Welcome to the BT Wholesale Fibre Product Surgeries

AgendaFacilitator - Carole Haywood-PooleFibre Overview - Lee MartinFTTC Product Update – Neil TyeFTTP Product Update - Natalie WalkerOpenreach Marketing – Lee Martin (Jackie Hasted)

Legal and Confidentiality StatementThe information contained in this Presentation is confidential information as per your terms and conditions with British Telecommunications plc (BT). Please treat it accordingly and do not forward, republish or permit unauthorized access. The information contained in this Presentation represents BT Wholesale’s current thinking for the intended WBC FTTP product at the time this Presentation was developed and may be subject to change. In relation to the WBC FTTP product referred to in this Presentation which are currently under development and/or trial, BT gives no undertaking or other commitment that it will be made commercially available in the same form.

Any price indications and time scales contained within this Presentation are estimates for discussion purposes only and do not constitute any contractual or other obligation. All prices/charges are shown exclusive of value added tax and any other applicable duties and taxes which will be added to invoices.

BT reserves the right to make changes to the information in this Presentation at any time without further notice.

Any developments carried out by CPs based on the contents of this Presentation are entirely at the CP’s own risk.Note “BT” and “BT Wholesale” are trademarks of British Telecommunications plc.

© British Telecommunications plc, 2012. All rights reserved.British Telecommunications plcRegistered Office: 81 Newgate Street London EC1A 7AJ Registered in England no.1800000

Industry Engagement PlanPreviously,

• We’ve held FTTP (and before that FTTC) weekly trial calls

• We’ve had 121 engagement with ‘early adopter’ customers

• We’ve shared the development roadmap via the ISP forum

• The product collateral has been stored across Inspire & BTW.com as well as having separate availability & coverage data sites

It’s now time to:

• Conduct discreet trials with our supplier (where appropriate) to minimise the impact of your trial participation

• To share fibre plans & developments at an industry level via these surgeries & the newsletter

• Continue to support the ISP forum

• To rationalise the product collateral onto a single BTW.com site & share the Openreach activity with you first hand

Product Surgeries

When & who:

• We’ll hold them monthly (4th Thursday of every month)

• Every customer who has in interest in Fibre will be welcome to attend

What:

• Monthly insight into the marketplace & BT’s strategy & plans

• Hour long, interactive with plenty of time assigned for Q&A

What its not:

• A replacement for the ISP forum

• Really a place to cover systems & process issues

• A one way cascade of information

WBC Fibre - Fibre Overview

Lee Martin

~19,000 cabinets ready for service at ~790 exchanges

2/3 premises passed by end2014

5m premises passed byMay 2011

1.5m premises passed bysummer 2010

10m premisespassed by end2012

ADSL enabled for 99% of all premises

Nearly 7 million+ ‘premises’ passed with 400,000 EU’s taking Superfast broadband (6% conversion)

Superfast broadband

Constantly evolving our plans both commercially and technically to meet the needs of the market and responding to UK Government

60+ external service providers are trialling or selling BT’s fibre services

Announcement of plans to double FTTC speeds to 80/20 & introduce 300+Mb on FTTP in 2012

FTTC & FTTP coverage % changing, less reliance on FTTP to deliver the faster speeds

Today, more than 99% of UK homes have access to broadband, of up to 20Mbps

Public funding would get SFBB to 90% of UK homes and businesses by 2018 £830m has been pledged by the UK

Government; Potential for further local authority,

regional government and EU funding

Changes to the access network frequency band-plan will allow us to deliver up to 80Mbps on FTTC

We are testing vectoring technology which has the potential to offer over 100Mbps to over 50% of UK premises

Superfast broadbandWill transform the UK bandwidth landscape

Before SFBB

Commercial

SFBB

+ BDUK

funding

+ Band-plan

change

s+ Vecto

ring

+ Furth

er

investm

ent

Broadband

SFFB

20Mbps

90%

Superfast BB for our wholesale customers

Any WBC or WBMC customer can take the superfast broadband, it uses the same backhaul bandwidth as WBC (ADSL2+) – 200kbit/s per EU can be assumed (based on industry average)

Coverage, 1 in 10 of BTW CPs EU’s in served by an enabled cabinet or DP currently, demand is greater than supply

Assessing availability, understanding & applying the coverage data: datasets on BTw.com, interactive map on Openreach site weekly cabinet information published on BTw.com & postcode/cabinet translator bulk check is available – special offer in January geographical concentrations are appearing

Proposition development at least a dozen different ‘service offering’ permutations available we’ll not encroach in your ‘value’ space higher converters are typically business ISP’s

We now have more than 60 external CPs taking the service with an end user base of over 6,500, some are in test, some have many 100s of lines

Our records indicate that there are over 50,000 (external) EU’s that are within the existing

fibre footprint, with that number set to double over the next 12 months, as BDUK funding becomes available that number could again be increased

The average conversion has risen from 7% in October to 9% in January, our group aspiration is to achieve a 20-30% conversion over the next few years, many of our CPs are converting at a rate of 15% or higher already

Consumer conversion is as healthy as business conversion FTTP conversion is double the average FTTC conversion

We’re seeing double digit month on month growth across the base as marketing campaigns are now starting to reap dividends

Impact on backhaul networks is still real but starting to stabilise at ~200Kbit/s per EU

FTTC conversion synopsis

We’d like to do a quick poll to gather your feedback & then take Q&A

WBC Fibre – Introduction to FTTPNatalie Walker

FTTP was introduced in November last year (EMD) with commercial launch expected in Spring/Summer 2012

Available as part of the WBC portfolio to all WBC & WBMC customers

We have nearly 5,000 FTTP lines already 45,000+ premises already within footprint

at 11 exchanges so far

Fibre to the Premises (FTTP)

Primarily designed to be used as an infill for FTTC, greenfield & as an alternative to FTTC

Designed to match the FTTC speeds (& price) & also offer an optional higher headline speed

Multiple CPs per fibre line

• All WBC CPs can now place FTTP orders• Remember the connection offer!

Advantages include: GPON, so no electronics Inherently reliable Hub & spoke architecture pre-built (at

Openreach expense) up to the DP the serves the premise

Future proof, expecting ongoing development and speeds

WBC FTTP topology & architecture

Speed uplift to include 80M and 330M

FTTP Development plans for Spring – Summer 2012

MOU/MDU solutions

FTTP overlay and New Sites

BDUK funding & regional opportunities

Real Time QoS

Coverage

New products

Launch considerations

Take up

Yes, it is concentrated, and likely to be less than 25%. But: FTTP extends existing FTTC products Large pockets of FTTP only due to new developments, FOX,

regional funding , the Cornwall solution has 40% FTTP coverage

BT Wholesale CP’s have been very successful converting customers to fibre, and evidence so far suggests they are even better with FTTP!

Concern with 100M headline rate if changes are likely, but:• Openreach would only withdraw in consultation with industry• At least a year away• Avoid forced migrations unless equivalent product exist

CommercialsTypically Bandwidth Charges are an area for concern, but:• FTTP bandwidth integrated with WBC, so impact is very small by

comparison to copper usage

We’d like to do a quick poll to gather your feedback & then take Q&A

WBC Fibre – update on FTTCNeil Tye

80Mb FTTC & 330Mb FTTP

products being launched

Fibre Market

Virgin – very much in the press, very public

‘speed war’ materialising

Sky - When will they enter the fibre market &

what will that do to the RRP

02, Talk Talk etc. – what are their plans for fibre, they’ll not want their market

eroded

Increased customer

awareness of fibre

‘Window of opportunity’ challenge for the BTW

external customers to stake a claim

Increasing Openreach fibre

roll-out & concentrations

FTTC 80/20 Trial Update

Technical trial nearly complete (28th Jan) 160 orders successfully completed since 9th Jan All systems performed as expected Average speeds 65Mbits – with top speeds at 79.9Mbits!

Full customer trial due to start soon! (6th Feb) No limit on number of trial lines No geographical restriction – it will be national! Free line rental during customer trial!

Launch/Pricing Awaiting confirmed launch date from Openreach Will be released 28 days prior to launch

Data consumption drivers

• Average household data consumption has grown 7 fold in the last 5 years; Ofcom forecast it will grow by a factor of 33 over the next 10 years

• BBC iPlayer requires 0.5-1.5 Mbps for SD; > 3Mbps for HD. Broadcast HD TV currently requires 8-11Mbps; Broadcast 3D TV requires 13-17Mbps

• Global internet video is now 40% of Consumer internet traffic and will reach 62% by 2015. Cisco, VNI report, 06/11

• By 2015, the average family might require 40-55Mbps ; young single adults between 20-35Mbps

• ~ 50Mbps will give a consumer 3 HD broadcast TV channels being viewed live, 2HD channels being recorded during peak period

• Concurrency is the killer application – Smart-Phones, Smart-Pads, PC’s, gaming devices, IPTVs all connected to the home network at the same time

• In this multi-user, multi-device environment, increasingly video rich usage of broadband with HDTV, HD VOD and HD gaming is driving demand for greater speeds and bandwidth. Cloud computing and storage is adding to this demand

InteractiveOnline

Gaming

HighDefinition TV

VideoConferencing

Accessing ContentStreamed Online

Super-FastBroadbandConnection

We’ll now take Q&A

Openreach Superfast Fibre Marketing

Creating awareness to stimulate demand

CP neutral local awareness marketing campaigns Reminder: Why is Openreach doing this?

– We can help drive awareness and take up by utilising two channels unique to us – our street assets and our relationship with local councils

Objective: Raise awareness, generate curiosity about superfast fibre, stimulate the general public to find out more (via www.superfast-openreach.co.uk)

Activities– Branding of Openreach assets - Cabinet stickers and Superfast branded vans,

guard rail posters – Joint Openreach/Council branded flyers for distribution by engineers and via

council run buildings (leisure centre, libraries, offices)– Joint local PR activity, competitions, collateral, social media, web banners

and promotion via council publications Call to action – visit www.superfast-openreach.co.uk to find out more and where

you can buy from (site includes a list of launched CPs – make sure you are on there)

Expected Results– During 2011, campaign activity in Cardiff, Cheshire and Bristol has driven, on

average, a 5% uplift in weekly order numbers in the exchange areas covered

CP neutral local awareness marketing campaign locations: Jan-April 2012

NB exact timings to be confirmed via TWG as agreements with local councils firmed up

City / Area Exchanges Live? Forecast Date

Milton Keynes

Bradwell Abbey Yes Milton Keynes Yes Newport Pagnell, Yes Shenley Church End Yes Wolverton Yes

Bridgend

Aberkenfig Yes Bridgend Yes Kenfig Hill Yes Pencoed Yes Porthcawl Yes Pontycymnmer Mar-12

West Sussex

Horsham Yes Southwater Mar-12Haywards Heath Yes Lindfield Feb-12Burgess Hill Mar-12Phase 2 (Q1) Selsey Jun-12Pagham, Jun-12Bognor Regis Jun-12Middleton on Sea Jun-12 Littlehampton Jun-12Rustington Jun-12Worthing (3 exchanges) Jun-12 Lancing Jun-12Shoreham Jun-12Southwick Jun-12

Stamford Stamford Yes

TendringManningtree Mar-12Clacton-On-Sea Mar-12Frinton-On-Sea Mar-12

Grtr Manchester

Ardwick Dec-12Chorleton Yes Altrincham Yes Ringway Yes Sale Yes Trafford Jun-12Urmston Yes Didsbury Yes Manchester central Yes Manchester East Yes Mercury (March 12) Mar-12Mosside Yes Rusholme Yes

Cheshire

Phase 1 - Congleton Yes Phase 2 - Alsager (Mar 12) Mar-12Holmes Chapel Yes Middlewhich, Yes Sandbach (Mar 12) Yes Chester North Mar-12Chester Central Yes Chester South Yes

BathBath Kingsmead Yes Radstock Yes Midsomer Norton Yes

Evesham Evesham Yes Exeter Exeter Yes

Nottingham

Arkwright Dec-12Basford Yes Sherwood Yes Trentside (Radcliffe) Yes Nottingham Archer Yes

Derby

Mickleover Yes Chellaston Yes Derby Mar-12Peartree Yes Willowcroft Mar-12

York

Dringhouses Mar-12Haxby Yes Melrosegate Mar-12York Yes Definitely going ahead during Q4 ( Jan to March )

Ongoing dialogue with councils - could slip into Q1 (April to June)

www.superfast-openreach.co.uk has seen an increasing trend in visits during 2011, and w/c 8 January saw a record breaking number of connections

January February March April May June July August September October NovemberDecember0

5000

10000

15000

20000

25000

30000

35000

Total visits

Interest is growing....2012 is going to be the year of superfast broadband – get involved now!

For more information on Openreach CP neutral local awareness marketing campaigns contact:Jackie Hasted, Head of Portfolio Marketing, Openreachjackie.hasted@openreach.co.ukTel: 01977 594170

We’d like to do a quick poll to gather your feedback & then take final Q&A

Slides will be available on the fibre pages of btw.com