BT 2001 Annual Report Download - page 35

¢nancial year. Over three-quarters of the increase in turnover in
the 2001 ¢nancial year was contributed by the three major
acquisitions and nearly half of the increase in turnover in the
2000 ¢nancial year was contributed by the BT Cellnet Lumina
and DX Communications businesses acquired in 1999.
Otherwise, the turnover increases in the 2001 and 2000 ¢nancial
years re£ected the 51% and 64% growth in BT Cellnet’s
customer-base in the two years, respectively, o¡set by the
e¡ect of reductions in mobile call prices. Nearly 3.8 million
new customers were connected to BT Cellnet’s network in the
2001 ¢nancial year, following the 2.9 million connected in the
2000 ¢nancial year, substantially due to the success of the
‘‘pre-paid’’ mobile phone introduced in the second half of the
1999 ¢nancial year. BT Cellnet had 11.2 million customer
connections at 31 March 2001, of which over two-thirds were
on a pre-paid basis.
BT Wireless incurred a total operating loss of »225
million before goodwill amortisation and exceptional items on
total turnover of »3,947 million in the 2001 ¢nancial year. The
results re£ect the start up losses of the Genie wireless portal
business which amounted to »138 million on turnover of
»13 million. The ¢gures directly re£ect the BT Wireless
business proposed to be demerged later in 2001. BT Wireless’
results overall were hit by acquisition costs associated with the
record customer growth in BT Cellnet and other operations.
Viag Interkom incurred an
operating loss of »41 million
before goodwill amortisation
and exceptional items, for
BT Wireless, on turnover of
»70 million from 20 February
2001, the date of acquisition.
The exceptional items
attributable to BT Wireless
include »2,800 million of the
Viag Interkom goodwill
impairment charge.
BT Ignite, BTopenworld and other
Turnover from the external sales of BT Ignite Solutions and
Syntegra, which provides outsourcing and systems integration
services, both in the UK and worldwide has grown by 17.4% in
the 2001 ¢nancial year to »1,074 million after growing by 23% in
the 2000 ¢nancial year. The reduction in the growth in turnover
in the 2001 ¢nancial year is attributable to the transfer of
activities to the Concert global venture in January 2000.
Turnover from BT’s other sales and services has grown by
17.6% in the 2001 ¢nancial year to »1,879 million after growing
by 5.7% in the 2000 ¢nancial year. The turnover in the 2001
¢nancial year included the ¢xed-network business of Telfort,
Esat and Viag Interkom since acquisition. Videoconferencing,
and broadcasting and other multimedia services, contributed
strongly to the growth in turnover. This category also included
sales by Concert Communications up to early January 2000
before its transfer to the new Concert joint venture.
BT Ignite’s turnover in the
2001 ¢nancial year was »3,861
million with an operating loss of
»380 million before goodwill
amortisation and exceptional
items. The main driver of
operating losses for BT Ignite is
from investments in BT’s new
value added business, amounting
to »358 million in the year.
These include »115 million in
the year for content hosting and
application service provision.
The operating losses generated by ¢xed operations consolidated
for ¢rst time in this ¢nancial year, including Esat, Telfort and
Viag Interkom, amounted to a total of »135 million.
BTopenworldincurredanoperatinglossof»296millionon
turnover of »212 million in the 2001 ¢nancial year. Its turnover is
derived principally from its UK and continental European
narrowband internet access products. Narrowband activities
contributed approximately 50% of the operating loss whilst our
broadband services make up around 40% re£ecting the start-up
nature of the businesses. It is our aim to achieve narrowband
EBITDA break-even by the end of the 2003 ¢nancial year.
The broadband business is expected to follow shortly afterwards.
To do this, we have already put in place various cost cutting
measures which include the reduction of headcount by 20%
following a recent reorganisation. We are also exiting loss making
legacy contracts and rationalising our numerous e-mail platforms.
Yell
BT’s Yellow Pages and other directory businesses include the
Yellow Book USA business acquired in August 1999. Turnover
of »754 million has grown by 17.4% in the 2001 ¢nancial year,
substantially due to this acquisition. Turnover grew by 31% in
the 2000 ¢nancial year, of which two-thirds is due to the
acquisition. Turnover in the UK business was broadly
unchanged in the 2001 ¢nancial year in contrast to the 2000
¢nancial year when the UK business grew by about 9%, partly
re£ecting the good growth in the economy.
Yell contributed an operating pro¢t of »210 million before
goodwill amortisation on turnover of »778 million. The results
include its US operations in its ¢rst full year.
BT Annual report and Form 20-F 35