BT 2002 Annual Report Download - page 12

Business review
BT Group Annual Report and Form 20-F 2002 11
approximately 35% by rental value of the estate, including
existing lease ends, over the contract term at no extra cost.
We have retained direct ownership of approximately
220 properties. A number of these were retained with a
view to obtaining better value through other means.
Concert
On 1 April 2002, following an announcement in October
2001, we completed the unwind of Concert, our
international joint venture with AT&T, which involved the
return of Concert's businesses, customer accounts and
networks to the two parent companies.
As a result of the unwind, we have largely taken back
into our ownership those parts of Concert originally
contributed by us to the joint venture, while AT&T has taken
back into its ownership those parts it originally contributed.
We have acquired substantially all of Concert's managed
services network infrastructure in Europe, Africa, the Middle
East and the Americas, and substantially all of the customer
and supplier contracts that we originally contributed to
Concert. Concert assets that have been returned to us are
now managed by BT Global Business, part of BT Ignite,
while Concert customers that have been returned to us are
now managed partly by BT Global Business and partly by
BT Retail.
Simultaneously with the completion of the termination
of the Concert joint venture, AT&T acquired our Canadian
joint venture, through which we held an indirect minority
shareholding in AT&T Canada.
Under the Canadian joint venture agreement, BT was
committed to participating in AT&T's future obligation to
acquire all publicly-traded shares of AT&T Canada. AT&T
has now taken full ownership of the joint venture and BT no
longer has any involvement in the joint venture, nor any
obligations in relation to AT&T Canada.
Lines of business
The following table sets out the group turnover for each of
our lines of business in the 2002 and 2001 ®nancial years.
Group turnover
2002 2001
Years ended 31 March £m £m
BT Retail 12,085 12,063
BT Wholesale 12,256 11,728
BT Ignite 4,476 3,468
BTopenworld 222 140
Other 373 138
Intra-group (10,965) (10,396)
Total continuing activities 18,447 17,141
mmO2 2,665 3,388
Yell 171 749
Intra-group (724) (851)
Total discontinued activities 2,112 3,286
Totals 20,559 20,427
BT Retail
Years ended, or as at, 31 March 2002 2001
Group turnover £12,085m £12,063m
Group operating pro®t £1,102m £888m
No. of employees ('000) 50.8 53.6
Note ± before goodwill amortisation and exceptional items
BT Retail is the UK's largest communications service
provider, by market share, to the residential and business
markets. It trades under one of the UK's leading brands Ð
BT Ð and is the prime channel to market for the other
businesses in the BT group.
BT Retail supplies business and residential customers
with a wide range of communication products and services,
including voice, data, internet and multimedia services.
It also offers a comprehensive range of managed and
packaged communications solutions.
BT Retail's strategy, which has customer satisfaction as
its cornerstone, aims simultaneously to achieve the goals of
reducing costs and improving customer satisfaction. During
the 2002 ®nancial year, BT Retail made signi®cant progress
in implementing its strategy with the aim of:
&minimising the decline in revenue from its traditional
core business;
&growing existing new-wave revenue and developing
fresh initiatives;
&establishing brand extension opportunities in adjacent
markets; and
&improving its ef®ciency.
Voice services
In the residential, ®xed-voice call market, BT Retail's share
remained stable over the year at 73%, having fallen from
79% in mid-1999 to 74% by mid-2000. Within the business
sector, there was a reduced level of market share loss, with
a market share of around 48%.
As at 31 March 2002, BT Retail had more than 28 million
customer lines (exchange line connections). Some eight
million of these were business lines and lines for other
service providers; the remainder were for residential
customers.