Economic cost per userTotal Subscribers 2,500,000

Non recurring costs MPF SMPF

DSLAM, Cards & Test capex £30.75 £20.43

Colo & Tie Cables setup £33.17 £31.95 18 Months Broadband & Phone £305.82 First 3 months @ 9.99 £23.97 12 Months See Speak Surf £26.00 First 6 months @ 13.99 £83.94

Backhaul setup £6.71 £6.71 Connection Charge £29.99 Next 9 months @ 12.99 £116.91 Line Rental £0.00 Next 12 months @ 22.99 £275.88

Metronode, Core & switch capex £19.11 £6.90 Average Price £18.66 Average Price £11.74 Average Price £26.00 Line Rental £10.50

OSS Systems £6.00 £6.00 Average Price £20.57

Voice Systems £4.00

Total £99.74 £71.99

Double play Single play Single play Single play

Recurring costs MPF SMPF Fixed £18.66 Fixed £11.74 Fixed £26.00 Fixed £31.07

BT costs £6.67 £1.30 Old MPF Price £6.67 Call Revenue £7.50 Call Revenue £7.50 Call Revenue £7.50 Call Revenue £7.50

Staff & other overheads £0.40 £0.40 New MPF £7.58 Call Termination £1.50 Call Termination NA Content Revenue NA Call Termination £1.50

Equipment O&M £0.35 £0.22 Total Monthly £27.66 Total Monthly £19.24 Total Monthly £33.50 Total Monthly £40.07

Colo & Tie cable rental £0.53 £0.41 Minus Vat £23.54 Minus Vat £16.37 Minus Vat £28.51 Minus Vat £34.10

Backhaul £0.12 £0.12

Core network £0.17 £0.17

Transit £0.48 £0.48 Call Costs £2.55 Call Costs £4.79 Call Costs £5.74 Call Costs £3.83

Email, hosting, RADIUS/LDAP £0.41 £0.41 Antivirus & Security £0.00 Antivirus & Security £0.30 BT Antivirus & Security £0.30

OSS costs £0.20 £0.20 BT CPS/WCA Costs £0.00 BT CPW/WCA Costs £0.00

Voice Services £0.07 £0.00 Content Cost £1.25

Support cost £1.57 £1.57 TalkTalk Total Including Costs £20.98 Tiscali Total Including Costs £11.59 Sky Total Including Costs £20.92 BT Total Including Costs £29.68

Total £10.96 £3.70

Marketing £20.00 Marketing £20.00 Marketing £50.00 Marketing £30.00

Based on using Local BNS1000 backhaul Connection Charge £27.54 Connection Charge £25.39 Connection Charge £25.39 Connection Charge £27.54

Modem + P&P £21.97 Modem £11.97 Wireless Router £28.00 BT Home Hub £30.00

Total monthlycost Sky Box + Install £150.00

Total SAC £69.51 Total SAC £57.36 Total SAC £253.39 Total SAC £87.54

Cost only install

Double play Single play Double play Single play Months Payback Double play Payback Single play Payback with £20 Capex (Setup) Single play + WLR Payback Single play + WLR

1 year payback 19.27 9.70 16.83 8.28 12 1 year margin -£4.08 1 year margin -£2.89 1 year margin -£9.90 1 year margin £3.11

18 month payback 16.50 7.70 14.78 6.66 18 18 month margin £0.63 18 month margin £0.70 18 month margin -£0.86 18 month margin £5.55

2 year payback 15.11 6.70 13.75 5.85 24 2 year margin £2.98 2 year margin £2.50 2 year margin £3.66 2 year margin £6.76

3 year payback 13.73 5.70 12.73 5.04 36 3 year margin £5.33 3 year margin £4.29 3 year margin £8.18 3 year margin £7.98

4 year payback 13.03 5.20 12.21 4.63 48 4 year margin £6.50 4 year margin £5.19 4 year margin £10.44 4 year margin £8.58

5 year payback 12.62 4.90 11.90 4.39 60 5 year margin £7.21 5 year margin £5.73 5 year margin £11.79 5 year margin £8.95

Talk Talk Double Play MPF Tiscali Single Play SMPF + CPS/WCA Sky Single Play SMPF + CPS/WCA BT Double Play MPF

Total access service Exc. Core & Backhaul

Talk Talk SAC Tiscali SAC Sky SAC BT SAC

Talk Talk Costs Tiscali Costs Sky Costs BT Costs

BT Promotional PricingSky Promotional Pricing Tiscali Promotional PricingTalk Talk Promotional Pricing

Talk Talk Revenue Tiscali Revenue Sky Revenue BT Revenue