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back
to Consolidated financial statements>>
back to notes contents>> |
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| 2.
Segmental analysis |
The
group provides telecommunication services, principally
in the UK and essentially operated as a unitary business
prior to 1 July 2000. Its main services and products are
fixed voice and data calls in the UK, the provision of
fixed exchange lines to homes and businesses, the supply
of mobile communication services and equipment to businesses
and individuals, the provision of communication services
in the UK to other operators, the provision of private
services to businesses and the supply of telecommunication
equipment for customers' premises.
In April 2000, the group announced a restructuring whereby
the group and its associates and joint ventures would
be managed in several separate lines of business comprising
four international businesses and two UK operating businesses,
together with the group’s Concert global venture.
The four international businesses, which were formed in
July 2000, are: BT Wireless covering the group’s
interests in mobile communications; BT Ignite responsible
for broadband and internet networks; BTopenworld covering
the consumer market for internet products around the world;
and Yell, responsible for the classified directories and
associated e-commerce businesses. The two UK operating
lines of business, which were formed in autumn 2000, are
a wholesale line of business covering the UK fixed network
and a retail line of business responsible for marketing
UK fixed-network products. In November 2000, the group
announced that it intended to set up a new company, provisionally
named NetCo, to operate the group’s UK fixed network.
NetCo, which will be formed principally from the UK wholesale
business and part of the UK retail business, is planned
to be set up during the course of the year ending 31 March
2002.
The turnover of each line of business is derived as follows:
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 |
BT Retail
derives its turnover from the supply of exchange
lines to the group’s UK customers and from
the calls they make over these lines, the leasing
of private circuits and other private services,
and the sale and rental of customer premises equipment.
|
|
BT Wholesale
derives its turnover from providing network services
to BT Retail and other BT lines of business, and
from interconnecting the group’s UK network
to other operators. |
|
BT Wireless
mainly derives its turnover from the calls made
and received by its customers using its mobile phones,
from subscription fees charged to its contract customers
and from handset equipment sales. |
|
BT Ignite
mainly generates its turnover from outsourcing and
systems integration work and from the fixed network
operations of the group’s European subsidiaries.
The business also derives revenues from providing
web hosting facilities. |
|
BTopenworld
mainly derives its turnover from its narrowband
internet access products, mainly by selling advertising.
|
|
Yell derives
its turnover from selling advertising in its classified
directories in the UK and in the US. |
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|
Prior
to the restructuring implemented during the year ended
31 March 2001, the group was managed as a unitary business
providing an integrated range of services. For the purposes
of exercising day-to-day managerial and budgetary control,
however, the business was divided internally into divisions
but these divisions were not self-standing businesses.
Control was exercised by comparing performance against
budgets agreed in advance. The group’s chief operating
decision maker (the CEO) reviewed the turnover and operating
results for each main division. The group’s capital
expenditure programmes were largely centrally driven and
were not necessarily linked to individual divisions. For
this reason it had been group policy not to allocate certain
assets to individual divisions, although depreciation
charges were allocated.
Segmented information on the new lines of business is
given below for the year ended 31 March 2001 as required
by the UK accounting standard SSAP 25 and the US accounting
standard SFAS No. 131 (SFAS 131).
Financial information in the group’s new form was
made available to the senior management of the group with
respect to accounting periods from 1 July 2000.
For the years ended 31 March 1999 and 2000, information
is provided as required by the US accounting standard,
SFAS 131, on disclosures about segments of an enterprise.
The information presented is required to be based on the
segmental operating results regularly reviewed by the
CEO.
Because of the fundamental restructuring and the previous
progressive reorganisation explained below, it has not
been practicable to restate the segment information for
the years ended 31 March 1999 and 2000 onto the segment
basis presented for the year ended 31 March 2001 with
the limited exceptions of BT Wireless and Yell.
Between September 1997 and July 2000, the group was organised
into two main divisions, BT UK and BT Worldwide, in order
to reflect the group’s two distinctive geographical
operating regions and customer groups. Substantially all
of the group’s operations were within the UK and,
of those, the majority were managed by BT UK. During the
year ended 31 March 2000 and progressively from 1 October
1998, BT UK was sub-divided into ten separate business
units, the principal five of which were Markets, Enterprises,
Networks and Systems, Mobility, and Products and Solutions.
Markets was the division providing the customer facing
links for the group’s fixed network services and
Enterprises managed the Yellow Pages classified directory
business and the group’s wholesale interconnect
business with other operators. Networks and Systems provided
the UK fixed network as a platform for these services.
Mobility provided the group’s UK mobile communication
services, principally via BT Cellnet. Products and Solutions
managed the group’s outsourcing services.
Prior to 30 September 1998, the Consumer Division within
BT UK provided fixed network telecommunication services
for residential customers, principally the provision of
exchange lines to customers’ homes and calls to
and from those homes. The Business Division provided fixed
network services to businesses and organisations other
than multinational companies, principally the provision
of exchange lines, private services and calls to and from
their places of business and customer premises equipment.
The Networks and Systems Division built, maintained and
operated the company’s fixed telecommunications
network in the UK. Mobile Communications provided the
group’s UK mobile communications services. Other
units within BT UK provided the group’s classified
advertising directories and outsourcing services.
BT Worldwide provided telecommunication service to multinational
companies, including those based in the UK, and international
incoming, outgoing and transit telecommunication services.
It was responsible for managing Concert Communications
and the group’s other non-UK operations, and investments
in non-UK joint ventures and associates.
The following information for the year ended 31 March
1999 set out below is based on the divisional organisation
of the group at 1 April 1998, described above. As already
noted, the BT UK organisation was changed progressively
from 1 October 1998 into a substantially different form.
Financial information in its then new form and set out
for the year ended 31 March 2000 was made available to
the senior management of the group with respect to accounting
periods from 1 April 1999. |
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| BT Retail |
10,657 |
1,154 |
|
11,811 |
|
185 |
|
– |
|
1,003 |
|
| BT Wholesale |
3,005 |
8,488 |
|
11,493 |
|
1,738 |
|
– |
|
2,540 |
|
| BT Ignite |
2,968 |
502 |
|
3,470 |
|
649 |
|
(124 |
) |
(672 |
) |
| BT Wireless |
2,873 |
535 |
|
3,408 |
|
3,416 |
|
(264 |
) |
(3,374 |
) |
| Concert |
– |
– |
|
– |
|
– |
|
(1 |
) |
(1 |
) |
| Yell |
768 |
6 |
|
774 |
|
35 |
|
2 |
|
188 |
|
| Btopenworld |
85 |
82 |
|
167 |
|
37 |
|
(69 |
) |
(296 |
) |
| Other |
71 |
302 |
|
373 |
|
371 |
|
59 |
|
276 |
|
| Eliminations |
– |
(11,069 |
) |
(11,069 |
) |
– |
|
– |
|
– |
|
|
| Group totals |
20,427 |
– |
|
20,427 |
|
6,431 |
|
(397 |
) |
(336 |
) |
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| The
following table shows the capital expenditure on plant,
equipment and property for the year ended 31 March 2001
and the net operating assets of the new lines of business
at 31 March 2001. Net operating assets comprise tangible
and intangible fixed assets, stocks, debtors, less creditors,
excluding loans and other borrowings, and provisions for
liabilities and charges, excluding deferred tax. |
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| BT Retail |
157 |
|
1,114 |
|
– |
|
| BT Wholesale |
2,273 |
|
12,511 |
|
– |
|
| BT Wireless |
1,105 |
|
18,634 |
|
27 |
|
| Ignite |
936 |
|
3,584 |
|
178 |
|
| Concert |
– |
|
– |
|
1,430 |
|
| Yell |
21 |
|
710 |
|
2 |
|
| BTopenworld |
25 |
|
(17 |
) |
12 |
|
| Other |
469 |
|
1,040 |
|
2,507 |
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| Total |
4,986 |
|
37,576 |
|
4,156 |
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| Markets |
11,636 |
8 |
|
11,644 |
|
67 |
|
(9 |
) |
2,564 |
|
| Enterprises |
3,114 |
328 |
|
3,442 |
|
100 |
|
(4 |
) |
835 |
|
| Networks & Systems |
3 |
– |
|
3 |
|
1,812 |
|
– |
|
4 |
|
| Mobility |
2,170 |
391 |
|
2,561 |
|
305 |
|
8 |
|
117 |
|
| Products and Solutions |
197 |
368 |
|
565 |
|
76 |
|
(103 |
) |
240 |
|
| Other |
10 |
2 |
|
12 |
|
132 |
|
– |
|
(175 |
) |
| Eliminations |
– |
(1,004 |
) |
(1,004 |
) |
– |
|
– |
|
– |
|
|
| Total BT UK |
17,130 |
93 |
|
17,223 |
|
2,492 |
|
(108 |
) |
3,585 |
|
| BT Worldwide |
1,540 |
129 |
|
1,669 |
|
176 |
|
(335 |
) |
(520 |
) |
| Other |
45 |
10 |
|
55 |
|
173 |
|
43 |
|
133 |
|
| Eliminations |
– |
(232 |
) |
(232 |
) |
– |
|
– |
|
– |
|
|
| Group totals |
18,715 |
– |
|
18,715 |
|
2,841 |
|
(400 |
) |
3,198 |
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|
| The above includes
the following information presented on the new lines
of business structure: |
| BT Wireless |
2,245 |
391 |
|
2,636 |
|
313 |
|
(243 |
) |
(170 |
) |
| Yell |
617 |
5 |
|
622 |
|
18 |
|
1 |
|
191 |
|
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| |
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| |
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| Business Division |
5,624 |
294 |
|
5,918 |
|
106 |
|
– |
|
1,535 |
|
| Consumer Division |
6,168 |
140 |
|
6,308 |
|
113 |
|
(7 |
) |
1,998 |
|
| Networks & Systems |
108 |
– |
|
108 |
|
1,716 |
|
(3 |
) |
96 |
|
| Mobile Communications |
1,400 |
312 |
|
1,712 |
|
195 |
|
6 |
|
189 |
|
| Other |
1,282 |
1,877 |
|
3,159 |
|
126 |
|
(38 |
) |
(93 |
) |
| Eliminations |
– |
(2,351 |
) |
(2,351 |
) |
– |
|
– |
|
– |
|
|
| Total BT UK |
14,582 |
272 |
|
14,854 |
|
2,256 |
|
(42 |
) |
3,725 |
|
| BT Worldwide |
2,361 |
984 |
|
3,345 |
|
145 |
|
(292 |
) |
(327 |
) |
| Other |
10 |
847 |
|
857 |
|
180 |
|
(8 |
) |
76 |
|
| Eliminations |
– |
(2,103 |
) |
(2,103 |
) |
– |
|
– |
|
– |
|
|
| Group totals |
16,953 |
– |
|
16,953 |
|
2,581 |
|
(342 |
) |
3,474 |
|
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| The above includes
the following information presented on the new lines
of business structure: |
| BT Wireless |
1,510 |
312 |
|
1,822 |
|
195 |
|
(152 |
) |
45 |
|
| Yell |
466 |
3 |
|
469 |
|
6 |
|
– |
|
177 |
|
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|
Transactions
between divisions are at prices set in accordance with
those agreed with Oftel where the services provided are
subject to regulation. Other transactions are at arms
length. Internal supplies of services from Networks &
Systems were accounted for by that division as negative
costs in 1999 and 2000.
Information about geographic areas: |
|
| Turnover with
external customers |
|
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|
|
|
|
| Attributable to
UK |
18,642 |
|
17,161 |
|
15,612 |
|
| Attributable to
non-UK countries (a) |
1,785 |
|
1,554 |
|
1,341 |
|
|
| Group turnover |
20,427 |
|
18,715 |
|
16,953 |
|
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| (a) |
Turnover
attributable to non UK countries comprises the external
turnover of group companies and branches operating
outside the UK, income from non UK operators for
calls terminating in or in transit through the UK
and turnover with non UK joint ventures and associates. |
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| Group fixed assets are located |
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| UK |
26,167 |
|
20,940 |
|
| Europe, excluding the UK |
13,893 |
|
3,935 |
|
| Americas |
2,990 |
|
2,549 |
|
| Asia and Pacific |
2,159 |
|
2,394 |
|
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| Total |
45,209 |
|
29,818 |
|
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| Geographical
segment analysis in accordance with the requirements of
SSAP 25 is as follows: |
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| Total turnover
on basis of origin |
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|
| UK |
18,500 |
|
17,975 |
|
16,485 |
|
| Europe, excluding the UK |
3,084 |
|
1,891 |
|
1,231 |
|
| Americas |
2,771 |
|
979 |
|
237 |
|
| Asia and Pacific |
5,311 |
|
1,058 |
|
270 |
|
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| Total |
29,666 |
|
21,903 |
|
18,223 |
|
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| Group turnover on basis
of origin |
|
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|
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|
| UK |
18,642 |
|
17,866 |
|
16,364 |
|
| Europe, excluding the UK |
1,183 |
|
285 |
|
240 |
|
| Americas |
368 |
|
383 |
|
237 |
|
| Asia and Pacific |
234 |
|
181 |
|
112 |
|
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| Total |
20,427 |
|
18,715 |
|
16,953 |
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| The
analysis of turnover by geographical area is stated on
the basis of origin. In an analysis of turnover by destination,
incoming and transit international calls by country of
origin and turnover with non-UK joint ventures and associates
would be treated differently but would not lead to a materially
different geographical analysis. See the "information
about geographic areas" above.
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| Group operating profit (loss) |
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|
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|
| UK |
3,520 |
|
3,621 |
|
3,858 |
|
| Europe, excluding the UK |
(3,346 |
) |
(42 |
) |
(31 |
) |
| Americas |
(7 |
) |
34 |
|
4 |
|
| Asia and Pacific |
(106 |
) |
(15 |
) |
(15 |
) |
|
| Total |
61 |
|
3,598 |
|
3,816 |
|
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| Share of operating
results of associates and joint ventures, including
goodwill amortisation – profits (losses) |
|
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|
| UK |
(32 |
) |
(118 |
) |
(13 |
) |
| Europe, excluding
the UK |
(471 |
) |
(312 |
) |
(307 |
) |
| Americas |
(66 |
) |
43 |
|
– |
|
| Asia and Pacific |
172 |
|
(13 |
) |
(22 |
) |
|
| Total |
(397 |
) |
(400 |
) |
(342 |
) |
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| |
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|
| UK |
23,750 |
|
42 |
|
23,792 |
|
16,428 |
|
17 |
|
16,445 |
|
| Europe, excluding the UK |
12,878 |
|
468 |
|
13,346 |
|
2,232 |
|
1,296 |
|
3,528 |
|
| Americas |
783 |
|
1,716 |
|
2,499 |
|
653 |
|
1,724 |
|
2,377 |
|
| Asia and Pacific |
165 |
|
1,930 |
|
2,095 |
|
156 |
|
2,188 |
|
2,344 |
|
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| Total |
37,576 |
|
4,156 |
|
41,732 |
|
19,469 |
|
5,225 |
|
24,694 |
|
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| Net
operating assets comprise tangible and intangible fixed
assets, stocks, debtors less creditors, excluding loans
and other borrowings, and provisions for liabilities and
charges, excluding deferred tax. |
|
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