1© British Telecommunications plc

© British Telecommunications plc

Building a broadband ecosystem

Ivan Skenderoski, May 2011

2© British Telecommunications plc

BT is making a major investment in fibre access

• $4bn investment to roll-out fibre to two-thirds of UK premises by 2015

– No other company in the world is investing as much in fibre without either public sector support or a regulatory regime that allows the company to make far greater returns

• Deploying at scale and pace– Installing +30,000 cabinets, enabling +1,000 exchanges, laying +50,000km of fibre,

supported by 23,000 engineers to over 16m premises by 2015

– > 250 cabinets and 80,000 homes and offices enabled every week

2/3 premises passed by 2015

5m premises passed by Spring 2011

1.5m premises passed by summer 2010

10m premises passed by2012

ADSL enabled for 99% of all premises

3© British Telecommunications plc

Our ‘mixed economy’ strategy

Fibre to the cabinet (FTTC)Up to 40Mb/s downstreamUp to 15 Mb/s upstream

Fibre to the premise (FTTP)Up to 100Mb/s downstreamUp to 30 Mb/s upstream

Exchanges Homes/Businesses

Copper (ADSL2+)Up to 24Mb/s downstream

ADSL 2+80% UK coverage by

2012

FTTC80 Mb/s downstream in

2012

FTTPTrial of 1000Mbps

downstream400 Mbps upstream

Copper

CopperFibre

Fibre

Cabinet

4© British Telecommunications plc

Balanced Scorecard

Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11

1014 16 19

26

Service Providers

BT Virgin Rutland Vtesse0

10

20

30

40

50

60Speed

Upload

Download

Mbp

s

Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11

1850 2009 2423

40075120

SME Sales

Open network needed so multiple providers can drive consumer demand

Some suppliers target only urban areas then

boast of speed on limited networks

Need to drive business as well as consumer take-up

BT Virgin Rutland Vtesse

£0 £0

£75

£50

£18£25

£30 £33

Consumer PriceUpfront Connection Monthly cost

Successful delivery of Superfast Broadband is about more than just high headline speeds

Installed Base

01/09/0

9

01/11/0

9

01/01/1

0

01/03/1

0

01/05/1

0

01/07/1

0

01/09/1

0

01/11/1

0

01/01/1

1

01/03/1

1

01/05/1

1

01/07/1

1

01/09/1

1

01/11/1

1

01/01/1

2

01/03/1

2

050000

100000150000200000250000300000350000400000

Virgin Media XXL Vtesse & Rutland

BT Infinity

Coverage

Technical advances can further lift speeds

beyond those currently envisaged

Trusted brand and marketing needed to drive take-up by

consumers

Competitive prices needed to drive

take-up

5© British Telecommunications plc

Open access, competition and consumer choice

6© British Telecommunications plc

Openreach Handover

Point

Fibre

Underground ‘duct’ or overhead pole

New FTTC ‘active’ cabinet

PIA

SLU

GEA

WBC FTTC/P

PIAPhysical

Infrastructure Access

SLUSub Loop

Unbundling

GEAGeneric Ethernet

Access

WBC FTTC/FTTPWholesale Broadband

Connect (fibre)

Core Network

CPs can participate across the fibre value chain

7© British Telecommunications plc

• BT has pledged to invest £30m in the government’s Next Generation Broadband Project

• FTTC technology to a majority of businesses with other fixed line solutions being used where appropriate

• Wholesale level solution to ensure all Service Providers can access services at the same T&Cs and cost.

• White label marketing campaign delivered prior to the enablement of an area to generate awareness of next generation broadband

DETI objective: “increase the availability of next

generation broadband speeds to 85% of

businesses by 2011.”

Northern Ireland

• Most ambitious rural broadband project in the world

• EU contribution of £53.5m is unlocking a BT investment of £78.5m.

• SFBB access up to 90 per cent of local businesses and homes by 2014.

• An array of service providers offering competition and innovation

Cornwall

Public private partnership to reach the ‘final third’

• £830m available from licence fee and DSO surplus

• BT will make funds available should we be successful in securing some of these funds

• BT estimates that this public funding if matched by private investment could take coverage of fibre to around 90% UK premises

Licensing

8© British Telecommunications plc

12 months ago, many of our customers hadn’t heard of ‘Superfast Broadband’ – now communities are competing for it

Race to Infinity has generated a consumer ‘buzz’

360k votes cast in a 3 month period (twice as many votes as the US campaign for 1 Gbps speeds)

Power of local, community-based marketing demonstrated

1.07m visits to the website 45% of voters did not opt out of

marketing (providing 165k marketable records)

Pre-registration on bt.com for planned SFBB exchanges increased by 70% throughout the race

10 exchanges won the competition and will receive SFBB by 2012

9© British Telecommunications plc

Over 360,000 votes cast in Race to Infinity campaign with 10 winning areas

BT is keeping its promises

145k BT Infinity installations in first year - ~ 6k sales a week

More than 9 million premises announced so far

Circa 5 mil million premises already passed

45 external service providers are selling or trialling SFBB

FTTP customer trials underway in Milton Keynes and London, commercial services launching late 2011

An additional 41 market towns announced for 2011/12 deployment

10© British Telecommunications plc