the best of both worlds

1. the best ofboth worlds BT Fusion Ian Livingston CEO BT Retail

2. BT Fusion - best of both worlds ‘all the convenience and features of a mobile phone with fixed line costs and quality’

3. BT Fusion – how it works BT Broadband line

4. The best of both worlds • BT landline rates when you are at home or office • Competitive mobile bundled minutes when you are out and about • Free BT Fusion Motorola v560 phone • Stylish, compact flip phone design with large, vivid colour display with video and camera • Free BT Hub to wireless network your home

5. Meeting customer needs “70% of customers avoid paying mobile rates by using a landline” “Over 30% of mobile calls are made from the home today” “19% of customers have problems with mobile coverage”

6. BT landline rates when calling from home or office • 5.5p per hour evenings/weekends • 3p per minute peak hours • Out and about • Competitive mobile rates • Free short calls home • Monthly subscription from just £9.99(inc 100 mobile minutes) • Free phone, free BT Hub

7. BT Fusion – exceptional value % saving 10 mins off-peak call % saving 10 mins Peak call 5 min (pence) 30 min (pence) 60 min (pence) 10 min (pence) Call type : from mobile device to UK landline in the home BT Fusion Off Peak 5.5p 5.5p 5.5p 5.5p BT Fusion Peak 15p 30p 90p 180p "3" Videotalk 500 25p 50p 150p 300p 40% 89% Orange 200+100 online 50p 100p 300p 600p 70% 95% 70% 95% O2 (Anytime) 200 50p 100p 300p 600p T-Mobile Relax 200 self service 50p 100p 300p 600p 70% 95% Virgin Pay monthly 200 75p 100p 200p 350p 70% 95% Sainsbury's O2 200 50p 100p 300p 600p 70% 95%

8. BT Fusion – exceptional value % saving 10 mins off-peak call % saving 10 mins Peak call Call type : from mobile device to UK landline in the home 5 min 10 min 30 min 60 min 5.5p 5.5p 5.5p 5.5p BT Fusion Off Peak 30p BT Fusion Peak 15p 90p 180p "3" Videotalk 500 25p 50p 150p 300p 40% 89% Orange 200+100 online 50p 100p 300p 600p 70% 95% 70% 95% O2 (Anytime) 200 50p 100p 300p 600p T-Mobile Relax 200 self service 50p 100p 300p 600p 70% 95% Virgin Pay monthly 200 100p 70% 75p 200p 350p 95% Sainsbury's O2 200 50p 100p 300p 600p 70% 95%

9. BT Fusion – exceptional value % saving 10 mins off-peak call % saving 10 mins Peak call Call type : from mobile device to UK landline in the home 5 min 10 min 30 min 60 min BT Fusion Off Peak 5.5p 5.5p 5.5p 5.5p BT Fusion Peak 15p 30p 90p 180p "3" Videotalk 500 25p 50p 150p 300p 40% 89% Orange 200+100 online 50p 100p 300p 600p 70% 95% 70% 95% O2 (Anytime) 200 50p 100p 300p 600p T-Mobile Relax 200 self service 100p 95% 50p 300p 600p 70% Virgin Pay monthly 200 75p 100p 200p 350p 70% 95% Sainsbury's O2 200 50p 100p 300p 600p 70% 95%

10. BT Fusion – exceptional value % saving 10 mins off-peak call % saving 10 mins Peak call Call type : from mobile device to UK landline in the home 5 min 10 min 30 min 60 min 5.5p BT Fusion Off Peak 5.5p 5.5p 5.5p BT Fusion Peak 15p 30p 90p 180p "3" Videotalk 500 25p 50p 150p 300p 40% 89% 600p Orange 200+100 online 50p 100p 300p 70% 95% 70% 95% O2 (Anytime) 200 50p 100p 300p 600p T-Mobile Relax 200 self service 50p 100p 300p 600p 70% 95% Over 99% saving Virgin Pay monthly 200 75p 100p 200p 350p 70% 95% Sainsbury's O2 200 50p 100p 300p 600p 70% 95%

11. Phone that automatically connects through BT Broadband • One personal phone • Free BT Hub to wireless network your home • 3 phones can be used at once • Seamless handover

12. Guaranteed coverage at home and office • Range 20-25 metres in typical home • 50-100 metres in free air • Excellent voice quality • Mobile when out and about

13. Start delivery to around 400 payingcustomers BT Fusion – a world first Today September • Start rollout Autumn • Further propositions for business Registertoday at bt.com/btfusion Just the start

14. just the start BT Fusion Steve Andrews Chief of Mobility & Convergence

15. BT Fusion – just the start Bluetooth Wi-Fi Today • Connection via Bluetooth to Broadband • Seamless in-call handover • Wi-Fi enabled BT Hub • Up to 6 phones per household, 3 calling simultaneously BT Broadband line

16. BT Fusion – just the start Wi-Fi • The future • Migration to Wi-Fi phones • Richer services at broadband speeds BT Broadband line • More places • More mobile devices

17. Evolution of BT Fusion- More devices • Greater range of devices from Tier 1 vendors • The Motorola V3 RAZR will be the next BT Fusion Bluetooth/UMA handset - available later this year • Working with Motorola, Nokia and Samsung to launch 6 Wi-Fi/ UMA handsets in around 12 months

18. Creating a world first

19. Creating a world first

20. Driving fixed mobile convergence globally Fixed Mobile Convergence Alliance (FMCA) • Currently the fastest growing operator alliance, founded & chaired by BT • Driving standards based solutions & convergence handsets • 18 Members representing over 300 million customers • Auna, AT&T Corp, Belgacom, Bezeq, Brasil Telecom, BT, Cegetel, Cesky Telecom, Eircom, Korea Telecom, KPN, NTT Com, PCCW, Rogers Wireless, Swisscom, TRUE/ Orange, Telecom New Zealand & Telkom South Africa

21. Typical new product growth Volume Years

22. Typical new product growth >5 million DSL Broadband customers 2001 2002 2004 2003 2005 Years

23. Connected anywhere A wireless world - through convergence Bluetooth Wi-Fi Public Wi-Fi Public Wi-Fi Private/Guest Wi-Fi

24. Connected anywhere A wireless world - through convergence Seamless, ubiquitous, easy to use & secure Bluetooth Wi-Fi Public Wi-Fi Public Wi-Fi Private/Guest Wi-Fi

25. Connected anywhere - BT Building the future Over 7800hotspots in the UK Enterprise wireless LAN & guest Wi-Fi Over 30,000 hotspots globally

26. Delivering new services & applications More convergencedevices Machine to machine High quality video-centric services EnterpriseBT Fusion Converged voice & data messaging

27. A world first from BT Ian LivingstonCEO BT Retail

28. BT Fusion – best of both worlds ‘all the convenience and features of a mobile phone with fixed line costs and quality’ A world first