Easynet Group Plc merger with ipsaris Limited

Creating a leading broadband service provider in the UK & France

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The merger of Easynet and ipsaris has compelling strategic and financial logic

The strategic logic

Combining Easynet’s sales force, customer base, IP networking skills and proven sales led business model, with ipsaris’ network assets, engineering skills and IT systems creates a strong platform to deliver broadband to SME customers.

The financial logic

The Enlarged Group will have the capital to support Easynet’s broadband growth strategy at a time when capital is scarce.

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Rationale and Transaction highlights

 Rationale for Easynet – accelerates strategy – differentiation of product offering – brings c. £314m cash  Easynet to issue 82.9m shares for ipsaris  Pro forma market capitalisation of £475 million

(25 June 2001)

 Marconi has agreed to sell up to 11.6m shares at a minimum price of 430p by way of a strike price tender bookbuild  EGM approval 19 July 2001, merger completion and admission effective 26 July 2001

Shareholder structure post transaction Shareholder

Marconi

Voting Interest (%)

49.9% Easynet BWB Railtrack 44.6% 3.4% 2.1%

Economic Interest (%)

71.9% 25.0% 1.9% 1.2%

Note: Marconi will hold no more than 49.9% of the total voting shares.

In the event of full take up of the tender offer Marconi’s holding would fall to 61.4%

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The enlarged Easynet organisation

David Rowe

Executive Chairman

Neil Rafferty

Chief Executive

Brian Mulligan

UK business and carrier services

Peter Hill

European business services

Steve Rick

Network & operations UK and Europe

Will Gardiner

Head office and finance

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Our opportunity is broadband data services…

 SME customers want advanced data services  To date, access prices have been too high  While there are other technologies available to provide broadband: – Cable Passes only a small % of businesses built primarily for residential – WLL Not yet economically proven – Fibre Not economic for most SMEs  The DSL proposition

Cost



Speed



Availability

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The business opportunity in the U.K. and France

   UK business retail market reaches £17bn by 2004 SME is 60% of total market by 2004 Ovum estimates the managed bandwidth market to reach £3bn by 2004

Market Size - UK SME

12 10 8

£bn

6 4 2 0 2000 Data Mobile Fixed Voice 2001 2002 2003

Market Size - France SME

• • • 12 Total business retail market of £16bn by 2004 10 8 SME is 64% of total market by 2004 Paris - centric & high density per local exchange

£bn

6 4 2 0 2000 Data Mobile Fixed Voice 2001 2002 2003 2004 2004

Source: IDC

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