1. www.btwholesale.com

2. CPS LOCAL EXCHANGE CALLS BT WHOLESALE UPDATE 2 SEPTEMBER 2004 TIM HOWSON PRODUCT DEVELOPMENT MANAGER The information in this presentation does not form part of a contract

3. www.btwholesale.com AGENDA BACKGROUND PROJECT TIMELINE FULL SOLUTION INTERIM SOLUTION

4. BACKGROUND CPS design recognised from inception as inefficient for same exchange calls (tromboning). Ofcom Statement published 30 th July 2004: BT now asked to keep these calls “on-net” and bill CPSO accordingly. Dependent on CPSO build-out to DLE New Product Variant – “CPS Local Exchange Calls” New Industry Working Group established – Same/Adjacent DLE IWG

5. BACKGROUND Call routing used by BT Retail Call routing used by fully interconnected CPSO BT DLE CPSO Switc h Own local exchange calls BT DLE CPSO Switc h BT DLE Adjacent connected local exchange calls

6. PROJECT TIMELINE 2005 Contract & DMA Dates tbc AXE 10 Activation 18 Mar – 31 Mar* System X Main Activation 1 Apr – 30 April* System X Residual Activation 2 May – 31 Oct* EBC Cycle 1 Apr EBC Cycle 1 Jul EBC Cycle 1 Oct EBC Cycle 1 Jan 100% 25% 50% 75% 0% 35% lines 92% lines 100% lines * These are planned dates

7. FULL SOLUTION Two Main phases plus one “Mop-Up” Phase BT will be discussing new contract with SAD IWG late October CPSO’s will need to “opt-in” to full solution on per DLE, per CPS Code basis. Revised DMA process and timescales to be offered for this “on-boarding” CDRs to be made available for fraud prevention and billing purposes, c.f. Wholesale Calls & Wholesale Access

8. INTERIM SOLUTION BT has identified those CPS calls over DLE interconnects that would qualify for the new product variant. BT will be issuing credit notes against same/adjacent connected DLE calls meeting above criteria – against the cost disadvantage as seen by Ofcom. Credit notes will be issued monthly from September, backdated to 1 July 2004. Interim Solution will continue until CPSO takes full solution on particular DLE under roll-out plan. BT has published an amendment to the Carrier Price List and issued a briefing to explain this in more detail.