Issue of new Ordinary Shares

31 March 2010

Alternative Networks plc ("Alternative Networks" or the "Company")

Issue of new Ordinary Shares

Subscription of shares by the EBT

Following the passing of the resolutions at the General Meeting of the Company held on 29 March 2010, the Company announces that the EBT has today subscribed for 2,000,000 new ordinary shares (the "EBT New Ordinary Shares") at the nominal value of 0.125p per share. These shares have been issued pursuant to the VCP, details of which can be found in the Company's announcement dated 24 February 2010 and in the circular to shareholders dated 12 March 2010 which can be accessed on the Company's website www.alternativenetworks.com.

Immediately following the subscription (and the issue of the LTIP New Ordinary Shares below), the EBT will be interested in a total of 3,915,200 Ordinary Shares representing approximately 8.3 per cent. of the issued share capital of the Company.

Issue of shares pursuant to the LTIP

In addition, the Company today announces that it has permitted the participants of the Company's existing LTIP to convert nil-cost options into ordinary shares in the Company, such shares being forfeitable to the extent that performance conditions pursuant to the LTIP are not met at 25 April 2010, the end of the performance period.

The nil-cost options will be converted into ordinary shares today (the "LTIP New Ordinary Shares"). To the extent to which the performance conditions are not met, the participants have agreed that the shares will be transferred either (i) to the Company pursuant to an off-market buyback (authority for which will be required through a shareholder vote at a general meeting) and/or (ii) to the EBT with the consent of the Panel and/or (iii) to such other person as the Company may nominate.

The participants of the LTIP have agreed that, before the end of the performance period and prior to any of the transfers above in respect of any forfeited shares, they will (i) waive their right to receive any dividend in respect of the shares; (ii) not dispose of the shares; and (iii) not exercise the voting rights attached to the shares.

The number of ordinary shares to be issued to the participants of the LTIP are set out below:

In addition, James Murray, Edward Spurrier, Ben Marnham and Jim Sewell will be interested in the EBT New Ordinary Shares in the following proportion:

The above interests in the EBT New Ordinary Shares are a forfeitable co-ownership interest in the applicable number of EBT New Ordinary Shares, granted in connection with the VCP Awards granted in February 2010.

Application will be made to the London Stock Exchange for the EBT New Ordinary Shares and the LTIP New Ordinary Shares to be admitted to trading on AIM. The EBT New Ordinary Shares and the LTIP New Ordinary Shares will rank pari passu with existing Ordinary Shares of the Company including the right to receive all dividends declared, made or paid after the date of Admission.

Grant of awards under the VCP

The following nil-cost options have been granted in connection with the VCP Awards granted in February 2010, subject to performance conditions. Under these options the maximum value that can be realised at vesting by each participant is £250,000.

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