1. BTID Transformation Briefing to CWU Executive

2. © British Telecommunications plc Agenda Welcome BTID transformation journey Right people - resourcing Right place - collocation Next Steps Managing change together Questions

3. © British Telecommunications plc BTID Transformation plan We have a significant gap (30%-40%) to our competitors in terms of headcount and as a result cost. Over the last 3 years we have made significant progress but so has the competition. The gap has closed but there is still a lot to do. We have five elements in our plan, designed to deliver change at pace: Our transformation plan: 1. Doing the right thing 2. With the right people 3. On the right platforms 4. With the right partners 5. In the right places In Q4 we plan to focus on people and places…

4. Making good progress against plan Major focus on displacing agency/subcontractor resource with direct labour Additional focus in Q4 – paid leavers scheme* * (business case for additional paid leavers being reviewed) BTD 2010/11 Resource Plan – P8 Actuals Planned Acquisitions Full Year P8 Total External Gains 262 137 Graduates/MBA 10 10 Skills Acquisition 252 127 Forecast Exits Full Year P8 Total External Exits 888 387 Paid Leavers 395 108 Other Losses 493 279 FTE 31/03/10 FTE 31/03/11P8 (ytd) Direct Labour 8,558 7,9048,224 Agency 283 140 207 Sub-Contractor 8,897 7,3488,297 Total 17,73815,394 16,728 FTE 31/0310 adjusted for org moves, 31/03/11 latest QRF3 The right people - resourcing

5. Why do we need the BTID Transition Centre? What does it do? The transition centre is about meeting BTID’s resourcing challenge as it changes to meet future demand. The size of the resourcing challenge makes it more important than ever for us to pull together across BT to resolve redeployment cases quickly and effectively. The BT Transition Centre (BTTC) is the place where BT people find new jobs and learn new skills if, for whatever reason, their old role comes to an end and within BTID we have a great track record of finding people new jobs. Performance to date 09/10 660 moved to BTID TC 26 remaining at end of fiscal year Average resolution time 68 days 80% resolved in 28 days 10/11 443 to date 239 resolved 128 active Average resolution time 77 days 80 % resolved in 43 days

6. BTTC Resolution highlights 127 resolved within BTID 77 resolved to other LoBs 25 paid leavers Speed Matching Software Development Centre Subcon/agency displacement Upskilling programme Paid leavers

7. © British Telecommunications plc A key enabler to improving quality, time to market and cost effectiveness is increased collaboration across our teams. Through collocation we plan to create effective working environments to harness the skills of all colleagues and encourage increased collaboration. Benefits for BT Delivering a world class global service for our customers Driving greater ROI from investment in GDCs Making the most out of our accommodation and maximising value of fixed costs Improvements in cycle time and increased accuracy have been tracked by teams working in GDC environments - this all helps us improve customer service Benefits for our customers Improved RFT & CT E2E problem resolution Improved facilities to use on-site and easier to work with our teams Benefits for our people More opportunities to connect with your team, manager and colleagues Enables team capabilities to be built more quickly and strongly Solving problems more quickly Processes and relationships become simpler when teams are collocated Address feelings of isolation among our colleagues In the right places - collocation

8. © British Telecommunications plc Principles for collocation Site by Site, role-based approach to collocation - agile working and collaboration –Identify in scope people and the roles they perform –Agree relevant location with each programme - by business need –Work with resource management to map roles to locations Options available to support people through the change where appropriate: –Relocation –Re-training –Redeployment - Transition Centre Future recruiting only to relevant site Incorporate lessons learnt from Operate & Openreach similar schemes and from our own Global Platforms GDC roll out Two-way communication and involvement throughout

9. Who, when, where... 7 All BTID UK employees - excluding ICT and location dependent Network staff who are subject to separate consideration. In scope currently 7028 UK staff in 200 locations. 4707 excluding ICT and location-dependent Network staff. Collocation to our 27 strategic locations Of the 4,707 UK employees in scope; 1,183 are in a top 4 site; of the remaining 3,524, 743 are within 20miles: NB The site list is subject to review as part of bau BT property strategy City3 months6 months9 months Belfast Glasgow Ipswich Cardiff Edinburgh Sevenoaks Milton Keynes Swindon Bristol Exeter Leavesden Newcastle Leeds Bolton Liverpool Macclesfield Leicester Wolverhampton Harmondsworth Southampton Reigate Brentwood Colchester Fleet Shrewsbury Sheffield London

10. Define GDC based roles Define GDC sites to be used Is the role one to be based in a GDC? Is the person within reasonable travel distance of a GDC site? If HW give 3 months notice of move If OHW or office based, move immediately Is there a valid business case for removal of home i.e. critical skills or talent Can we do a swap? Resolve surplus via BTTC Identify backfill at GDC & resolve surplus via BTTC Is individual prepared to move? Identify backfill at GDC and resolve surplus Move Yes No Yes No Yes No Yes Collocation decision tree

11. Managing change together What you can expect from me and my team –Working in collaboration with Prospect & CWU –Be honest and tell you as it is –Continue to develop further our detailed plans –Keep you informed - regular updates

12. © British Telecommunications plc Questions?