Contents Overview and Strategy Scorecard Performance Efficiency Plans People Update

1. Contents • Overview and Strategy • Scorecard Performance • Efficiency Plans • People Update

2. TSS Organisation IT Provisioning, Change Mgt. and T2R • Technical Service Solutions manages BT’s global IT estate which supports BT’s e2e processes and external customer services • End-Customer Data Centre Services • Internal IT Services • Enterprise IT Services • Storage & Backup • Midrange Servers and Operating Systems • Enterprise Infrastructure • Data Centres, Power and Cooling • TSS is a c. £117m IT organisation with 675 BT FTE across 14 countries supporting BT’s £20billion businesses • Combination of IT C2M, IT Provisioning and IT T2R activities: • C2M & Provisioning 47%, T2R 44%, Other 9% End-Customer Data Centre Services/Enterprise IT/Internal IT Commercial Operations & Transformation Strategy Data Centres Enterprise Infrastructure Server, Storage & Backup

3. TSS Organisation & Facts – Our People UK 246 Belgium 26 Netherlands 72 Spain 45 France 104 Germany 72 Italy 51 Sweden 2 China 5 Japan 1 US 61 Singapore 1 Australia 4 India 3 Figures as per May 2011

4. TSS Scorecard – P4 YTD and FY Outlook RAG Status P4 FY Metric Progress Forecast is on-Target until August, then it gets more challenging due to lack of and/or delays with enablers. Subcon savings are compensating TSS Total Labour Costs Slight overspend on 3rd Party IT costs in Q1 addressed by the EMC deal. Need to deliver non-UK mitigation plan and avoid budget oversights TSS 3rd Party Costs CAREagile EEI and PCI remain strong relative to BT Group, However, we need to address the slight downward trend in the Q1 CAREagile results People (OCI & Care) Trading Reliability Improvements SI Trading Reliability was above Target in Q1, but below Target thus far in Q2 (particularly in Openreach) TSS Service Basket Measures Consolidated TSS Service Basket Scorecard is now in place. All measure are slightly above Target apart from As-is IT Provisioning which is slightly below Target Transformation – Service Intelligence Competitiveness and Excellence Objectives are not fully underpinned by Transformation, working hard to improve this

5. 11/12 Resourcing Update At end-Q1, TSS was 36% UK and 64% non-UK • The 246 UK FTE were 68% Managers, 32% Team Members and zero Agency 2011/12 UK efficiency challenge is net 14% (incl. Absorbed Growth) 24 UK efficiencies have already been delivered YTD, 12 opportunities are still in progress as follows: 2 * Transfer to C6 Transformation 3 * Transfer to EoSL activities 4 * Positive Selection and subsequent Transfer to CTC 3 * Transfer Out with no Budget

6. TSS CARE Agile Q2

7. Sickness / StressIncreased productivity must not come at the expense of spoiling our sickness trends Breakdown view of TSS UK population:

8. People Update - TSS Engagement Plan • A deep dive was completed to fully understand the Q1 CAREagile feedback and variances between the teams. • Ongoing actions are as follows: • Improve communication of our transformation achievements to date and future plans • Ensure that we make our strategy meaningful and credible for our people • Harness for transformation the energy and sense of purpose we have when dealing with a crisis • Provide clear guidance and an escalation process for handling perceived harassment from customers, project managers etc… • Ensure our own Line Managers do not bully or harass • Review the way we carry out performance management to ensure consistency, fairness and a clear understanding of its purpose • Ensure all our people have monthly 1:1s • Monitor workloads and hours worked more effectively • Review our training and accreditation requirements and plan accordingly • Review issues around tools and working with other units

9. Questions Service Intelligence How we think How we behave How we deliver Invest Intelligently Confidence to Try Recognise Our Contribution Understand Our Customers Continuous Improvement prioritise our efforts and the investment in people, processes and systems managing services across the organisation to delight customers in their overall experience getting better everyday in everything we do where people feel supported to try, learn and succeed recognise and reinforce the positive contribution our people make PRINCIPLE 4 PRINCIPLE 1 PRINCIPLE 3 PRINCIPLE 2 PRINCIPLE 5

10. Back Up Slides

11. TSS Organisation & Facts IT Provisioning, Change Mgt. and T2R End-Customer Data Centre Services/Enterprise IT/Internal IT Commercial Operations & Transformation Strategy • 20,000+ servers covering the UK, US, Netherlands & Germany. Key technologies include ESX VMware, Linux, Solaris and Windows • 13,296TeraBytes of SAN and NAS storage • 16,710 Backup clients, 26,893 Terabytes of Backup data, 937 Cartridge Drives Servers, Storage and Backup Data Centres Enterprise Infrastructure Server, Storage & Backup • 4,300 Sites, 640,000 Ethernet Ports, 15,500 devices, 29,000 Components • 7,300 WAN links, 140,000 BT DNS entries • 30 million IP Addresses Enterprise Infrastructure • Data Centres covering the UK (20), Benelux (3), Hong Kong (1), US (3) and numerous IT locations • UK DC Power: 63 generators, 62 transformers, 104 UPS, 594 PDS, 5498 battery cells, 36 chillers plants and +561ACUs Data Centres (Managed by BTO) End -Customer Data Centre Services / Enterprise IT / Internal IT • ICT: Supporting £150M+ GS revenue with 150+ customers • Enterprise IT: Maintain & support system stack providing more than £3 Billion in GS revenue • Internal IT: Support more than 14.000 users in Asia Pac and migrations to the strategic BT systems stack