BT 1999 Annual Report Download - page 29

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FINANCIAL REVIEW
28
The group’s ongoing turnover is analysed as follows:
1999 1998 1997
£m £m £m
)))%00511111110111
Inland calls 5,178 4,924 4,874
Exchange lines 3,337 3,180 3,033
International calls 1,501 1,553 1,809
Mobile communications 1,400 1,089 949
Private circuits 1,165 1,149 1,124
Customer premises
equipment supply 870 896 914
Receipts from UK operators 645 496 319
Yellow Pages and other
directories 491 466 438
Other UK sales and
services 1,770 1,332 994
Non-UK operations 596 555 481
00011!!!00511111110111
Group turnover 16,953 15,640 14,935
Share of ventures’
turnover 1,270 399 86
00011!!!00511111110111
Total turnover 18,223 16,039 15,021
00011!!!00511111110111
In the 1999 financial year, a significant increase in calls
to mobile phones and the increased use of the Internet
were the main factors behind an increase in inland calls
over BT’s fixed network, particularly in the second half of
the year. The strong inland call volume growth of 9% was
partially offset by the price reduction effect, resulting in
total call turnover increasing by 5.2% in the year to £5,178
million. In the 1998 financial year, inland call volume growth
of 7% was largely offset by the price reduction effect,
resulting in total call turnover increasing by 1% in the year.
Fixed network to mobile calls and inbound services,
including 0800 numbers, were the main areas of the strong
volume growth in the 1998 financial year.
Price reductions had an impact on turnover from inland
calls made over the fixed network for the fifth year
in succession. Reductions in Freefone and Lo-call prices
charged to service providers and lower national and fixed
network to mobile call prices were the main reductions
affecting the 1999 financial year. The combined effect of the
price changes totalled over £160 million in the 1999
financial year, which was equivalent to a 3% reduction in call
prices following falls of 6% and 7% in the previous two years.
Turnover from the fixed-network lines grew by 4.9% in the
1999 financial year to £3,337 million after increasing by 4.8%
in the 1998 financial year. The increased turnover was the
combined result of the growth in business lines and rental
price increases. The number of business lines grew by 6.1%
in the 1999 financial year and by 5.0% in the 1998 financial
year, with ISDN services being the main driver behind this
growth. The numbers of residential lines declined slightly
For its operations as a whole, BT expects the competitive
pressure to persist and it will continue to defend its market
share vigorously and fairly.
The strength of the UK economy is an important determinant
of BT’s business volumes and the gross domestic product
grew by 0.6% in the year ended 31 March 1999, compared
with 2.9% and 3.0% in the previous two years.
Turnover
Total turnover in the 1999 financial year of £18,223 million
includes BT’s proportionate share of its ongoing ventures’
turnover of £1,270 million. This total turnover grew by
13.6% in the 1999 financial year after growing by 6.8% in the
1998 financial year compared with the 1997 financial year.
For ease of comparison, both the 1998 and 1997 financial
years exclude BT’s share of MCI’s turnover while it was
BT’s associate of £1,372 million and £2,358 million,
respectively. BT’s new ventures in Europe and Asia Pacific
accounted for around a third of these increases in turnover
in both years.
Group turnover, excluding the ventures, grew by 8.4% to
£16,953 million in the 1999 financial year after growing by
4.7% in the 1998 financial year compared with the 1997
financial year. The strong growth in demand for the group’s
products and services of approximately 12% in the 1999
financial year and approximately 10% in the 1998 financial
year was partially offset by the effect of price reductions
which averaged approximately 3% across the business in
the 1999 financial year, compared with approximately 5% in
the 1998 financial year. Both mobile and fixed-network calls
in the UK made strong contributions to the group’s
activities in the 1999 financial year, as a result of the
significant growth in BT Cellnet’s mobile customer base
and increased Internet usage.
13,900
14,470
15,021
16,039
18,223
Total turnover (£m)
YEARS ENDED 31 MARCH
95 96 97 98 99