© British Telecommunications plc

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TSS Union Briefing

August 23rd, 2011

Contents1. Overview and Strategy2. Scorecard Performance3. Efficiency Plans4. People Update

© British Telecommunications plc

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TSS Organisation

• 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 £20 billion businesses

• Combination of IT C2M, IT Provisioning and IT T2R activities:– C2M & Provisioning 47%, T2R 44%, Other 9%

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Commercial Operations & Transformation

IT Provisioning, Change Mgt. and T2R

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© British Telecommunications plc

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TSS Organisation & Facts – Our People

Figures as per May 2011

Spain45

US61

France104

UK246

India3

Belgium26

Australia4

China5

Germany72 Italy

51

Japan1

Netherlands72

Singapore1

Sweden2

© British Telecommunications plc

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Transformation – Service Intelligence

Competitiveness and Excellence Objectives are not fullyunderpinned by Transformation, working hard to improve this

ProgressMetricRAG Status

P4 FY

SI Trading Reliability was above Target in Q1, but below Target thus far in Q2 (particularly in Openreach)

Trading Reliability Improvements

CAREagile EEI and PCI remain strong relative to BT Group,However, we need to address the slight downward trend in

the Q1 CAREagile results

TSS Total Labour Costs

TSS 3rd Party Costs

People (OCI & Care)

TSS Scorecard – P4 YTD and FY Outlook

TSS Service Basket Measures

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

Forecast is on-Target until August, then it gets more challenging due to lack of and/or delays with enablers.

Subcon savings are compensating

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

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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

11/12 Resourcing Update

© British Telecommunications plc

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TSS CARE Agile Q2

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Lowest scoring questions Q2

Things are changing for the better inmy business unit

3.01

Our senior leaders are making the rightdecisions to make BT a better business.

3.13

Highest scoring questions Q2

I feel like my manager cares about meas a person

4.21

My manager values people who do theright thing for the customer

4.19

TSS Care Agile Results

EEI

PCI

B&H(Yes)

B&H & PTNS

Q1

3.62

3.81

14%

21%

Q2

3.66

3.83

9%

20%

© British Telecommunications plc

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Sickness / StressIncreased productivity must not come at the expense of spoiling our sickness trends

% Calendar Days Lost SI (mth/YTD)

Breakdown view of TSS UK population:

Apr-11 May-11 Jun-11 Jul-110.000.501.001.502.002.503.003.50

ARB ARE ARF ARIAROO ARQ Total

© British Telecommunications plc

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A deep dive was completed to fully understand the Q1 CAREagile feedback and variances between the teams.

Ongoing actions are as follows:1. Improve communication of our transformation achievements to date and future

plans

2. Ensure that we make our strategy meaningful and credible for our people

3. Harness for transformation the energy and sense of purpose we have when dealing with a crisis

4. Provide clear guidance and an escalation process for handling perceived harassment from customers, project managers etc…

5. Ensure our own Line Managers do not bully or harass

6. Review the way we carry out performance management to ensure consistency, fairness and a clear understanding of its purpose

7. Ensure all our people have monthly 1:1s

8. Monitor workloads and hours worked more effectively

9. Review our training and accreditation requirements and plan accordingly

10. Review issues around tools and working with other units

People Update - TSS Engagement Plan

© British Telecommunications plc

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Questions

Service IntelligenceHow we

thinkHow we deliverHow we behave

where people feel supported to try, learn and succeed

recognise and reinforce the positive contribution our people make

managing services across the organisation to delight customers in their overall experience

prioritise our efforts and the investment in people, processes and systems

getting better everyday in everything we do

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Confidenceto Try

Recognise Our Contribution

Understand Our Customers

Invest Intelligently

Continuous Improvement

© British Telecommunications plc

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Back Up Slides

© British Telecommunications plc

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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

TSS Organisation & Facts

Enterprise Infrastructure

Servers, Storage and Backup

Data Centres (Managed by BTO)

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

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

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

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Commercial Operations & Transformation

IT Provisioning, Change Mgt. and T2R

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