1. BT Wholesale TDM Circuit Strategy “Evolution rather than revolution” Consult 21 – Industry Webcall 29 th January 2009

2. 2 AGENDA  Welcome and Introductions  Products Positioning  Confirmation of the TDM strategy  Sub 2M/bits TDM circuits approach and feasibility  Feasibility results for 2M/bits and above TDM circuits  Infrastructure Change out  Next steps, timings and plans  Summary  Q&A session

3. 3 BT TDM Products BT Wholesale TDM Products BT Global Services TDM & Analogue Products Non-BT CPs End user customers Positioning of TDM products

4. 4 Confirmation of the 2Mbit/s & above TDM strategy HOW > Two distinct bandwidth areas – Sub 2Mbit/s 2Mbit/s & above Based on consultation with Industry Use of formal feasibility study to assess Shared with industry WHAT > Deliver the same product functionality as 20C Continue to offer Customer Experience as is currently provided on 20C Ensure changes are in collaboration with Customers with minimal service impact Intention is to retain existing systems for ordering, billing, faults etc Upgrade obsolete 20C infrastructure with 21CN Native TDM components Minimize disruption as a result of infrastructure upgrades Native TDM Services

5. 5 Feasibility & approach for sub 2M/bits TDM circuits Feasibility has started Interim Update March 2009 Expected completion June 2009 Covers Analogue & Digital Services, based on the requirements fed in from all interested industry bodies Specific focus to maintain comparable E2E performance as existing services

6. 6 Feasibility results for 2M/bits & above TDM circuits A phased approach allowing withdrawal of legacy infrastructure & systems with minimum customer disruption and over time replacing obsolete components with 21CN Native TDM compliant components and systems supporting existing products Continue with the majority of our 20C PPC portfolio Continue to use native SDH technology (no emulation). Retain existing Access and NTE Infrastructure upgrade activity will take place as business as usual The PPC product will retain its existing framework - i.e. a Point of Handover (POH), a 3rd Party end and a Circuit between these two points PPC services (including PPC V1 and PPC V2) will continue to be delivered as per the current product definition.

7. 3 rd Party PoHLegacy Transmission 21CN Transmission 21CN NGN 21CN transmission is same technology as 20CN SDH & WDM – just more up to date equipment 21CN transmission is a bearer for 21CN NGN 20CN transmission is separate – not currently connected to 21CN All TDM is currently routed over 20CN Existing transmission & TDM services TECHNOLOGY CHANGEOUT STRATEGY

8. PoHLegacy Transmission 21CN Transmission 21CN NGN Need to begin to move customer sites onto 21CN to close 20CN infrastructure as it becomes obsolete Customers with multiple sites will have some delivered on 20CN infrastructure and some on 21CN infrastructure during the changeover This will result in mixed 20CN & 21CN infrastructure UPGRADE WILL BE PLANNED TO MINIMIZE DISRUPTION Upgrade of obsolete 20CN to 21CN infrastructure 3 rd Party 3 rd Party 3 rd Party TECHNOLOGY CHANGEOUT STRATEGY

9. 9 Next steps, timings and plans 200620072008 Jan 2008 Apr 2008 May 2008 Oct 2008 Nov 2008 Dec 2009 Q1 2009 Q2 2009 Q3 2009 Q4 Industry Bi-Laterals Formal Industry Consultation Consultation Document Draft 21C Business Case.Review 21C Leadership Team sign off Monthly Point to Point Updates Consultation Document Final 21C Experts sessions 21C TDM PRD 2Mbit/s Feasibility 2Mbit/s Feasibility Sign Off Sub 2Mbit/s Scoping 2Mbit/s Solution Design 2Mbit/s Trial Sub 2Mbit/s Feasibility 2Mbit/s Testing with CPs 2Mbit/s Infrastructure Changeout Trial

10. 10 TDM STRATEGY – SUMMARY Evolution not Revolution Industry consultation and customer feedback has shaped the decision process Two separate areas involved - Below 2Mbit/s and above 2Mbit/s Sub 2Mbit/s Feasibility continues 2Mbit/s + PPCs remain on the BTW portfolio until well into the next decade Native SDH Technology Existing PPC functionality will be supported Existing NTE will continue to be used and replaced only when obsolete 21CN components in solution design for 2009 deployment Transformation will be & infrastructure upgrades will be phased Engagement remains pro-active through Consult 21 and ongoing

11. 11 GLOSARY OF KEY TERMS Native TDM Non emulated transmission providing contention free point to point bandwidth Legacy Pre 21CN equipment maintained in the network Bearer A higher bandwidth circuit that can carry a lower bandwidth circuit

12. 12  Q&A session