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BT Delivering World's First National All-IP Network

June 18, 2007

With 30 million telephone customers in the United Kingdom alone, BT is a leading provider of communications solutions serving customers in over 170 countries. Over the last few years, the company has embarked on a complete transformation of its existing telecom network--investing $19.8 billion to build the world's first national all-IP network, the 21st Century Network (21CN).

To better understand the strategic importance of this next-generation network to the company's future, three of BT's leading executives recently sat down to discuss how 21CN will impact BT, its customers and the future of communications in the United Kingdom and the rest of the world. The three executives include: Neil Rogers, 21CN's managing director; Tim Hubbard, who is responsible for strategic solutions at BT Wholesale; and Allison Mitchell, BT's director of network products.

Why did you undertake such a massive rebuilding of your core asset, your network?

Tim Hubbard: In the past, each of our networks and each of our services operated in a stove pipe model. Individual services were delivered independently and each had its own network environment and its own management. Over time this model became very complex and costly, and prohibitive in terms of growth and moving on to deliver next-generation services. So we've taken a sledgehammer to those stove pipes.

What will be the impact of the new network on BT?

Neil Rogers:21CN touches just about everything that BT does--the way in which we interact with customers, with vendors, the way in which the networks work, the manner in which we make products, all over the world. So this is a transformation of BT, and when we finish, we will have a brand new BT business system. That's what we're trying to create.

You are replacing an antiquated PSTN and switching off 16 legacy networks in the process. How much do you anticipate saving in reduced operating costs?

Tim Hubbard: We expect to save $2 billion a year in reduced operating costs. By building 21CN we have created a converged next-generation network that enables all services to be supported across the same platform. And I'm not just talking about next generation services, but even the traditional services that we support currently on our traditional networks in their stove pipe model will move across to this converged network infrastructure.

21CN will complement your existing products such as Vision, BT's video on demand service, and Fusion, which provides customers with a single phone number by fusing mobile wireless service with VoIP over domestic ADSL. Is this what you mean by flexibility, the ability to offer so many different types of services across one network infrastructure?

Neil Rogers: Yes, we will be much more agile, in fact we describe it as building a type of collaborative enterprise. We will be able to collaborate with whomever is at the edge of the network such as integrating with a consumer-based application. We will be able to load that onto our system and deliver it to customers. Essentially, it allows us to innovate much quicker. We can innovate on the latest social trend, or the latest piece of technology or whatever is happening at that moment. For telcos in particular, if you can't operate like that, you risk being excluded from it.

The speed with which you will now be able to respond to customer demands appears to be a major advantage of the new network. Could you expand on this?

Allison Mitchell: Speed of service delivery is absolutely critical for us. We have to be first to market to gain the competitive advantage. I think this is also important because customers are changing the way that they work so rapidly-- and the way they run their lives so rapidly--that we have to be constantly ahead of the game. So previously where it might take us 18 months to bring a service to market, we can now do that in six months and even in some cases reduce that down to four to six weeks, because we're using reusable common capabilities.

Do you believe your customers will recognize the value of a converged network?

Allison Mitchell: Yes, they might not know that word, but they want to be able to use the same services over the same device. And this is what 21CN provides. It is our core network and all our systems, all of our services will rely on 21CN. It is critical to the company. It enables us to completely transform our business by providing a common-capability infrastructure along with the supporting software and services that enable us to be nimble and fast to market.

How does the new network and the agility it provides help BT to conduct business in 170 countries?

Tim Hubbard: 21CN is going to empower everyone--end users, residential customers, and business customers--in a way they probably haven't even thought possible. It will enable the power of imagination such that people can come up with new ideas and new concepts and if these ideas can be offered from a computer, they can be plugged into 21CN and made available as services to the rest of the world.

What were the key criteria when you were selecting vendors to build 21CN?

Neil Rogers: The architecture, of course, was very important. And though we had a good sense of what the architecture would look like when we got there, we didn't known exactly what the steps would be like getting us there. This is where the importance of a vendor's culture, and the ability to collaborate with the vendor, became important. We went through a huge vendor selection exercise, as you would imagine. And part of that vendor selection was not about the technologies, although the technologies are important. A large part of it was about the compatibility of cultures between our people and the vendor we selected.

One chosen partner is Cisco and its CRS-1 next generation switch router that helps to deliver the IP MPLS converged core that's at the heart of the 21CN infrastructure. What else did Cisco bring to the engagement?

Neil Rogers: We know Cisco well, we've worked with them many, many years and we trust the Cisco components in our network. More importantly, however, we trust the organization. And for us, trust was the most important thing. You have to invest in the relationship.

What else do you envision the network offering that hadn't been possible with the limitations of the old network?

Tim Hubbard: 21CN is going to unleash the power of imagination. It's going to allow me to think of new ways to communicate, to think of new types of services that can be brought to people across the world.

My son, who's nine years old, for instance, sits in front of the computer and actually has an instant messaging conversation with his dad. He has a telephony conversation through the computer with dad. And he has a video conversation through the computer with dad. My son is growing up in an environment that is so different that the idea of a telephone seems arcane.

What will be the lasting legacy of 21CN?

Neil Rogers: 21CN is a work in progress, one that is connecting and enabling customers and expanding worlds of opportunity. And that is what I think its lasting legacy will be--empowering individuals to achieve more of what they want, whether that is creating new businesses globally, communicating their ideas easily, or collaborating with others that share their passion and motivations. I see it as a very exciting time to be alive.

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