Broadband Network Capacity Update

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Introduction Our biggest challenge over the last two years has been balancing the need to have a profitable and scalable product proposition whilst delivering good value to our customers. While we’ve been doing this, the use of broadband applications has exploded, yet the wholesale infrastructure that all ISPs work with has not scaled accordingly. In 2006 we saw increasing average usage, driven by faster speeds and more video and music downloads. We envisage that this growth in usage will continue throughout 2007, due to new technologies like Web 2.0 and TV on demand. When we design any broadband product we plan to provide an amount of network capacity per customer. That drives how much capacity we buy, which in turn drives our costs. To allow for the envisaged growth in usage, we intend to increase the amount of network capacity per customer. We believe that this extra scale will provide an excellent customer experience. New BT Central pipe on order We have now ordered an additional 622Mb/s BT Central pipe, which we expect to be available in March. We intend to activate two segments of this immediately; this means our total capacity will grow by 12.5%. Our estimated timescales are based on the lead times being met by both BT and our network equipment suppliers. A key issue we face at the moment which is affecting customers using USB modems on Sunday, Monday and Tuesday evenings is a shortage of sessions. This has been caused by an increase in session concurrency due to an increase in background traffic (caused by viruses) and an increase in the proportion of customers using routers. Adding additional capacity now will provide us with extra sessions at peak times and gives us further room for growth. We’re taking some short term steps to deal with this including introducing a network-based personal firewall for customers. The PlusNet Usergroup has been giving us some feedback on this. We are also looking at some alternative network options to give us some short-term increases in sessions ahead of our new BT Central pipe arriving. We will be inviting a group of customers to trial this alternate access network provided by BT in the next week or so. We will trial this with staff accounts first, then PUG members and then open the trial up to the wider customer base. It is likely that this will be open only to Pay As You Go customers and will not support static IP addressing. 2007 & 2008 May 2007 should see new BT Wholesale pricing which will give us the opportunity to review our product designs. We are planning our network strategy with BT which means we will be able to assure the quality and customer experience of our products. We will be providing more information to all customers by email and on our website when the proposed acquisition by BT completes during the coming weeks. Kind regards, Neil Armstrong Products Director PlusNet