BT 2011 Annual Report Download - page 50

47BT GROUP PLC ANNUAL REPORT & FORM 20-F 2011
FINANCIAL REVIEW
FINANCIAL REVIEW FINANCIAL PERFORMANCE
Year ended 31 March 2010 Year ended 31 March 2009
Before Before
specific items Specific items Total specific items Specific items Total
£m £m £m £m £m £m
20,911 (52) 20,859 21,431 (41) 21,390
378 2 380 352 (13) 339
(15,650) (427) (16,077) (16,545) (1,993) (18,538)
5,639 (477) 5,162 5,238 (2,047) 3,191
(3,039) – (3,039) (2,890) – (2,890)
2,600 (477) 2,123 2,348 (2,047) 301
(890) (268) (1,158) (933) 313 (620)
25 29 54 39 36 75
– (12) (12) – – –
1,735 (728) 1,007 1,454 (1,698) (244)
(398) 420 22 (361) 414 53
1,337 (308) 1,029 1,093 (1,284) (191)
Our products and services are sold separately or as part of solutions
whereby they work together as a unified offering. An analysis of
revenue by major product and service category is set out below:
2011 2010 2009
£m £m £m
Products and services
ICT and managed networks 6,632 6,574 6,382
Broadband and convergence 2,767 2,677 2,618
Calls and lines 5,595 6,225 6,799
Transit 1,518 1,758 2,003
Conveyance, interconnect
circuits, WLR, global carrier
and other wholesale 1,471 1,451 1,506
Other products and services 2,093 2,226 2,123
Revenue 20,076 20,911 21,431
Descriptions of products and services provided by individual lines of
business is included in Our lines of business on pages 23 to 35.
ICT and managed networks
In 2011 ICT and managed networks revenue increased by 1%
(2010: 3% increase). This growth was mainly due to a continuation
of the trends from 2010 with an increase in MNS revenue in BT
Wholesale and growth in networked IT services revenue in BT
Global Services.
Broadband and convergence
In 2011 broadband and convergence revenue increased by 3%
(2010: 2% increase) due to the continued growth in broadband
revenue in BT Retail and the increase in LLU revenue in Openreach.
This was offset by a decline in broadband revenue in BT Wholesale,
reflecting the trend of CPs continuing to switch to LLU provided by
Openreach and due to BT Wholesale securing volumes under long
term MNS contracts.
Calls and lines
In 2011 calls and lines revenue decreased by 10% (2010: 8%
decrease). The continuing decline reflects the challenging market
conditions, particularly in the business sector, and the migration
from fixed-line calls to broadband, data and IP services.
Transit
In 2011 transit revenue decreased by 14% (2010: 12%). The
decrease in both years is due to the impact of regulatory mobile
termination rate reductions and the continued decline in low
margin transit volumes.
Conveyance, interconnect circuits, WLR, global carrier and other
wholesale products
In 2011 revenue from conveyance, interconnect circuits, WLR,
global carrier and other wholesale products was broadly flat (2010:
4% decrease).
Other products and services
Other products and services revenue principally comprises BT
Global Services revenue from non UK global products and revenue
from BT Retail’s Enterprises division including BT Conferencing, BT
Directories and BT Redcare & Payphones. In 2011 revenue from
other products and services decreased by 6% (2010: 5% decrease).
Other operating income
Other operating income was £373m in 2011, broadly flat
compared with 2010 (2010: 7% increase). The increase in 2010
was principally due to an increase in the profit on sales of scrap and
cable recoveries due to increased copper market prices and supplier
settlements.
Transforming our cost base
In 2011 we have continued our programme of cost transformation
and delivered cost savings of £1,087m, a 7% reduction (2010: 5%
reduction). The key drivers of this reduction have been vendor
negotiations and price reductions and the transformation and re-
engineering of our business activities, delivering improvements in the
efficiency and effectiveness across the group.
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