BT 2000 Annual Report Download - page 30

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Annual report and Form 20-F 29
domestic product grew by 2.9% in the 2000 ¢nancial year,
compared with 1.5% and 2.8% in the 1999 and 1998
¢nancial years, respectively.
Restructuring
BT announced in April 2000 that it was restructuring its
operations, separating the UK ¢xed-network business into
two divisions and forming four new global businesses to
operate and manage BT's broadband, internet, mobile and
directories businesses. This is explained in more detail in
the Business Review and in the section of this review on
segmented information on page 39. Since this reorganisation
will not be completed until later in the 2001 ¢nancial year,
full ¢nancial information is not yet available for these new
divisions and businesses. The discussion of our results
which follows therefore centres around the consideration of
BT's turnover and costs as a whole.
Turnover
Total turnover in the 2000 ¢nancial year of »21,903 million
includes BT's proportionate share of its ventures' turnover
of »3,364 million before adjusting for trading between the
Concert joint venture and the BT group. This total turnover
grew by 20.2% in the 2000 ¢nancial year after growing by
13.6% in the 1999 ¢nancial year compared with the total
turnover from on-going activities in the 1998 ¢nancial year.
The 1998 ¢nancial year also included BT's share of MCI's
turnover, while it was BT's associate, of »1,372 million.
BT's acquisitions of businesses and interests in new
ventures in North America, Europe and Asia Paci¢c,
including Concert from January 2000, accounted for around a
half of the increase in total turnover in the 2000 ¢nancial
year and a third of the increase in the 1999 ¢nancial year.
Group turnover, excluding the ventures, grew by
10.4% to »18,715 million in the 2000 ¢nancial year after
growing by 8.4% in the 1999 ¢nancial year compared with
the 1998 ¢nancial year.
Acquisitions in the 1999 and
2000 ¢nancial years
contributed about 25% of
the growth in group
turnover in the 2000
¢nancial year. The strong
growth in demand for the
group's products and
services of approximately
11% in the 2000 ¢nancial
year and approximately 12%
in the 1999 ¢nancial year
was partially o¡set by the
e¡ect of price reductions which averaged approximately
3% across the business in both the 1999 and 2000 ¢nancial
years. Both mobile calls and interconnect receipts in the
UK made strong contributions to the growth in group
turnover in the 2000 ¢nancial year, as a result of the
signi¢cant growth in BT Cellnet's mobile customer base
and increased mobile usage. In the 1999 ¢nancial year, the
increase in mobile and ¢xed-network calls contributed to
the growth in group turnover.
The group's ongoing turnover is analysed as follows:
2000
£m
1999(a)
£m
1998(a)
£m
Fixed-network calls 5,908 6,026 5,788
Exchange lines 3,526 3,351 3,190
Mobile communications 2,170 1,400 1,089
Receipts from other
operators 1,974 1,417 1,249
Private services 1,135 1,140 1,131
Customer premises
equipment supply 847 870 896
Yellow Pages and other
directories 642 491 466
Other sales and services 2,513 2,258 1,831
Group turnover 18,715 16,953 15,640
Share of ventures' turnover 3,364 1,270 399
Trading between group
and principal joint venture (176) ± ±
Total turnover 21,903 18,223 16,039
(a) Figures for the 1998 and 1999 ®nancial years have been restated
to conform with the method of classi®cation used in the 2000
®nancial year.
Turnover from ¢xed-network calls declined by 2.0% to
»5,908 million in the 2000 ¢nancial year after growing by
4.1% in the 1999 ¢nancial year compared with the 1998
¢nancial year. Fixed-network calls comprise all calls by
customers made from ¢xed lines in the UK, including
outbound international calls. In the 2000 ¢nancial year, call
volume growth was more than o¡set by the e¡ect of
signi¢cant price reductions in contrast to the previous year
where the price reductions were outweighed by the e¡ect of
strong volume growth.
Price reductions had an impact on turnover from ¢xed-
network calls for all the years under review. In the 2000
¢nancial year, the principal reduction was the 25% cut in
¢xed to mobile call prices from the end of April 1999 as
required by the CC. Other reductions included enhanced
discounts and lower Freefone and Lo-call prices charged to
other service providers. In the 1999 ¢nancial year, the main
reductions related to lower prices charged to service
providers and lower national and ¢xed to mobile call