Easynet Group Plc merger with ipsaris Limited

Easynet Group Plc merger with ipsaris Limited

2

ipsarisipsariseasyneteasynet

Creating a Creating a leading leading

broadband broadband service service

provider in the provider in the UK & FranceUK & France

3

The financial logic

The strategic logic

The merger of Easynet and ipsaris has compelling strategic and financial 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 Enlarged Group will have the capital to support Easynet’s broadband growth strategy at a time when capital is scarce.

4

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 Voting Interest(%)

EconomicInterest

(%)

Marconi 49.9% 71.9%

Easynet 44.6% 25.0%

BWB 3.4% 1.9%

Railtrack 2.1% 1.2%

Shareholder structure post-transaction

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%

5

The enlarged Easynet organisation

David Rowe

Neil Rafferty

Brian Mulligan Peter Hill Steve Rick Will Gardiner

Head office and financeUK business and carrier services

European business services

Network & operations UK and Europe

Chief Executive

Executive Chairman

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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

7

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

The business opportunity in the U.K. and France

Source: IDC

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£bn

2000 2001 2002 2003 2004

Market Size - UK SME

Data

Mobile

Fixed Voice

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2

4

6

8

10

12

£bn

2000 2001 2002 2003 2004

Market Size - France SME

Data

Mobile

Fixed Voice

• Total business retail market of £16bn by 2004

• SME is 64% of total market by 2004

• Paris - centric & high density per local exchange

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