BT & Openreach Implementing the TSR Undertakings

1. BT & OpenreachImplementing the TSR Undertakings Welcome

2. Agenda

3. Agenda

4. BT Group TSR Programme Office Peter McCarthy-Ward / Greg Mook

5. Delivering the Undertakings • 254 discrete deliverables • Each owned within a programme structure • Programme Offices in each Line of Business • Co-ordinated at Group Level • Fortnightly tracking – reporting underway • Gap analyses – local & central • Early deliverables ahead of schedule

6. Programme Governance Programme Steering Group Role: Executive Steering Group level forum with overall responsibility for direction. Reports to the BT Board Operating Committee Programme Office Expert Group Interpretation Trouble shooting Validate projects/compliance Helpdesk Provide first line support to LoBs Record advice given Maintain Web Site – inclu. FAQs/Advice register Programme Board Ensure best practice, Track Progress, Manage Priorities Resolve Project Issues, Ensure Cross-Line of Business Consistency Programme Communications Escalate where required to the Steering Group • Reporting • By project • By Undertaking owner

7. Training EAB/O Create Code of Practice Finance Remuneration schemes STEERING GROUP OC Ofcom EAO LOB Programmes – manage LOB specific & input to/action from Group & Horizontals PROGRAMME BOARD Reporting Programme Office Global Services Openreach Wholesale Group Retail Bruce Stanford Director, TSR Programmes Tim Cowen General Counsel and Commercial Director Duncan Ingram Director, Business Improvement Steve Robertson CEO Peter McCarthy-Ward Director, Equivalence BTW Organisation MIS security Contract Management Mechanism NGN Equipment Co-location Leased Lines Product Transparency Culture etc Openreach Build Brand Address Matching Culture New products Number Portability etc Organisation dissolve and build Consumption of EoI services Cross Group Co-ordination of Product Equivalence

8. Retail Undertakings Programme Process & ISD Link Legal & Regulatory People & Comms Compliance Finance John Weaver & Jeff Richardson Products John Weaver Sales & Service Operations & Behaviour Steve Askew Systems (& ISD Link) Jacqueline Steed N. Ireland Alan Hall GS Link Graham Stanton Andrew Parker & Alan Lazarus Stef Norman Neil Taylor Richard Cooper Charlie McKay

9. Undertakings Achieved • appointment of the CEO of Openreach (5.24) • establishment of the Equal Access Board and Office (10.1- 5) • publication of Estimated Space Availability Details (7.1.2) • Openreach brand developed in accordance with 5.48 • The accommodation the Openreach top team will require has been identified in readiness for delivering Undertaking 5.33.1 • Openreach build on schedule

10. To monitor BT’s compliance with the Undertakings including:- Undertaking milestone achievements Equivalence KPIs Soft KPIs: perceptions, attitudes, behaviours Complaints (internal & external) Assess breaches (material and non-material) Review Openreach SLAs performance and response to SORs Review SMP portfolio roadmap and investment Review Code of Practice, training, etc etc Reporting… Regularly to BT Group plc Board, monthly minutes to Ofcom & annual public report EAB Remit

11. EAB Carl Symon Chair Sir Bryan Carsberg Independent Stephen Pettit Independent Dr Peter Radley Independent Sally Davis BT

12. 2005 10 October EAB members announced 1 November EAB formally launched 3 November First EAB meeting: introductions, governance, Code of Practice 21 November Second EAB meeting. Openreach present their initial KPIs, complaints handling policy 19 December Third EAB meeting. BTW and Openreach present their final KPIs 2006 1 February BT reports first quarter KPI performance April/May EAB prepares first Annual Report to Ofcom June EAB publishes summary annual report Key EAB Dates

13. Openreach implementation Anne Heal / Chris Jagusz

14. Building a better access network higher bandwidth services increased fault rate greater demands on field service reduce fault rate network health extended lead times free up resources additional resources reliable network reduced lead times

15. Nov HQ signage Dec Passcards Jan 06 Website Email domain Stationery Vans Uniforms Poster & press PR Creating a new identity CP use of brand CP toolkit Generic copy

16. Organising our resources CEO: Steve Robertson Chief Engineer Bob Cowie Systems Colin Windsor ServiceJohn Small Sales, Products & MarketingAnne Heal General CounselNigel Cheek Operations Andrew JonesJohn Dunn Equivalence & Public AffairsEmma Gilthorpe

17. Buy only from Openreach Buy from Openreach and other BT businesses Buy products only from other BT businesses Customer communications Full operation 1 2 3 Direct relationship with Openreach only Parallel relationship with both Existing account relationship only Nov Dec Jan 06 Mar 06 Implementation Orders, faults, bills > deal directly with Openreach Working with customers Three approaches to account relationships for Openreach products Primary channel for its products; full service; active marketing and sales

18. Overview of Product Plans for EoI

19. LLU Barry Jacques /Paul Barratt

20. Local Loop Unbundling:Product Plans to Deliver our Commitments • LLU already has EOI • Retail & Global buy SMPF/MPF identically to LLUOs • IPstream must consume SMPF & MPF by EOI dates • Ready For Service For New lines – 30th June 2006 • Installed Base Migration Complete – 31st December 2006 • “To LLU” Product Migrations with IPstream EOI dates • Strategic systems needed to: - • Deliver Industry & Wholesale volumes • Implement process improvements • Drive down unit costs – “zero touch”

21. Stand Alone Address Matching Service 31st Dec XML Interface IPstream EOI Launch Launch Pilot Start IPstream EOI Launch Pilot Start 13th Feb 30th June May - July 30th June 30th June TBC Local Loop Unbundling: Systems Enhancements (Q4) Jan- March 06 (Q3) Sept- Dec 05 (Q1) April – June 06 (Q2)June - Sept 06 Address Matching Phase 0 SMPF Phase 1 MPF/ASSURANCE Phase 2

22. Local Loop Unbundling:KPIs The two key current KPIs related to equivalence are as follows: • Percentage of MPF and SMPF orders provisioned by customer agreed date. This applies to all CPs including BT’s downstream businesses • Percentage of MPF and SMPF faults cleared within 40 clock hours. This applies to all CPs including BT’s downstream businesses. Openreach will publish existing LLU KPIs to demonstrate that Industry receives the same service as BT

23. Industry Consultation • Existing Industry forums to continue • No additional TSR meetings - handled through existing forums • BTW to attend OTA and Industry forums • Collaborative approach to continue • OTA facilitation

24. WLR (analogue & digital) Martin Whewell

25. Wholesale Line Rental Market - 2005 • Vertically integrated supply of BT Retail Lines • Equivalence delivered through WLR2 product to Service Providers • Over 2M PSTN and ISDN WLR2 Lines

26. Today’s Vertically Integrated systems and processes......

27. Wholesale Line Rental 2007-2010 • Openreach will supply WLR3 through equivalent systems and processes • From 1/1/07 new end user customers will be provided through EoI systems • Existing customers of BT Retail may still be managed by direct access to CSS • Migration will be complete by June 2010 • ISDN line migration complete by 2009 • WLR2 Product withdrawal to be agreed with industry

28. .....Major redesign required

29. WLR3 improvements over WLR2 Key differences between products; • Operational interfaces redefined with emphasis on B2B trading • Processes redefined around “Dialogue Services” to allow greater visibility and control • Address Matching and Appointing improvements built in • Pre-Validation and Inventory dialogues remove the need forLike-For-Like transfers • “Keep Customer Informed” (KCI) touch-points proactively sent • Bus/Res distinction removed; differentiation provided by CP • Forecast driven prioritisation removed But...... • End user product specification unchanged

30. Consultation Milestones   • 22nd Sept – SPF Commercial Group: Discussion of principles • 12th Oct – Commercial Group Working Party • 13th Oct – FSPA Plenary Update to industry • 20th Oct – Commercial Group Draft Product Description presented • 24th Nov - Commercial Group Issue Product Description • From Dec 05 Weekly Process Workshops proposed • 14th Dec - IT Workshop planning • Mid Jan - BT Hosts IT Workshop • Further IT Workshops to be scheduled  

31. Wholesale Extension Services & Backhaul Extension Services Peter Newton/ Chris Jagusz

32. BT’s Undertakings: WES and BES • TSR Overview – what needs to be done • Meeting the letter and spirit of the TSR obligations • Industry Agreement – Capturing Requirements • Please join existing WES/BES Forum exercise • Timeline and Milestones

33. BT’s Undertakings: WES and BES • WES and BES EoI by September 2006 • WES A, WES B and WEES subject to request • Several Backhaul Undertakings including Aggregation • IBMC date for BT’s relevant retail Ethernet-based local area network extension serviceMarch 2007

34. Design Options being discussed with Industry • Wholesale Extension Services – Access (WES-A) • From End User site to Local Access Node • Wholesale Extension Services – Backhaul (WES-B) • From Local Access Node to Local Access Node • From Local Access Node to Major Access Node • From Local Access Node to CP PoP site • From Major Access Node to CP PoP site • Wholesale Extension Services – Aggregation • Aggregation of smaller sites prior to onward backhauling • Wholesale End-to-End Ethernet Services (WEES) • End User site to End User site

35. Proposed Timeline 20CN TSR Product Timeline The assumed notification period for Industry for changes depends on whether it is a new product (28 days) or a change to an existing product (90 days) - as detailed in the Leased Lines Market Review. Initial Industry Forum Consultation Session Start feasibility study for new EOI products based on requirements Phase 1 requirements capture complete TSR agreed, detailing BT’s undertakings Launch new EOI products IBMC (Migration) Date Start EOI Solution Designs Systems & Process Testing Systems & Process Trial Start EOI Development A A A A A A A A G C Sep 22nd 05 Nov 14th 2005 Nov 30th 2005 Dec 1st 2005 Jan 2006 Mar 2006 July 2006 Sept 1st 2006 Sept 30th 2006 March 31st 2007 TSR review by BT / Industry Industry submitted SORs (with prioritised requirements) by 30/11/05 BT to present results of solution design to Industry for Phase 1 Launch BT to use formal notification procedures of product / price / contracts. Dates to be confirmed Please note that the launch on 21CN is subject to the deployment of 21CN NGN across the UK. Consultation between Industry and BT to aide creation of product definitions(dates to be agreed 14/11/05) BT to present results of feasibility study to Industry for Phase 1 (30/9/2006 launch), detailing the specific products / features which can feasibly be launched in Phase 1. Phase 2 dates to be agreed and confirmed.

36. Building new products: TILLAP/ TILLBP • Traditional Interface Leased Line Access / Backhaul Product* • Described in Undertakings • Developed if demand exists • Of greatest interest to network operators • Customer meetings & industry consultation * The situation is different for RBS. PPC CP network NTE Local Exchange Tier 1Node Point of Handover TILLAP X TILLBP X

37. IPstream Malcolm Austin / Rob Thomas www.btwholesale.com

38. IPstream Broadband Equivalence • EoI for IPstream across BT Group: 31st December ’05 • Actions • BT Retail and BT Global will use exactly the same processes, systems and procedures as all other CPs. • IPstream consuming SMPF/MPF: • New orders 30th June • Installed Base Migration Complete (IBMC) 31st December ’06 • Actions • IPstream Home & Office (ADSL) will consume SMPF • IPstream Symmetric (SDSL) will consume MPF • Consultation & discussion via Broadband SP Forums early in New Year

39. IPstream Equivalence – 3 elements Retail and Global – consuming IPstream equivalently 1 OneIT Systems Plan Front end Systems and Process changes. Training and Compliance Wholesale providing IPstream equivalently 2r Systems and Process changes requiring downstream and upstream interdependent changes 2w Communications Providers consuming IPStream 3 Upgrade changes for Communications Providers (to match retail access)

40. IPstream Equivalence Retail and Global – consuming IPstream equivalently OneIT Systems Plan • Train c.4000 advisers • Remove wholesale data from front end systems, change processes and procedures (100 system changes, 10 main ones, 200 processes changed/modified) • Embed compliance measures in systems and processes 1 Wholesale providing IPstream equivalently 2w 2r • Increase capacity of B2B gateway • Increase capacity of external availability checker • Enhance processes to handle incompatible products Communications Providers consuming IPStream • Improved test and diagnostics • Enhanced billing T&Cs • Improved escalation process 3 3

41. System & Process Interdependent Changes 2w • Customer Business to Business Gateways • Development to support increase in volumes via external interface for provision, repair and test and diagnostics. • Removal of BTR/BTGS internal access to Woosh; eCo already compliant but may need to support small increase of volumes. • Customer Information • Development to support access via external website interface for availability checker and Customer Reports (BBCR) • No daily increase of volumes but improvements to stability. • Product Incompatibilities • Enhancement to existing process to ensure all cases are dealt with in an equivalent manner.

42. 3 Upgrade Changes for Communications Providers • Woosh Functionality • Improvements to ease of access for testing via btw.com, along with access to a new functionality to enable batch session kill for all CPs. • Access to further diagnostic tools via btw.com are planned. • Customer Communication imminent. • Enhanced Billing Terms & Conditions • Currently only one bill is provided per legal entity - in future, multiple bills will be available for “accounts” provided there is physical separation between the networks related to these different “accounts”. • Customer Communication being planned. • Escalation Process – Provision and Repair • There has been a complete review of the BT internal escalation processes to ensure compliance • Further internal communications and training has taken place

43. IPStream Migrations • All Communications Providers toexperience: • Standard lead times • Same order gateways • Same process for migrating • Same reporting mechanisms • Same pricing • Same systems * Subject to outcome of validation process ** Subject to agreement with OfCom

44. Break

45. Undertakings ImplementationManagement of BT Wholesale’s Products & Portfolio Organisational & Governance ApproachAngus Flett /Guy Bradshaw / Rob Thomas

46. Guiding Principles – a common baseline Maintain operational efficiencies, where no conflict with Undertakings Meet both the letter and the spirit of the Undertakings Transform into a high-quality and responsive wholesaler Design implementation in an efficient manner Drive changes in both behaviour and outcome

47. Product Management Organisation: Colour Key KEY: Four “Product” Communities RED BTW CORE NETWORK SERVICES or “BTW-CNS” (‘BTWS’ in the Undertakings) BLUE BTW VALUE-ADDED NETWORK SERVICES or “BTW-VNS” (‘BTS’ in the Undertakings) GREEN BTW NEW & UNREGULATED SERVICES or “BTW-UNS” WHITE SHARED FUNCTIONS (which support the three product management units)

48. Product Management Organisation: Separation framework Cameron Rejali Portfolio Tarquin Bellinger Product Management Angus Flett Programme Management Paul Banjo Comm mgt Cust exp -Other Pricing Prog mgt Pricing Prod devt Prog mgt Pricing Prod devt Prog mgt Pricing Prod devt BTW-CNS BTW-VNS BTW-UNS

49. BTW-CNS BTW--VNS BTW-UNS Angus Flett Director, Product Management Andy Kennedy Commercial Management Andy Jugg BTW-VNS IPstream & Voice Mike Ward Acting BTW-CNS - Interconnect Guy Bradshaw Customer Experience Don Peacock PRICING Rob Thomas BTW-CNS - Datastream & Data Guy Bradshaw (Acting) BTW - New & Unregulated Services

50. Paul Banjo (NDH) Director, Product Development Programme Management BTW-CNS Development & Launch Steve James Pipeline Management and Key Programmes Keith Edwards BTW-VNS Development & Launch Andy Wyatt Pete Burrell BTW-UNS / Applications Product Development Customer Experience, Process & Trials