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EASYNET TEACH-IN21 MARCH 2006

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ANDREW GRIFFITH

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OBJECTIVES FOR TODAY

• Introduction to Easynet’s management team

• To offer a greater background level of understanding of

– Broadband and LLU in the U.K.

– Easynet’s core network infrastructure and its capabilities

– Easynet’s corporate business

• Review of Sky’s market leading content services to mobile and PC

• Today will not include

– Details of Sky’s broadband consumer proposition

– Financial guidance

• Broadband launch expected for H2 calendar 2006

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AGENDA

Introduction

Easynet and LLU in the U.K. David Rowe

Easynet corporate business David Rowe

Innovation in content distribution Stephen Nuttall

Conclusion Andrew Griffith

Questions and answers

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FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and business, and management’s strategy, plans and objectives for the Group. These statements include, without limitation, those that express forecasts, expectations and projections with regard to the potential for growth of free-to-air and pay-TV, advertising growth, DTH subscriber growth and Multiroom and Sky+ penetration, DTH revenue, profitability and margin growth, cash flow generation, subscriber acquisition costs and marketing expenditure, capital expenditure programmes and proposals for returning capital to shareholders

These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly competitive environment, the effects of government regulation upon the Group's activities, its reliance on technology, which is subject to risk, change and development, its ability to continue to obtain exclusive rights to movies, sports events and other programming content, risks inherent in the implementation of large-scale capital expenditure projects, the Group’s ability to continue to communicate and market its services effectively, and the risks associated with the Group's operation of digital television transmission in the U.K. and Ireland.

Information on some risks and uncertainties are described in the "Risk Factors" section of Sky's Annual Report on Form 20-F for the period ended 30 June 2005. Copies of the Annual Report on Form 20-F are available on request from British Sky Broadcasting Group plc, Grant Way, Isleworth TW7 5QD. All forward-looking statements in this document are based on information known to the Group on the date hereof. The Group undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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SKY AND EASYNETA PLATFORM FOR GROWTH

• Customers increasingly demand more flexibility, choice and control over entertainment and communications services– What they want to watch, when they want, how they want

– TV interactivity and internet

• Requires a range of delivery strategies– Satellite, PVR and broadband

• Easynet provides the leading broadband infrastructure to meet those needs in an economically efficient way

– World-class network infrastructure

– Technical expertise with pioneering and innovative capabilities

– Strong and experienced management team

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• Increasingly cash rich, time poor society

• Home-working is increasing

• The make-up of existing homes is changing

• There will be increasing demand for more…

– Self-contained entertainment friendly rooms

– Entertainment products per household

– Bandwidth in and out of the household

OUR CUSTOMERS ARE CHANGING

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WHOLE HOME SOLUTIONS FROM SKY

TRADITIONAL PHONEINTERNET CALLS

MOBILE PHONESKY BY MOBILESKY MOBILE TVSKY+ REMOTE RECORD

TV SCREENAND SKY BOXMULTIROOM

LAPTOP AND PCBROADBAND INTERNET ACCESSSKY BY BROADBANDINTERNET CALLS

TV SCREEN AND SKY BOXSKY HDSKY+

SKY BY BROADBAND

SKY GNOMEPORTABLE WIRELESS AUDIO

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Broadband

Narrowband

STRONG GROWTH IN BROADBAND CONNECTIONS

BROADBAND OPPORTUNITY

2001 2002 2003 2004 2010

0

5

10

15

20

Source: OFCOM, IDC, Enders, Sky estimates

Mill

ion

2005

0.3

11.4 11.4 8.66.5

1.8

18.09.76.21.4

10.7

3.2

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CUSTOMERS ARE DEMANDING MORE PERSONALISATION AND CONTROL • Broadband users(1)

– Fourfold increase in the number of music track downloads

– 36% download video clips

– 35% choose email over more expensive voice calls

– 26% listen to digital radio

• Sky+ users

– c.20% of Sky+ TV viewing is recorded

– Sky+ customers watch more TV from a wider choice of channels

MORE INNOVATION MAKES ACCESS MORE VALUABLESource: OFCOM, Sky research, (1)Number of broadband users claim to

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BRINGING TOGETHER THE WHOLE HOME SOLUTION

• TV and radio

• Sky by broadband

• Sky by mobile

• Push VOD

• Broadband access

• Softphone VOIP

• CPS Telephony

2006

• TV and radio

• Sky by broadband

• Sky by mobile

• Pull VOD

• Broadband access

• VOIP Telephony

• IPTV

Integrated Entertainment & Communicationservices

2007

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SKY’S INFRASTRUCTURE A PLATFORM FOR GROWTH

HIGH DOWNSTREAM BANDWIDTH

DTH SATELLITE

ALWAYS-ON BROADBAND

MASSIVE LOCAL STORAGE

THE COMBINATION OF SATELLITE DELIVERY, MASSIVE LOCAL STORAGE AND ALWAYS-ON BROADBAND WILL CREATE AN

UNRIVALLED INTERACTIVE ENTERTAINMENT PLATFORM

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EASYNET AND LLU IN THE U.K.DAVID ROWE

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HISTORY OF EASYNETCREATING THE BUSINESS

August 1994 Founded by CEO David Rowe

November 1996 Acquired U.K. Online and selected as an ISP for Microsoft e-commerce solution

September 1999 Launched the first Internet access service provided by a public sector institution in the U.K.

January 2001 Unbundles first U.K. exchange, becoming the only LLU operator in the U.K.

July 2001 Merger with Ipsaris completed, bringing extensive U.K. network (from Marconi)

August 2003 Unbundles 100th exchange

July 2004 Unbundles 200th exchange

October 2005 Recommended cash offer by Sky

December 2005 Offer approved by OFT

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OUR NETWORKTHE BACKBONE

• Marconi-built network gained from Ipsaris, cost over £300m to build

• One of the largest fibre optic networks in the U.K. with 4,450 route km of fibre

• Metro rings in London, Birmingham, Glasgow and Edinburgh

• 320 petabit(1) network capacity

• ‘All IP’ it supports ‘new wave’ services such as VPNs, broadband, voice over IP, video over IP

• Low cost infrastructure

(1)320,000,000,000,000,000 bps

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OUR NETWORKFIBRE OPTIC

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OUR NETWORKCOLOCATION POPS AND REGENERATION SITES

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21 CENTURY NETWORK

• 21CNs are about the move away from legacynetworking to ‘all IP’ networks

• Allow removal of optical network complexity, and

greater integration between services

• Easynet completed its 21CN in 2004

– Marconi IPSARIS state of the art Optics

– CISCO/Juniper IP/MPLS Core

– Lucent Stinger Edge

– 100% IP/MPLS, 0% ATM or legacy Voice

– CISCO CRS-1 selected by Easynet, C&W and BT

• Significant additional capacity in 2006

BENEFITS: SCALABILITY, RELIABILITY AND COST

Leased Line

Network

ATM Network

Voice Network

SDH Network

DWDM Network

Fibre Optic Network

Broadband & POTS Line

Broadband & POTS Line

Corporate VPN Leased Line

Corporate VPN Leased Line

MSAN

TelecomsSwitch

DSLAM

Fibre Optic Network

DWDM Network

IP / MPLS Network

TRADITIONAL ARCHITECTURE

21CN ARCHITECTURE

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OUR NETWORKEXCHANGE COVERAGE

• Major metropolitan areas, including: London, M4 Corridor, Bristol, Watford/ Luton/Hemel, Milton Keynes, Birmingham, Coventry, Leicester, Nottingham, Stoke, Sheffield, Manchester, Liverpool, Leeds, Newcastle/Sunderland, Edinburgh, Glasgow

• 232 live exchanges, with access to c20% of U.K. homes

• Currently rolling out nationwide

– 750 exchanges, c50% of U.K. by December 2006

– 1,200 exchanges, c70% of U.K. homes, by December 2007

Easynet Core Network POPsDistance (Km)

Planned Exchanges

510152025

Planned exchanges by December 2006

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OUR NETWORKEXCHANGE COVERAGE

Pene

trat

ion

of U

.K. h

omes

100%

80%

60%

40%

20%

0%0 3,0002,5002,0001,5001,000500

December 2006

December2007

CUMULATIVE HOMES BY EXCHANGE

Current live exchanges

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WHAT IS LLU?INTRODUCTION

• The process implemented by regulators to unlock telecoms monopolies

• BT must rent the “last mile”(1) to competitors at a cost based price

• This was the only monopoly bottleneck in the telecommunications value chain

• LLU ensures effective competition

– Proven in Holland, Germany, France where LLU entrants have built significant market shares

– Finally working in the U.K. consumer sector, following regulatory intervention

• Technological change has enabled LLU providers to effectively offer voice, data and video over the last mile

• Opportunity for Sky to use Easynet’s LLU infrastructure to serve its customers

(1)The copper wire that goes into every home and business

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HISTORY OF LLU IN THE U.K.EASYNET HAS PIONEERED LLU

• LLU began in the U.K. in the late 1990’s– 40+ companies were interested, only Easynet remained

• Designed the unbundling process with BT

– IT interfaces, products

• Sole unbundler for several years, unbundled the first exchange in 2001

• Before summer of 2004, only economically attractive for business customers– The rental cost of copper was too expensive for consumer products

• BT lowered prices in the summer of 2004, prompting others to enter the market, and Easynet to enter the consumer market

• Finally, as part of its strategic review completed in 2005, Ofcom clearly defined LLU as thecritical regulatory process to ensure telecoms competition

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.

EASYNET Core Network

Other Networks

HOW DOES LLU WORK?INTRODUCTION

Last mile

Last mileBT

Exch

ange

Backhaul

Backhaul

Gateway

Gateway

Copper prices (SMPF residential)Old: £117 install, £4.42/month rental

New: £34.86 install, £1.30/month rental

BTEx

chan

ge

Copper prices (MPF business)Old: £265 install, £10.17/month rentalNew: £168 install, £6.67/month rental

Colocation charges within the exchangeOld: £28,000 average install (hosted)

New: £8,157 fixed price install (Co-mingling)

Backhaul price (distance 7km)Old: £11,000 install, £12,000 rental/100 MbpsNew: £5,500 install, £9,340 rental/100 Mbps

Gateway

Old: Pre-OFCOM Telecoms Strategic Review (TSR), New: Post June 2005 final publication of OFCOM TSR

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PROVIDING AN LLU SERVICEWHAT DOES IT TAKE TO DELIVER LLU?

• Order a colocation, backhaul and equipment, and get it all in the right place at the right time

• Take a customer order, get it through BT and make it work

– Overcome all the gotchas to get an order accepted by BT

– Deal with all the problems if it doesn’t work when BT connects it

• Have a world-class OSS IT system

– To ensure all of the above requires minimum human intervention

• Above all, vital to have the long term experience and have driven most of the problem resolutions

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ADVANTAGES OF NETWORK OWNERSHIP

• Availability and security of supply

• Flexibility to meet the evolving needs of our customers

• Ability to innovate and differentiate our product from the pack

• Long term price competitiveness of a fixed cost network

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RESIDENTIAL BASED BROADBAND PLATFORM

• Small ISP from which to build

• A track record of innovation in broadband

• Award winning consumer ISP experience

– Leading high-speed LLU broadband provider

Winner 2006 Winner 2005 Commendation for Innovation 2005

November 2004 U.K.’s fastest broadband service at 8Mb

October 2005 U.K.’s fastest broadband service at 24Mb

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VOIP COMING OF AGE• Growing from a small base

– Already used by 3.9 million US households and growing at 40% per annum(1)

• Growth drivers– User friendly software and use of peer-to-peer

– Critical mass of broadband penetration

– Large installed base of instant messaging users

– Quality and reliability issues receding

• Why is VOIP important?– Adds value to broadband access for the consumer

– Easynet’s network is VOIP ready today

– Efficiency advantages over legacy (ATM) networks for network operators

– Expected to be one the internet’s most widely used applications

• For the first time, a genuine substitute for fixed line telephony– No legacy voice revenues

– A differentiator for Sky

Vonage box

SKYPE User Interface

(1)Source: Information Week 14.03.06

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IPTV

• IPTV converts Television into IP allowing delivery over telephone lines

• Two potential components

– Broadcast (live) channels using multicast IP

– Video On Demand (VoD) using unicast IP

• Broadcast (multicast) IPTV requires dedicated bandwidth and guaranteed quality of service

– Easynet has one of the (few) national fibre networks

– Easynet today has carrier-class QoS

• Easynet network is IPTV ready

– No reworking required

– Able to guarantee delivery of video as uses MPLS technology

Multi-dwelling units (MDU’s)

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VIDEO ON DEMAND

• Video on demand enhancing the existing experience and giving the customer more control and personalisation

• See it as complimentary

– Where VOD has been widely deployed, live broadcast viewing still predominates

• Sky infrastructure allows

– Satellite for mass market high bandwidth broadcast TV e.g. HDTV, Multiroom

– Satellite PVR for timeshift TV and on-demand pre-loaded video

– Easynet fibre network for on-demand “long tail” niche content

• For operators, and therefore the consumer, the key to a profitable VOD service is getting the right balance of delivery mechanism/retail price/consumer immediacy

• Differentiator will be combining technology in a single offering for consumers

Alien vs. Predator

Illustrative example only

Other Alien / Predator movies

Massive local storage

Always-on broadband

Other Sci-Fi movies

High downstream bandwidth DTH satellite

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CORPORATE BUSINESS

• Provision of managed networks and hosting services to businesses across Europe

• A diversity of sectors

– Manufacturing, professional services, retail, logistics, construction, leisure, travel and public sector

• Working as a strategic partner with customers

– Identify customers key business drivers and deliver corporate data network services to meet their needs

• Target market is high end multi-site European businesses

– Offering differentiated products and services

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CORPORATE BUSINESSCASE STUDY

Customer U.K. high street shirtmaker and retailer

Solution Implemented Easynet MPLS network connecting 33 stores, two regional HQ’s and a busy mail-order division

Business benefit Enabled the company to provide customer service benefits, boost competitiveness, improve supply chain and streamline processes

Fundamental change Company had previously been using fax and phone as only means of communicating between stores and head office. The rapid growth of the business had outgrown these technologies.

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CORPORATE BUSINESSSOME OF OUR CUSTOMERS

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THE CORPORATE BUSINESSFINANCIAL OVERVIEW

• Rapid improvement in EBITDA as business grows

• Cash flow positive going forward

-100

2002 2005

-50

0

50

100

150

200

Revenue CAGR: 18%

Revenue

EBITDA

92

150

-23-38

-6

13

£m

illio

ns

EBIT

Note: 2005 Proforma numbers

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WHAT DOES EASYNET BRING?

• LLU capability

– One of the largest national fibre optic networks in the U.K.

– 21 century network architecture three years ahead of the competition

– Most experienced LLU operator in the U.K.

– Experienced management team and people

– No ATM or voice legacy

• Also a cash generative corporate business

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INNOVATION IN CONTENT DISTRIBUTIONSTEPHEN NUTTALL

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SETTING THE PACESKY BY BROADBAND

• Launched January 2006

• Choice of almost 300 films from Sky Movies currently, will grow to 1,500 titles in licence to Sky Movies

• Already over 1,000 Sky Sports clips and highlights on demand including FA Premier League and UEFA Champions League

• Over 140,000 total registrations to Sky by broadband in first 6 weeks

– Over 125,000 to Sky Movies

– Over 110,000 to Sky Sports

– 10% of households have created multiple accounts for different family members

• Will expand service during 2006 with addition of more films, entertainment content and live sport

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SETTING THE PACESKY BY MOBILE

• Launched January 2006

• Brings customers Sky Sports, Sky News, Sky One and Sky Movies

– Content includes stories, live scores, video clips

– Ability to place a bet using Sky Bet account

– Soon: Sky Guide listing and remote recording on Sky+

– Works on 2.5G and 3G phones, soon 100 handsets supported

• Over 8,000 registrations to Sky by mobile beginning to build

– Marketing will begin once Remote recording of Sky+ launches

(1)Includes FAPL highlights from Vodafone, Sky Sports News and interviews, and Gillette Soccer Saturday live

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SETTING THE PACESKY MOBILE TV

• Launched November 2005

• Retailed jointly by Sky and Vodafone

• Available via Sky by mobile and also the Vodafone live portal

– Service was free until end January

– Now in regular model: first month free, £5/month recurring subscription per mix thereafter (including all associated data charges)

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DEMAND FOR SKY MOBILE TVVIDEO STREAMING USAGE

May 05 Jun 05 Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06

Big Brother Ashes

Mobile TV Launch

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DEMAND FOR SKY MOBILE TV

• After a month, tens of thousands of paying customers, of whom two thirds have taken both Sky mixes

• Four Sky channels account for over 50% of viewing and typically take 4 of 5 top places in viewing statistics – no one else can replicate this offering

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AVERAGE WEEKLY VIEWING FIGURES

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DEMAND FOR SKY MOBILE TV THE WHALE EFFECT

Whale in the Thames

AVERAGE WEEKLY VIEWING FIGURES

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INNOVATION IN CONTENTCONCLUSION

• Large customer franchise

• Already launched world-class services and will continue to innovate

• Extends our existing entertainment experience

• In a world of fast changing customer needs, wouldn’t you choose Sky?

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CONCLUSIONANDREW GRIFFITH

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CUSTOMERS

SUCCESS FACTORS

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CONCLUSION

• Broadband and integrated whole home solutions represent a real opportunity for growth

• Will deliver more customers, greater loyalty and profitable revenues

• Success will be built on Sky’s core strengths: Brand, Customers, Innovation and Content

• Easynet provides the network to meet those needs in an economically efficient way

– World-class 21 CN infrastructure

– Technical expertise with pioneering and innovative capabilities in LLU

– Strong and experienced management team

• Disciplined approach to creating shareholder value

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QUESTIONS AND ANSWERS