BT 2001 Annual Report Download - page 8

Business review
08 BT Annual report and Form 20-F
The review is divided into the
following sections:
8Introduction
&Our new structure
&Future BT strategy
10 Acquisitions
&Telfort
&Viag Interkom
&Esat Digifone
10 Disposals
&sunrise communications
&Japan Telecom and Airtel
&Maxis Communications
10 Lines of business
11 BT Retail
&Marketing and pricing
&Customer satisfaction
12 BT Wholesale
13 BT Wireless
&The UK
&Germany
&Republic of Ireland
&The Netherlands
&Genie
15 BT Ignite
&Value-added services
&European network
15 Yell
16 BTopenworld
16 Concert
17 Other
17 Research and development
18 Our people
19 Property
19 Regulation, competition and prices
&Regulation in the UK
&Competition
&Pricing regulation
&Non-UK regulation
&Other signi¢cant changes and issues
25 Relationship with HM Government
25 Legal proceedings
Please see cautionary statement regarding
forward-looking statements on page 143.
All customer numbers are given as at 31 March
2001, unless stated otherwise.
EBITDA = Earnings before interest, taxation,
depreciation and amortisation
Introduction
BT is one of Europe’s leading providers
of communications services, including:
&exchange lines and private circuits,
and ¢xed local, national and
international voice and data calls to
homes and businesses in the United
Kingdom (UK);
&wireless voice and data
communication services and
equipment for businesses and
individuals in the UK and
internationally;
&international new-wave products and
services, including internet, multimedia,
data transport and solutions;
&interconnection services for other
UK operators; and
&classi¢ed advertising directories in
the UK and United States (USA).
In the 12 months to 31 March 2001
(the 2001 ¢nancial year), 9% of BT’s
group revenues derived from activities
outside the UK, compared with around
5% in the previous ¢nancial year. This
excludes our proportionate share of the
revenues of our joint ventures and
associates.
The table on page 9 sets out a
summary of our turnover for our
products and services for the years
ended 31 March 1999, 2000 and 2001.
Our new structure
During the 2001 ¢nancial year, we began
a radical restructuring of our group. As a
result, some of our activities have been
grouped by market sector, rather than
geography, to form four businesses with
potential for high growth:
&BT Wireless ^ an international
mobile business, with particular
strengths in mobile voice, data and
next generation services;
&BT Ignite ^ an international, data-
centric solutions and broadband IP
business focused on European
corporate and wholesale markets;
&BTopenworld ^amass-market
internet business focused increasingly
on broadband services; and
&Yell ^ an international directories
business.
These new lines of business have been
operating since 1 July 2000.
In October 2000, management of the
UK communications services businesses
was split as follows:
&BT Retail ^ the UK’s leading
communications business and the
prime UK channel to market for our
other businesses; and
&BT Wholesale ^theproviderof
network services and solutions to
communications companies, network
operators and service providers,
including BT Retail, BT Wireless and
BT Ignite.
These six businesses operate
alongside Concert, our global joint
venture with AT&T, launched in
January 2000 which is a leading
communications provider for
multinational business customers,
international carriers and ISPs
worldwide.
In November 2000, we announced
details of a restructuring plan which was
drawn up following the identi¢cation of
potential bene¢ts which should follow
from a separation of the group into a
number of operating units with de¢ned
management accountability. We
recognised the merits of separate
£otations, following such restructuring,
to improve our focus on value generation
through the creation of distinct equity
for each quoted entity. Our plan was to
optimise the positioning of our
individual businesses within their
respective markets. We said we would
focus on Western Europe and Japan and
seek to £oat up to 25% of each of
BT Wireless and Yell, and a possible
separate £otation of BT Ignite would be
reviewed by the end of 2001. In addition,
we described proposals to create a new