobile Network Tel no 01333444555 SMSC HLR MSC SMSC SMS Message Sent Text to speech FL Gatewy Indication of message waiting 1571 Platform 1571 type Platform’s

10. Mobile to PSTN - text to speech conversion and a direct call Trunk Unit Trunk Unit DLE SMS message to 441333444555 SMS Platform SMS Platform Pseudo HLR Routing Request Pseudo MSC Mobile Network Tel no 01333444555 SMSC HLR MSC SMSC SMS Message Sent Text to speech FL Gatewy FSK delivery of Special presentation CLI to disable ringing PSTN user must have option to opt out from receiving these calls An SPG CR requested.

11. Time scales & Contractual Issues SIN 413 version 1.1 issued 31 st July 2003 (various interfaces specified) SPIN 080 issued 15 th August 2003 (for Service Providers) Internal BT trial of BT SMS Fixed to BT SMS Fixed only – now completed Trial Fixed & Mobile - Due to commence mid November2003 Launch – Expected to occur during the period December 2003 to January 2004. Contractual arrangements will be covered by the following schedules to the NCC Standard Interconnect Agreement:- Schedule 230 - BT Short Messages to the BT System Schedule 231 - BT Transit Short Messages via the BT System Schedule 430 - Operator Short Messages to the Operator System Charges will be notified in the appropriate NCCN.