BT 2002 Annual Report Download - page 10

Business review
BT Group Annual Report and Form 20-F 2002 9
&to use the strength of the BT brand to move into
broadband services for consumers; and also into related
markets, such as communications solutions and business
mobility services for major business customers; and
information and communications technology for SMEs; and
&all delivered by diverse, skilled and motivated people.
Restructuring
During the 2002 ®nancial year, which saw some of the
worst conditions in the telecoms, media and technology
(TMT) sector for many years, we completed a radical
restructuring, the aims of which were to enhance customer
service, create greater management focus and reduce debt.
The main features of the restructuring were:
&the UK's largest-ever rights issue;
&the demerger of the majority of BT's mobile businesses
to create two separate listed companies, BT Group plc and
mmO2 plc;
&the disposal of signi®cant non-core businesses and
assets;
&the unwind of Concert, BT's joint venture with AT&T;
&the establishment of customer-focused lines of
business; and
&the reduction of our net debt from £27.9 billion at
31 March 2001 to £13.7 billion at 31 March 2002.
Rights issue
On 10 May 2001, BT announced a three for ten rights issue
at 300 pence per share. This was well supported by
shareholders and closed, as planned, on 15 June 2001.
Some 1.98 billion new shares were issued to shareholders
who took up their rights, raising £5.9 billion, net of
expenses.
Demerger of mmO2
On 19 November 2001, we completed the demerger of
mmO2, comprising what were BT's wholly-owned mobile
assets in Europe: O2 UK (formerly known as BT Cellnet),
O2 Communications (Ireland) (formerly known as Esat
Digifone), Telfort Mobiel, Viag Interkom, Manx Telecom and
Genie.
BT and mmO2 have, through arm's length negotiations,
entered into a number of agreements to de®ne the
continuing relationship between the groups. These include:
&until November 2004, we will exclusively promote the
mobile products and services of O2 UK to the business
market in the UK;
&until 31 March 2003, we will not offer mobile products
and services to the consumer market in the UK solely under
the BT brand. We may, however, offer mobile products and
services under the BT brand if co-branded with the brands
of other mobile network operators, and may offer bundled
®xed and mobile products under the BT brand; and
&parts of mmO2 are able to use some of our trademarks
and brands, including the BT name and the half piper logo,
on a transitional basis until 31 March 2003.
Acquisitions and disposals
During the past three ®nancial years, BT made a number of
signi®cant acquisitions, including taking stakes in Japan
Telecom and J-Phone and control of Viag Interkom, Esat
Telecom and Esat Digifone. During the latter part of that
period, re¯ecting the change in the group's strategy, we
disposed of a number of businesses and assets, including
Yell, Japan Telecom, J-Phone and Airtel. This has enabled
us to focus on our core businesses and to reduce net debt.
We also transferred assets and businesses to Concert,
which was subsequently unwound (see ``Concert'' below).
Turnover summary
Years ended 31 March
2002
£m
2001
£m
a
2000
£m
a
Fixed-network calls 5,266 5,655 5,908
Exchange lines 3,926 3,674 3,526
Receipts from other operators 3,113 2,814 1,974
Private services 1,039 1,091 1,135
Solutions 1,661 1,074 915
Customer premises equipment supply 688 726 847
Other sales and services 2,754 2,107 1,820
Total continuing activities 18,447 17,141 16,125
Wireless products 2,262 2,760 2,170
Yellow Pages 169 743 629
Other sales and services 11 105 33
Intra-group (330) (322) (242)
Total discontinued activities 2,112 3,286 2,590
Group turnover 20,559 20,427 18,715
Share of associates and joint ventures' turnover 4,764 9,937 3,364
Trading between group and principal joint venture (681) (698) (176)
Total turnover 24,642 29,666 21,903
a
Figures for the 2000 and 2001 ®nancial years have been restated to conform with the method of classi®cation used in the 2002 ®nancial year.