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Financial review >> |
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The majority of BT
Wholesale’s turnover is derived from supplying network services to BT Retail.
Its external turnover is derived from receipts from other operators for
interconnect services.
Turnover from receipts from
other operators for interconnect charges increased by 39% in the 2000 financial
year and by 43% to £2,814 million in the 2001 financial year. This turnover
mainly comprises the income BT generates from other UK operators for passing
calls from one operator to another and for terminating calls on BT’s network.
In the 1999 and 2000 financial years, it also included receipts from
international operators for incoming international and transit calls which BT
received before this activity was transferred to Concert in early January 2000.
From that date, this turnover includes receipts from Concert for terminating
incoming calls into the UK and handling Concert’s UK multinational customer
domestic traffic. The increases in turnover, in the 2001 and 2000 financial
years, primarily reflect the growing market share of BT’s UK competitors,
particularly mobile phone operators, and the increasing level of traffic
flowing through and into BT from their networks. There has been a large
corresponding increase in the payments made by BT to these operators for
traffic passing to their networks. Although growth has been rapid, with volumes
growing at 39% for the 2001 financial year, and 38% for the 2000 financial
year, BT’s interconnect business does not provide the group with the same
overall level of margin as its UK retail business.
In the 2001 financial year,
BT Wholesale contributed an operating profit before exceptional items of £2,540
million on turnover of £11,493 million. Externally generated turnover amounted
to slightly over £3 billion for the year. BT Wholesale has the responsibility
for wholesale broadband products and the losses for this activity are included
in the results. Return on capital employed was 20%. |
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