BT 2006 Annual Report Download - page 79

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1. SEGMENTAL ANALYSIS
Primary reporting format – business segments
The group provides communications services which include networked IT services, local and international telecommunications
services, broadband and internet products and services. The group is organised into three primary business segments; BT Retail,
BT Wholesale and BT Global Services, each with differing risks, rewards and customer profiles. Hence these lines of business are
the group’s primary reporting segments. The revenue of each business segment is derived as follows:
BT Retail derives its revenue from the supply of exchange lines and from the calls made over these lines, the leasing of private
circuits and other private services. It also generates revenue from broadband, mobility, data, internet and multimedia services and
from providing managed and packaged communications solutions to customers.
BT Wholesale derives its revenue from providing network services and solutions to communications companies, including fixed and
mobile network operators, ISPs (internet service providers) and other service providers, including other BT lines of business, and
from carrying transit traffic between telecommunications operators.
BT Global Services mainly generates its revenue from the provision of networked IT services, outsourcing and systems integration
work to major corporates and from the fixed network operations of the group’s worldwide subsidiaries.
Other includes the group’s corporate and internal property, vehicle fleet and IT operations.
Openreach was launched on 21 January 2006. We will have completed the separation, configuration and implementation of the
financial and operating systems to facilitate the separate reporting of Openreach by the first quarter of the 2007 financial year.
This is in accordance with the timetable specified by the Undertakings. Therefore as Openreach is not a discrete segment at
31 March 2006 it is not presented as a separate business segment.
There is extensive trading between BT’s lines of business and the line of business profitability is dependent on the transfer price
levels. For regulated products and services those transfer prices are market based whilst for other products and services the transfer
prices are agreed between the relevant lines of business. These intra-group trading arrangements are subject to periodic review.
BT Retail BT Wholesale BT Global Services Other Intra-group Total
Year ended 31 March 2006 £m £m £m £m £m £m
Revenue
External revenue 8,119 4,226 7,151 18 – 19,514
Internal revenue 333 5,006 1,481 – (6,820) –
Total revenue 8,452 9,232 8,632 18 (6,820) 19,514
BT Retail BT Wholesale BT Global Services Other Intra-group Total
Year ended 31 March 2005 £m £m £m £m £m £m
Revenue
External revenue 8,430 3,820 6,154 25 – 18,429
Internal revenue 268 5,275 1,334 – (6,877) –
Total revenue 8,698 9,095 7,488 25 (6,877) 18,429
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements BT Group plc Annual Report and Form 20-F 2006 77