BT 2004 Annual Report Download - page 10

Group turnover by customer segment (%)
year ended 31 March 2004
Wholesale (UK and
global carrier)
Major corporate
22%
32%
14%
32%
Consumer
Business
Consumer includes the external turnover of BT Retail from
consumer customers.
Major corporate includes the external turnover of BT Retail
from major corporate customers, and the external turnover of
BT Global Services, excluding the global carrier
business.
Business includes the external turnover of BT Retail from SME
customers.
Wholesale includes the external turnover of BT Wholesale and
BT Global Services’ global carrier business.
Further analysis of group turnover by customer
segment and between new wave and traditional
turnover is provided in the Financial review.
Consumer customers
As at 31 March 2004, BT had approximately 19 million
UK consumer customers with more than 20 million
residential customer lines (exchange line connections).
In the 2004 financial year, consumer revenues declined
by 2% to £5,974 million.
Our strategy in the consumer market is to defend
traditional revenues and market share vigorously
through innovative service offerings backed by
innovative marketing and excellent quality of service,
at the same time as driving for new wave revenues,
particularly in the areas of ICT, broadband and
mobility.
Underlying 12 month rolling average revenue per
customer household (net of mobile termination
charges) was £268 in the 2004 financial year,
compared with £271 in the 2003 financial year.
In the consumer market, new wave revenues grew
by 135% from £95 million in the 2003 financial year to
£223 million in the 2004 financial year, driven
principally by broadband.
The number of UK consumer DSL (digital
subscriber line) lines grew by 132%.
Business customers
As at 31 March 2004, we had over one million
business customers worldwide, with more than nine
million exchange lines.
In the 2004 financial year, major corporate
revenues increased by 2% to £5,909 million. The
increase in new wave turnover of 21% to
£2,452 million was driven by ICT, broadband and by
mobility, not only in the UK but also globally.
Our strategy in the major corporate market is to drive
a continued migration from traditional voice-only
services to managed ICT solutions. This enables us to
build closer and more integrated relationships with our
customers, enabling them to manage their
communications spend more effectively and gain
competitive advantage in their markets.
In the SME market (companies with between one
and 500 employees), our strategy is to provide
business customers with tailored communications
products and services that enable them to manage
their business more simply and efficiently. Although we
increased the number of BT Business Plan customers,
the contraction of the fixed-call market and regulation-
driven price cuts in our telephony services reduced our
traditional turnover. This reduction was only partially
offset by robust and continued turnover growth in new
wave services. Overall, in the SME market during the
2004 financial year, revenues reduced by 4% to
£2,600 million.
Wholesale customers
In the 2004 financial year, turnover from our wholesale
activities totalled £4,002 million, a decline of 3%.
In the UK, external turnover from BT Wholesale
activities was £3,445 million in the 2004 financial
year, compared with £3,525 million in the 2003
financial year.
New wave revenues were £361 million, up 54% on
the 2003 financial year. This growth has been achieved
through broadband and the provision of tailored
managed services to UK wholesale customers.
In the coming year, our strategic emphasis for
growth will continue to move from the capital-intensive
products of our traditional portfolio to broadband, ICT
and mobility.
We aim to provide the right solution, be it
application, service or product, for our wholesale
customers in order that we can continue to build our
new wave revenues.
In our global carrier business, revenues were
£557 million in the 2004 financial year, down from
£585 million in the 2003 financial year. Our global
carrier business customers include other fixed-line
telecommunications operators, mobile operators and
selected internet service providers.
Report structure
For the purposes of this Business review,weare
reporting on each of our strategic priorities.
For financial reporting purposes, we continue to
report by line of business (see Financial review).
Other businesses
As at 31 March 2004, we held stakes in a number of
other businesses, including:
&stakes in three satellite entities – Eutelsat, Intelsat
and New Skies
&a 16.6% stake in LG Telecom, a mobile cellular
telephone operator in the Republic of Korea
&an 11.9% stake in StarHub, a fixed and mobile
communications operator and pay-TV operator in
Singapore.
9Operating and financial review BT Annual Report and Form 20-F 2004