THUS Group plc Strategy and Vision © Copyright THUS Group plc 2004. All rights reserved

THUS Group plc

Strategy and Vision

© Copyright THUS Group plc 2004. All rights reserved.


The Market

Business Focus

Our Strategy

Customer Focus

Demonstrating Success

Fiscal Performance

Making Solutions Simple

Agenda

Strategy and Vision

The Market


THUS Group plc


Quote

Our objective is to be the pre-eminent alternative telecommunications provider for business customers in the UK

The Market

William Allan Chief ExecutiveTHUS Group Plc


THUS operates in a £17.5b market

This market is currently growing at about 7% per annum vs. GDP growth of 3%

£M

The UK telecoms sector is growing

£15.8b£17.5b

£18.9b

£21.4b

Source: Datamonitor Market Model

The Market

0

5,000

10,000

15,000

20,000

25,000

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/8 2008/9 2009/10


Traditional High ICT

-0.9%

Primary Industries

-1.1%

Cyclical Industries

+0.6%

Traditional low ICT

+6.2%

High growth sectors have different drivers to low growth sectors

THUS is adaptable in its customer approach

Source: Gartner

Sectors that traditionally spend less on ICT are ‘catching-up’

The Market


Considerable growth in data at the expense of older products


Wide Area Ethernet 241.0%

LAN Extension 236.0%

Broadband 66.6%

Dedicated Hosting 44.2%

IPVPN 32.4%

ATM 20.5%

Indirect Voice 15.8%

Internet Leased Line 10.8%

Frame Relay 10.4%

Web Hosting 9.9%

Contact Centre 9.2%

-1.6% >2Mbps Leased Lines

-4.9% Direct Voice

-6.1% <2Mbps Leased Lines

-6.7% NTS

-10.8% Domain Names

-13.0% Internet Dial-Up

Internet 21.5%

Hosting 14.4%

Voice 3.4%

Data 76.1%

The Market


Total Market 04/05£17.7bn

THUS Target Market(25% of total market)

We are aligned with our target market

Current THUS Share

Our Focus 2004/5

THUS UK Market Share• 1.5% 2001/2002• 1.7% 2002/2003• 2.0% 2003/2004


The Market


Radar of Technology

THUS has an environmental field of vision

Solutions outside our main focus are provided through our partners

WLL Broadband

GPRS

3GSDSL

VDSL

WLAN

Ethernet

BlueTooth

Broadband Satellite

4G

SoftswitchDWDM

Grid Computing

Web ServicesComplex Content Apps

VoIP

Multimedia Messaging

MCommerce

Analogue Shutdown

Biometrics

Wireless Web

Digital Identification

Digital Authorisation

Video Messaging

THUS Primary Focus

MONTHS24 - 18 18 - 12 12 - 18 18 - 24 24+3 - 1212 - 324+

PaDSL

The environment is one of significant change ahead

The Market


Our customer engagement model has been simplified

Sales

Direct Sales Force

SME Direct Sales Force

Channel Partners

Our Strategy


THUS Group plc


Our core strategy remains unchanged

Our Strategy



Our Strategy



Our Strategy

Customer Focus


THUS Group plc


We are focused on delivering quality services

Customer Focus


CUSTOMER

ACCOUNTMANAGEMENT

SERVICEMANAGEMENT

GrowthStrategy

RequirementsEvolution

ACCOUNTRELATIONSHIP

SERVICEDELIVERY

SLAQuality

ChangeEscalation

TEAMWORK

AlertsTrends

PlansSchedules

Providing the services you need

Customer Focus



THUS Group plc


56% Utilisation



• Our network costs are driven by our customer acquisition

• Supported through a pay-as-you-grow network model


Consistent quality is our aim

Dedicated Services: Customer-Reported fault reports per 100 direct customer lines per quarter

Latest data October to December 2003

Quality of Service Processes - ISO 9001 qualified

We constantly utilise external measurement to support and ensure our quality

And we are consistent ….


THUS Network Quality of Service


Achievements are realised with our customers



Providing integrated solutions


Fiscal Performance


THUS Group plc


£ Millions

1 EBITDA FY 02 excl. £3m restructuring costs.

2 Cash flow before financing and returns on investments and servicing of finance.

Financial stability

turnover ebitda1

capex cash flow before financing costs2

Fiscal Performance


THUS achieved its first quarterly free cash flow positive position in Q3 03/04

On trajectory to operating profit positive H2 FY 05

Europe’s first cash flow positive altnet?

years

time elapsed

cash flow

ebit/pbt/pat

EBITDA

EBITDA+VE

Q3 free cash flow

+VE

Q4 profit+VE

ROCE >WACC

not to scale

00 01 02 03 04 05 06 07 08 09

00 01 02 03 04 05 06 07 08 09

Fiscal Performance



THUS Group plc


Network

Understanding what we sell

Access

Internet

Internet

HostingHosting

Intelligence

Intelligence

Touch

Touch

Support

Support

Network

Access



Single Network Fabric

Traditional Voice

Mobile Networks

Video

Broadcast

Corporate Networks

Access Networks

Legacy DataNetworks

Telecoms Nirvana



It is about making the journey simple


THUS Group plc

Strategy and Vision



ExtrasStrategy and Vision


Network Length: 6100km

Pop's: Over 100

Metropolitan Area Networks: 15

Network Capacity: 10Gb to 1,600Gb

Network Operations Centre: Glasgow

Full Back Up Centre: Livingston

Launch: 1994

Launch of Demon: 1992

Flotation: 1999

Demerger from ScottishPower: 2002

Outgoing Voice Minutes (direct connect custs): 580mn

Incoming Non-geographic Minutes: 640mn

Broadband Customers: 25,000

Employees: 1858

Offices 16

Key Facts

Source: Annual Report May 2003

Extras

Documents

THUS Group plc Strategy and Vision © Copyright THUS Group plc 2004. All rights reserved