BT 2010 Annual Report Download - page 45

REVIEW OF THE YEAR FINANCIAL REVIEW
43BT GROUP PLC ANNUAL REPORT & FORM 20-F
ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
Financial results
Group revenue
Revenue decreased by 2% to £20,859m in 2010 (2009: 3%
increase). Favourable foreign exchange movements and the impact
of acquisitions contributed £297m and £31m, respectively, to
revenue in 2010. Excluding these, adjusted revenue decreased by
4% to £20,911m in 2010.
Products and services revenue
2010 2009a2008a
£m £m £m
Managed solutions 6,581 6,390 5,293
Broadband and convergence 2,678 2,617 2,549
Calls and lines 6,293 6,862 7,404
Transit, conveyance,
interconnect, WLR,
global carrier and other
wholesale products 2,957 3,244 3,329
Other products and services 2,402 2,318 2,129
Adjusted revenue 20,911 21,431 20,704
Specific items (52) – –
Contract and financial review
charges – (41) –
Revenue 20,859 21,390 20,704
aRestated. See page 101.
Managed solutions
Managed solutions revenue, which comprises networked IT
services, MPLS and managed network services (MNS) increased by
3% to £6,581m in 2010. This was mainly due to an increase in MNS
revenue in BT Wholesale and growth in MPLS revenue in BT Global
Services, offset by a decline in networked IT services revenue,
reflecting the challenging economic conditions. In 2009 managed
solutions revenue increased by 21%, driven by growth in revenue
from networked IT services and MPLS.
Broadband and convergence
Broadband and convergence comprises consumer and wholesale
broadband, LLU, mobile and wi-fi services and other broadband
based products, such as BT Vision. Broadband and convergence
revenue increased by 2% to £2,678m in 2010 due to growth in
broadband revenue in BT Retail and BT Global Services and an
Movement in adjusted revenue
(£m)
2009 Foreign
exchange
Acquisitions Underlying
decrease
2010
20,000
20,200
20,400
20,600
20,800
21,000
21,200
21,400
21,600
21,800
21,431
297 848
31
20,911
increase in LLU revenue in Openreach. This was offset by a decline
in broadband revenue in BT Wholesale, reflecting the continuing
trend of CPs continuing to switch to LLU provided by Openreach.
Calls and lines
Calls and lines revenue comprises the revenue from the connection
and rental of exchange and ISDN data lines, associated call traffic
and also the provision of private circuits. Calls and lines revenue
decreased by 8% to £6,293m in 2010, compared with a decline of
7% in 2009. The decline in 2010 reflects the challenging market
conditions, particularly in the business sector.
Transit, conveyance, interconnect, WLR, global carrier and other
wholesale products
Revenue from UK transit, conveyance, interconnect circuits, WLR,
global carrier and other wholesale products decreased by 9% to
£2,957m in 2010, compared with a decrease of 3% in 2009,
primarily due to the impact of mobile termination rate reductions,
the continued decline in low margin transit volumes and lower
conveyance volumes.
Other products and services
Other products and services principally comprises BT Global
Services revenue from non UK global products and BT Retail
revenue from conferencing, directories, payphones and other select
services. Revenue from other products and services increased by
4% to £2,402m in 2010, compared with an increase of 9% in
2009.
Other operating income
Other operating income was £380m in 2010 an increase of 12%
(2009: 3% decrease). The increase in 2010 was principally due to
an increase in scrap and cable recoveries and settlements. The
decrease in 2009 was largely due to lower income from the sale of
intellectual property rights, licences, vehicles and other assets,
partially offset by higher income from the sale of scrap and cable
recovery.
Revenue by products and services
(£bn)
11% 12%
14%
30%
13%
31%
15%
32%
12%
30%
16%
10%
36%
12%
26%
2009 20102008
Managed
solutions
Broadband and
convergence
Calls and lines
Transit,
conveyance,
interconnect etc.
Other products
and services
0
5
10
15
20
25