1. BT Group plc Q4 and preliminary 2007/8 full year results

2. BT Group plc Sir Michael Rake - Chairman

3. Forward-looking statements - caution 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 1995. These statements include, without limitation, those concerning: expectations of continuing growth in revenue, EBITDA, earnings per share and dividends per share; levels of free cash flow; continued growth in Global Services’ revenue and EBITDA margins; growth in new wave revenue, mainly from networked IT services and broadband; continued growth in the broadband market; cost efficiencies and reduced capital expenditure; investment in, and the delivery and benefits of, BT’s 21st Century Network and the expected cost savings; and the scope and delivery of next generation services. 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 results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences between actual results and those implied by the forward- looking statements include, but are not limited to: material adverse changes in economic conditions in the markets served by BT; future regulatory actions and conditions in BT’s operating areas, including competition from others; selection by BT of the appropriate trading and marketing models for its products and services; technological innovations, including the cost of developing new products, networks and solutions and the need to increase expenditures to improve the quality of service; the anticipated benefits and advantages of new technologies, products and services, including broadband and other new wave initiatives, not being realised; developments in the convergence of technologies; fluctuations in foreign currency exchange rates and interest rates; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs; the timing of entry and profitability of BT in certain communications markets; and general financial market conditions affecting BT’s performance and ability to raise finance. BT undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

4. Consistent strategy … –Improved service –Price innovation –Reduce costs / improve margin –Aggressive & creative marketing –Networked IT services –Broadband –Mobility solutions 21 st Century Network Long-term Partnership with our customers Defend traditional Grow new wave … evolving to meet our customers needs

5. Earnings per share (1) 23.9p Group revenue £20.7bn EBITDA (1) £5.8bn FY 2007/8 – Group financial headlines (1) Before specific items 11% 3% 2% 5% Free cash flow £1.5bn 5% Dividend 15.8p

6. FY 2007/8 – final dividend 10.4p pence Full year dividend 15.8p up 5%

7. Customers Globalisation Investment & returns People Opportunities and priorities Continue to deliver for customers and shareholders

8. BT Group plc Ben Verwaayen - CEO

9. Earnings per share (1) 7.0p Group revenue £5.4bn EBITDA (1) £1.6bn Operating profit (1) £0.8bn Free cash flow £1.7bn Q4 2007/8 – Group financial headlines (1) Before specific items and leavers 11% 2% 7% 9%

10. Q4 2007/8 – revenue by customer 40% 12% 23% 25% Corporate Consumer Business Carrier Strength in mix of customers and businesses

11. Corporate Q4 28% growth in non-UK revenue Further improvement in Global Services EBITDA* margin,13.7% Order intake £2.8bn Key business trends Globalisation Convergence Right sourcing Capabilities Corporate revenue growth

12. Reuters 2005/6 2004/5 2006/7 £m 2007/8 DFTS BT Global Services – £2.8bn order intake in Q4 Other orders Networked IT services Rolling 12 months order intake £8bn

13. BT Global Services – customer diversity Q4 2007/8 order intake

14. Business Q4 Value packages -39% increase in take-up Continued strong revenue growth –New wave up 33% –Basilica and Lynx boost service portfolio Developing our portfolio Expansion of capabilities into adjacent markets Niche business units complement overall strategy for SMEs Business revenue growth

15. BT Group plc Running VT

16. Consumer Q4 Revenue down 4% –Impact of free evening and weekend calls –New wave up 19% Household ARPU £274 up £1 UK’s No.1 retail broadband provider –4.4m connections –30% of net adds* Customers demand Value packages Innovative products Converged services Consumer household ARPU £ * DSL & LLU

17. Gaming Wireless Networks Monitoring and Control Home IT advisor BT Broadband Talk BT ToGo BT Total Broadband – work, rest and play Security & Storage “Go messenger” now has 300k users 250K customers now Openzone c.1m minutes of usage per day > 2m users All calls to our Helpdesks are now free Entertainment Launched May 7th > 600k users

18. BT Group plc Running VT

19. Gaming Wireless Networks Monitoring and Control Home IT advisor BT Broadband Talk BT ToGo BT Total Broadband – work, rest and play Security & Storage “Go messenger” now has 300k users 250K customers now Openzone c.1m minutes of usage per day > 2m users All calls to our Helpdesks are now free Entertainment Launched May 7th > 600k users

20. 000s Installed customer base Installed base 214k at the end of March Now over 250k Q4 net adds 94k 56k 37k 68% of new customers chose a subscription package at point of sale Usage 4,660hrs of VoD content now available The average number of views per subscriber, per month, was 29 – that’s entertainment

21. Carrier – BT Wholesale Q4 £1bn of contracts signed Operational trends continue as expected –Low margin transit and PRS revenue decline continues –Ongoing migration from IPstream to LLU and price reductions Introduced family of 21CN ‘smart’ broadband services –Higher speeds –Flexible bandwidth –Quality control for video Launch of next generation Ethernet Growth Continued success in long term managed solutions –£750m of managed access on next generation Ethernet signed in 2007/8 Agreements signed during the quarter include

22. Carrier – Openreach Q4 External revenue up 22% driven by LLU growth Operating cost down 2% due to previous investment in service –Average lead times on provision and repair improved by over 40% Market fundamentals LLU business model evolving Financial Framework Review due soon for public consultation 000’s ADSL Broadband

23. Transforming the cost base – FY 2007/8 £304m £625m £386m £260m £148m £15,152m £m Systems & processes Global propositions 21CN programmes Customer service BT Vision £14,679m FY2008/9 target of £700m £625m of cost efficiencies

24. 21CN – objective remains unchanged Legacy network21CN platform 17 networks to ONE global platform PSTN MigrationConverged Core End User ~5k nodes ~100 nodes DSL IP-MPLS-WDM Content ISP WWW Class 5 Call Server Fibre or Copper

25. 21CN – faster, better, cheaper services 21CN now customer led Speed to Market Power to Customers Cost Transformation Next Generation Services Scope extended to include 21CN Ethernet 21CN “Smart” Broadband Software Development Kits (SDK)

26. 21CN – progress to date 58% of UK national core infrastructure built 21CN “Smart” Broadband –Available from exchanges serving 1m homes and businesses 21CN Ethernet –Available to c. 20% of UK business market by the end of May 2008, rising to 80% or more in 12 months 21CN Global Platform –Available in 172 countries BT’s Software Development Kits (SDK) now in use –11,000 downloads –500 applications in production –5,000 in testing

27. 21CN – SDK, what developers say “We are very pleased with how rapidly we were able to add the voice and SMS capabilities into the BT BizBox solution…if it weren’t for BT’s SDK we would not have been able to do this so quickly.” Sarah Laylock, COO of TierLinear “BT says that it takes one line of code to add voice to an application and it’s true. This functionality is easily accessible and doesn’t require a large budget. Because we are leveraging the power of BT’s global network we know our applications can scale to handle high volumes if needed. This lets us focus on what we do best – building great applications.” Miha Lesjak, co-founder of Inova IT and inventor of Click2Call.

28. 21CN – forward view 21CN “Smart” Broadband –available to over 10m homes and businesses by April 2009 21CN Gigabit Ethernet –rising to c600 nodes by April 2009 –Gigabit speeds will be available Converged broadband & voice –Trials 2008, launch 2009 … upcoming in 2008/9 Substantial cost savings already delivered > £200m pa cost savings > £400m pa, legacy capex savings Total cash cost savings will exceed £1bn - Opex savings increase - Capex will be reduced over time Revenue opportunities available much earlier … financials Business case remains strongly NPV positive

29. The trends ARE your friends! Revenue * Before specific items and leavers 17th quarter of growth EBITDA* 9th quarter of growth EPS* 24th quarter of growth Dividends

30. BT Group plc Hanif Lalani – Group Finance Director

31. Q4 2007/8 – lines of business dashboard * External revenue (1) Before leavers Global Retail Wholesale Openreach Group 13% EBITDA (1) 8% 14% 2% 0% 10% 2% 12% 2% 22%* Revenue Global Retail Wholesale Openreach Group

32. BT Global Services 10% Q4 Revenue 13.7% EBITDA EBITDA margin 13% Revenue £2,226m 19% growth in MPLS EBITDA £304m with margin improving by 40bp –Maturing contracts –Global sourcing –Process improvement –SG&A reduced by 1% Delivered H2 margin expansion Operating profit up 30% EBITDA margin progression H1 9.6% 9.8% H2 11.5% 12.4% %

33. 2% 8% BT Retail EBITDA £m Revenue £2,158m New wave revenue up 24% –27% of total revenue Gross profit up 4% Margin improved 80bp to 36.5% EBITDA £391m Operating profit up 12% Q4 Revenue EBITDA

34. BT Wholesale External revenue mix £m Revenue £1,180m Transit and PRS – down £97m Broadband - down £54m (volume and price cuts) £1bn of orders signed in Q4 EBITDA £320m SG&A reduced by 9% Headcount reduced by 13% Process improvements helping to drive costs down 12% Q4 Revenue EBITDA 14%

35. External volumes 1% Q4 Revenue EBITDA 0% Revenue £1,320m External revenue up 22% Sales to other lines of business down 5% EBITDA £496m Operating costs reduced by £15m Record levels of service improvement Operating profit up 1%

36. Revenue POLOs Revenue (net) EBITDA ( pre leavers ) Depreciation & amortisation Operating profit ( pre leavers ) Operating margin Leaver costs Finance costs (net) Profit before tax Tax Profit for the period Earnings per share ( post leavers ) Earnings per share ( pre leavers ) 5,422 1,098 4,324 1,569 (755) 814 15.0% (56) (97) 658 (147) 511 6.5p 7.0p Q4 2007/8 results Q4 2006/7 Q4 2007/8 Change 5,292 1,071 4,221 1,537 (773) 764 14.4% (63) (70) 632 (155) 477 5.8p 6.3p Note: all numbers are before specific items. Q4 2007/8 specific charge £85m post tax. 2% 7% 5% 11% £m

37. Earnings per share * before exceptional items and goodwill from continuing activities ** before leavers and specific items pence * * ** *

38. 1,537 212 (836) 713 (68) 1,558 7,914 1,569 (159) (759) 1,195 (141) 1,705 9,460 Free cash flow EBITDA*( post leavers ) Interest & Tax Capex Working capital Other ( incl specific items ) Free cash flow Net debt Q4 2007/8 £m 32 (371) 77 482 (73) 147 1,546 Change £m * Before specific items Q4 2006/7 £m

39. Pension IAS 19 pre tax £bn BT Pension Scheme £2.9bn pre tax in surplus based on IAS19 valuation Next triennial funding valuation begins after 31/12/2008 Pension scheme asset mix – 45% in equities Pension interest credit 2008/9 £313m v £420m 2007/8 –but EBITDA benefits from a lower pension scheme service charge

40. 2008/9 outlook * Before leavers and specific items Revenue, continued growth expected Costs, £700m of efficiencies to be delivered EBITDA*, growth underpinned by cost transformation Earnings per share*, growth driven by operational performance Capex, reduces to around £3.1bn Free cash flow, similar level to 2007/8 Dividends per share, will also grow Continue to deliver for shareholders and customers

41. BT Group plc Ian Livingston

42. BT Group plc 15 May 2008