The group provides telecommunication services, principally in the UK and essentially operates as a unitary business. Its main services and products are fixed voice and data calls, the provision of fixed exchange lines to homes and businesses, the provision of communication services 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. The continuing lines of business comprise two international businesses and two UK operating businesses, together with the group's Concert global venture. The two international businesses, which were formed in July 2000, are: BT Ignite responsible for broadband and internet networks; and BTopenworld covering the consumer and SME market for internet products. The two UK operating lines of business, which were formed in autumn 2000, are: BT Wholesale covering the UK fixed network; and BT Retail responsible for marketing UK fixed-network products. Two discontinued international businesses comprised mmO2 covering the group's interests in mobile communications and Yell, responsible for the classified directories business.

The turnover of each line of business is derived as follows:

• 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 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 and broadband internet access products.
• mmO2 mainly derived 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.
• Yell derived its turnover from selling advertising in its classified directories in the UK and in the US.

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 Chief Executive) 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 lines of business is given below for the years ended 31 March 2002 and 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 this form was made available to the senior management of the group with respect to accounting periods from 1 July 2000. During the 2002 financial year, the lines of business definitions have been refined and the comparatives for the 2001 financial year have been accordingly adjusted to show the business as if they had traded as separate units throughout the relevant comparative period. There is extensive trading between many of the business units and profitability is dependent on the transfer price levels. These intra-group trading arrangements have been subject to review and have changed in certain instances. Comparative figures have been restated for these and other changes and in certain instances have been determined using apportionments and allocations.

For the year ended 31 March 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 Chief Executive.

Because of the fundamental restructuring and the previous progressive reorganisation explained below, it has not been practicable to restate the segment information for the year ended 31 March 2000 onto the segment basis presented for the years ended 31 March 2002 and 31 March 2001 with the limited exceptions of mmO2 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 O2 UK (formerly BT Cellnet). Products and Solutions managed the group's outsourcing services.

	Turnover						Depreciation and amortisation £m	Operating profit (loss) of associates and joint ventures £m		Total operating profit (loss) £m
Year ended 31 March 2002	External £m		Internal £m		Group total £m
BT Retail	10,517		1,568		12,085		239	1		996
BT Wholesale	3,700		8,556		12,256		1,914	-		2,163
BT Ignite	3,684		792		4,476		2,831	(40	)	(2,723	)
BTopenworld	158		64		222		16	(7	)	(125	)
Concert	-		-		-		-	(1,123	)	(1,123	)
Other	58		315		373		345	(274	)	(677	)
Intra-group	-		(10,965	)	(10,965	)	-	-		-
Total continuing activities	18,117		330		18,447		5,345	(1,443	)	(1,489	)
mmO2	2,273		392		2,665		648	5		(461	)
Other	169		2		171		8	57		90
Intra-group	-		(724	)	(724	)	-	-		-
Total discontinued activities	2,442		(330	)	2,112		656	62		(371	)
Group totals	20,559		-		20,559		6,001	(1,381	)	(1,860	)

	Turnover						Depreciation and amortisation £m	Operating profit (loss) of associates and joint ventures £m		Total operating profit (loss) £m
Year ended 31 March 2001	External £m		Internal £m		Group total £m
BT Retail	10,657		1,406		12,063		185	-		888
BT Wholesale	3,005		8,723		11,728		1,738	-		2,538
BT Ignite	2,966		502		3,468		648	(126	)	(724	)
BTopenworld	64		76		140		35	(59	)	(292	)
Concert	-		-		-		-	(1	)	(1	)
Other	127		11		138		374	(345	)	47
Intra-group	-		(10,396	)	(10,396	)	-	-		-
Total continuing activities	16,819		322		17,141		2,980	(531	)	2,456
mmO2	2,865		523		3,388		3,416	(290	)	(3,416	)
Other	743		6		749		35	424		590
Intra-group	-		(851	)	(851	)	-	-		-
Total discontinued activities	3,608		(322	)	3,286		3,451	134		(2,826	)
Group totals	20,427		-		20,427		6,431	(397	)	(370	)

	Turnover						Depreciation and amortisation £m	Operating profit (loss) of associates and joint ventures £m		Total operating profit (loss) £m
Year ended 31 March 2000	External £m		Internal £m		Group total £m
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	-		(201	)
Intra-group	-		(1,004	)	(1,004	)	-	-		-
Total BT UK	17,130		93		17,223		2,492	(108	)	3,559
BT Worldwide	1,540		129		1,669		176	(335	)	(520	)
Other	45		10		55		173	43		133
Intra-group	-		(232	)	(232	)	-	-		-
Group totals	18,715		-		18,715		2,841	(400	)	3,172
The above includes the following results for discontinued activities:
mmO2	2,248		388		2,636		356	(231	)	(220	)
Other	628		5		633		18	44		249
Intra-group	-		(679	)	(679	)	-	-		-
Total discontinued	2,876		(286	)	2,590		374	(187	)	29

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 arm's length.

The following tables show the capital expenditure on plant, equipment and property, the net operating assets or liabilities and the net book value of associates and joint ventures by line of business for the years ended 31 March 2002 and 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).

Year ended 31 March 2002		Capital expenditure £m		Net operating assets (liabilities) £m		Associates and joint ventures £m
BT Retail		143		927		(3	)
BT Wholesale		1,974		12,133		1
BT Ignite		609		1,603		83
BTopenworld		10		(28	)	-
Concert		-		-		338
Other		364		(301	)	259
Total continuing activities		3,100		14,334		678
mmO2		807		-		-
Other		1		-		-
Total discontinued activities		808		-		-
Total		3,908		14,334		678
Year ended 31 March 2002		Capital expenditure £m		Net operating assets (liabilities) £m		Associates and joint ventures £m
BT Retail		157		1,114		-
BT Wholesale		2,273		12,511		-
BT Ignite		935		3,584		178
BTopenworld		10		(42	)	10
Concert		-		-		1,430
Other		482		1,065		1,001
Total continuing activities		3,857		18,232		2,619
mmO2		1,105		18,634		27
Other		24		710		1,510
Total discontinued activities		1,129		19,344		1,537
Total		4,986		37,576		4,156
Information about geographic areas:
		2002 £m		2001 £m		2000 £m
Turnover with external customers
Attributable to UK		16,703		15,924		14,468
Attributable to non-UK countriesa		1,414		895		1,415
Total continuing activitiesb		18,117		16,819		15,883
Attributable to UK		1,555		2,718		2,693
Attributable to non-UK countriesa		887		890		139
Total discontinued activities		2,442		3,608		2,832
Group turnover		20,559		20,427		18,715

^aTurnover 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.
^bThe group turnover from continuing activities as disclosed in the group profit and loss account includes intra-group trading with discontinued activities.

		2002 £m		2001 £m
Group fixed assets are located
UK		15,384		16,963
Europe, excluding the UK		1,275		3,476
Americas		683		2,555
Asia and Pacific		209		873
Total continuing activities		17,551		23,867
UK		-		9,204
Europe, excluding the UK		-		10,417
Americas		-		435
Asia and Pacific		-		1,286
Total discontinued activities		-		21,342
Total		17,551		45,209

Geographical segment analysis in accordance with the requirements of SSAP 25 is as follows:

		2002 £m		2001 £m		2000 £m
Total turnover on basis of origin
UK		16,428		15,580		15,094
Europe, excluding the UK		2,449		1,840		1,462
Americas		2,000		2,557		873
Asia and Pacific		608		769		557
Total continuing activitiesa		21,485		20,746		17,986
UK		1,635		2,920		2,881
Europe, excluding the UK		927		1,244		429
Americas		36		214		106
Asia and Pacific		559		4,542		501
Total discontinued activities		3,157		8,920		3,917
Total		24,642		29,666		21,903

^aThe total turnover from continuing activities as disclosed in the group profit and loss account includes intra-group trading with discontinued activities.

		2002 £m		2001 £m		2000 £m
Group turnover on basis of origin
UK		16,703		15,924		15,173
Europe, excluding the UK		1,113		507		252
Americas		147		154		277
Asia and Pacific		154		234		181
Total continuing activitiesa		18,117		16,819		15,883
UK		1,555		2,718		2,693
Europe, excluding the UK		851		676		33
Americas		36		214		106
Total discontinued activities		2,442		3,608		2,832
Total		20,559		20,427		18,715

^aThe group turnover from continuing activities as disclosed in the group profit and loss account includes intra-group trading with discontinued activities.

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.

		2002 £m		2001 £m		2000 £m
Group operating profit (loss)
UK		2,628		3,330		3,379
Europe, excluding the UK		(2,829	)	(252	)	(42	)
Americas		153		15		34
Asia and Pacific		2		(106	)	(15	)
Total continuing activities		(46	)	2,987		3,356
UK		4		156		202
Europe, excluding the UK		(429	)	(3,094	)	9
Americas		(6	)	(22	)	5
Asia and Pacific		(2	)	-		-
Total discontinued activities		(433	)	(2,960	)	216
Total		(479	)	27		3,572

		2002 £m		2001 £m		2000 £m
Share of operating results of associates and joint ventures, including goodwill amortisation - profits (losses)
UK		(17	)	(51	)	(126	)
Europe, excluding the UK		(240	)	(212	)	(95	)
Americas		(1,135	)	(66	)	43
Asia and Pacific		(51	)	(202	)	(35	)
Total continuing activities		(1,443	)	(531	)	(213	)
UK		5		19		8
Europe, excluding the UK		20		(259	)	(217	)
Asia and Pacific		37		374		22
Total discontinued activities		62		134		(187	)
Total		(1,381	)	(397	)	(400	)

		2002						2001
		Net operating assets £m		Associates and joint ventures £m		Total £m		Net operating assets £m		Associates and joint ventures £m		Total £m
UK		13,186		(2	)	13,184		15,033		19		15,052
Europe, excluding the UK		925		178		1,103		2,756		236		2,992
Americas		222		337		559		281		1,716		1,997
Asia and Pacific		1		165		166		162		648		810
Total continuing activities		14,334		678		15,012		18,232		2,619		20,851
UK		-		-		-		8,717		23		8,740
Europe, excluding the UK		-		-		-		10,122		232		10,354
Americas		-		-		-		502		-		502
Asia and Pacific		-		-		-		3		1,282		1,285
Total discontinued activities		-		-		-		19,344		1,537		20,881
Total		14,334		678		15,012		37,576		4,156		41,732

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).