2. Segmental analysis

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.

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

• BT Retail derives its turnover from the supply of exchange lines and from the calls made over these lines, the leasing of private circuits and other private services, the sale and rental of customer premises equipment to the group’s UK customers and other lines of business and from its narrowband and broadband internet access products.
• 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 Global Services (formerly 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 to end customers and through BT lines of business.

Segmented information on the lines of business is given below for the years ended 31 March 2003, 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).

There is extensive trading between the lines of business and profitability is dependent on the transfer price levels. These intra-group trading arrangements and operating assets have been subject to review and have changed in certain instances. In addition, the group moved management responsibility of BT Openworld to BT Retail. Comparative figures have been restated for these and other changes and in certain instances have been determined using apportionments and allocations.

									Operating profit (loss) of associates and joint ventures
			Turnover
							Depreciation and amortisation				Total operating profit (loss)
	External		Internal		Group total
Year ended 31 March 2003	£m		£m		£m		£m		£m		£m
BT Retail	11,333		1,968		13,301		210		(3	)	1,421
BT Wholesale	3,472		7,788		11,260		1,923		(1	)	1,923
BT Global Services	3,882		1,369		5,251		624		180		(266	)
Other	40		1		41		278		153		(177	)
Intra-group	–		(11,126	)	(11,126	)	–		–		–
Group totals	18,727		–		18,727		3,035		329		2,901
									Operating profit (loss) of associates and joint ventures
			Turnover
							Depreciation and amortisation				Total operating profit (loss)
					Group total
	External		Internal
Year ended 31 March 2002	£m		£m		£m		£m		£m		£m
BT Retail	10,724		2,087		12,811		255		(6	)	866
BT Wholesale	3,700		8,556		12,256		1,914		–		2,163
BT Global Services	3,635		837		4,472		2,828		144		(2,540	)
Concert	–		–		–		–		(1,123	)	(1,123	)
Other	58		12		70		348		(458	)	(855	)
Intra-group	–		(11,162	)	(11,162	)	–		–		–
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	)

									Operating profit (loss) of associates and joint ventures
			Turnover
							Depreciation and amortisation				Total operating profit (loss)
					Group total
	External		Internal
Year ended 31 March 2001	£m		£m		£m		£m		£m		£m
BT Retail	10,721		1,820		12,541		220		(59	)	595
BT Wholesale	3,005		8,723		11,728		1,738		–		2,538
BT Global Services	2,966		502		3,468		646		(72	)	(668	)
Concert	–		–		–		–		(1	)	(1	)
Other	127		11		138		376		(399	)	(8	)
Intra-group	–		(10,734	)	(10,734	)	–		–		–
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	)

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 2003 and 2002. 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).

			Net operating		Associates
	Capital		assets		and joint
	expenditure		(liabilities)		ventures
Year ended 31 March 2003	£m		£m		£m
BT Retail	115		(430	)	(8	)
BT Wholesale	1,652		12,041		–
BT Global Services	439		1,912		141
Other	239		217		25
Total	2,445		13,740		158
			Net operating		Associates
	Capital		assets		and joint
	expenditure		(liabilities)		ventures
Year ended 31 March 2002	£m		£m		£m
BT Retail	153		(215	)	(3	)
BT Wholesale	1,974		12,163		1
BT Global Services	609		1,907		320
Concert	–		–		338
Other	364		479		22
Total continuing activities	3,100		14,334		678
mmO2	807		–		–
Other	1		–		–
Total discontinued activities	808		–		–
Total	3,908		14,334		678

Information about geographic areas:
	2003		2002		2001
	£m		£m		£m
Turnover with external customers
Attributable to UK	17,536		16,703		15,924
Attributable to non-UK countriesa	1,191		1,414		895
Total continuing activitiesb	18,727		18,117		16,819
Attributable to UK	–		1,555		2,718
Attributable to non-UK countriesa	–		887		890
Total discontinued activities	–		2,442		3,608
Group turnover	18,727		20,559		20,427

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.

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

			2003		2002
			£m		£m
Group fixed assets are located
UK			14,785		15,384
Europe, excluding the UK			1,227		1,275
Americas			510		683
Asia and Pacific			139		209
Total			16,661		17,551
Geographical segment analysis in accordance with the requirements of SSAP 25 is as follows:
	2003		2002		2001
	£m		£m		£m
Total turnover on basis of origin
UK	17,544		16,428		15,580
Europe, excluding the UK	2,151		2,449		1,840
Americas	155		2,000		2,557
Asia and Pacific	332		608		769
Total continuing activitiesa	20,182		21,485		20,746
UK	–		1,635		2,920
Europe, excluding the UK	–		927		1,244
Americas	–		36		214
Asia and Pacific	–		559		4,542
Total discontinued activities	–		3,157		8,920
Total	20,182		24,642		29,666

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

	2003		2002		2001
	£m		£m		£m
Group turnover on basis of origin
UK	17,536		16,703		15,924
Europe, excluding the UK	978		1,113		507
Americas	153		147		154
Asia and Pacific	60		154		234
Total continuing activitiesa	18,727		18,117		16,819
UK	–		1,555		2,718
Europe, excluding the UK	–		851		676
Americas	–		36		214
Total discontinued activities	–		2,442		3,608
Total	18,727		20,559		20,427

a The 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.

	2003		2002		2001
	£m		£m		£m
Group operating profit (loss)
UK	3,220		2,628		3,330
Europe, excluding the UK	(627	)	(2,829	)	(252	)
Americas	(28	)	153		15
Asia and Pacific	7		2		(106	)
Total continuing activities	2,572		(46	)	2,987
UK	–		4		156
Europe, excluding the UK	–		(429	)	(3,094	)
Americas	–		(6	)	(22	)
Asia and Pacific	–		(2	)	–
Total discontinued activities	–		(433	)	(2,960	)
Total	2,572		(479	)	27
	2003		2002		2001
	£m		£m		£m
Share of operating results of associates and  joint ventures, including goodwill  amortisation – profits (losses)
UK	(2	)	(17	)	(51	)
Europe, excluding the UK	305		(240	)	(212	)
Americas	(1	)	(1,135	)	(66	)
Asia and Pacific	27		(51	)	(202	)
Total continuing activities	329		(1,443	)	(531	)
UK	–		5		19
Europe, excluding the UK	–		20		(259	)
Asia and Pacific	–		37		374
Total discontinued activities	–		62		134
Total	329		(1,381	)	(397	)

					2003						2002
	Net
	operating		Associates				Net		Associates
	assets		and joint				operating		and joint
	(liabilities)		ventures		Total		assets		ventures		Total
	£m		£m		£m		£m		£m		£m
Net operating  assets  (liabilities)
UK	12,196		(8	)	12,188		13,186		(2	)	13,184
Europe, excluding  the UK	1,652		76		1,728		925		178		1,103
Americas	(85	)	–		(85	)	222		337		559
Asia and Pacific	(23	)	90		67		1		165		166
Total	13,740		158		13,898		14,334		678		15,012

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).

<<Previous | Back to top | Next>>