BT 2001 Annual Report Download - page 99

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16. Acquisitions and disposals (continued)
(k) J-Phone
On 8 May 2000, the group acquired a 40% interest in a company, with Japan Telecom owning the other 60% interest, which holds
a 74% interest in J-Phone Communications Co Limited (JPC). JPC in turn acquired controlling interests, averaging 51%, in nine
regional Japanese mobile phone J-Phone companies. These J-Phone companies merged into three larger regional companies during
the year ended 31 March 2001. Japan Telecom also held a direct 18% interest, in the J-Phone companies.
During the year ended 31 March 2001, the group held an e¡ective 23% interest in J-Phone. The impact of the combined
J-Phone/Japan Telecom ownership structure, however, led the group to re£ect 63% of the J-Phone results at the turnover and
operating pro¢t levels and all items below including interest and taxation, in accordance with the requirements of FRS 9. In May
2001, the group agreed to sell this interest (see note 29).
(l) Japan Telecom
On 31 August 1999, the group completed its acquisition of a 30% interest, jointly with AT&T Corp, in Japan Telecom, a leading
Japanese telecommunications company. Japan Telecom is held through a BT subsidiary company, 66.7% BT owned and 33.3%
AT&T owned. The group has a 20% economic interest. AT&T’s economic interest is shown within the group’s minority interests.
Goodwill on this acquisition is being amortised over 20 years.
On 31 March 2001, the 30% interest in Japan Telecom had a market value equivalent to »1,607 million
(2000 ^ »3,398 million), compared with a carrying value of »1,282 million (2000 ^ »1,345 million). In April 2001, the group’s direct
interest in Japan Telecom was reduced to its 20% economic interest and in May 2001, the group agreed to sell this interest (see
note 29).
(m) AT&T Canada, Rogers Cantel Mobile Communications, SmarTone Mobile Communications and other investments
On 16 August 1999, the group acquired a 30% interest in an AT&T subsidiary undertaking which holds a 31% interest in AT&T
Canada Corporation, a ¢xed network telecommunications company operating in Canada. The resulting economic interest of 9.3%
cost »360 million. On 31 March 2001, the 9.3% interest in AT&T Canada had a market value equivalent to »267 million (2000 ^
»477 million), compared with a carrying value of »352 million (2000 ^ »345 million). From 1 April 2000, the group decided it no
longer exercised signi¢cant in£uence over this company and the investment was reclassi¢ed as an other investment.
On 16 August 1999, the group acquired jointly with AT&T an approximate 33% interest in Rogers Cantel Mobile
Communications Inc, a cellular mobile phone company operating in Canada. The resulting economic interest of approximately
17% cost »299 million. On 31 March 2001, the 17% interest in Rogers Cantel Mobile Communications Inc had a market value of
»191 million (2000 ^ »520 million), compared with a carrying value of »285 million (2000 ^ »298 million).
On 10 May 1999, the group acquired a 20% interest in SmarTone Mobile Communications Limited, a cellular mobile phone
company operating in Hong Kong. On 31 March 2001, the 20% interest in SmarTone Mobile Communications Limited had a
market value of »107 million (2000 ^ »277 million) compared with a carrying value of »243 million (2000 ^ »230 million).
Goodwill arising on the acquisition of Rogers Cantel and SmarTone is being amortised over 20 years.
(n) Maxis Communications and LG Telecom
On 9 October 1998, the group completed its acquisition of a 33.3% interest in Maxis Communications, a leading Malaysian
telecommunications company. On 14 October 1998, the group completed its acquisition of a 23.5% interest in LG Telecom, a major
Korean mobile telecommunications company. As stated in note 29, the group agreed in principle in May 2001 to sell its interest in
Maxis Communications.
(o) Airtel Movil
Following the clearance in 1998 by the European Commission of the alliance between the company, AirTouch and other investors
in Airtel Movil SA, a leading Spanish mobile telecommunications company, the group’s 15.8% investment in Airtel was
reclassi¢ed as a joint venture on 1 April 1998. Airtel is jointly controlled by the company as a consequence of the alliance
agreement. During the year ended 31 March 1999, the group acquired an additional 2% interest in Airtel for »55 million.
Goodwill on this acquisition is being amortised over 20 years. In May 2001, the group agreed to sell this interest (see note 29).
BT Annual report and Form 20-F 99