Download Current Cost Financial Statements for 2011 including Openreach Undertakings

Current Cost Financial Statements for 2011
including Openreach Undertakings
Ofcom Statement on BT’s Current Cost Financial Statements 2010/11
Introduction
Relevant, reliable and timely regulatory financial information informs many of our decisions.
We require this information in order to monitor and enforce various obligations that are placed
on BT in markets where they are found to have significant market power (“SMP”) and as a
source of data for setting and monitoring charge controls. It is also an important tool for other
communications providers, because (amongst others) it provides assurance that BT is
complying with its cost-orientation and no undue discrimination obligations.
BT’s reporting obligations arise out of market reviews conducted by Ofcom and out of SMP
service Conditions OA1 to OA34 and Directions 1 to 6.
Under SMP services Condition OA6(c), BT is required to publish with the audited regulatory
financial statements (RFS) any written statement made by Ofcom and provided to BT
commenting on the data in, the notes to or the presentation of any or all of the RFS and/or the
Accounting Documents.
Current Cost Accounting – valuation of assets
Following a significant increase in the net replacement cost of assets in the 2009/10 RFS we
note that in 2010/11 a number of unrelated factors have resulted in a decrease in the
valuation of assets. In Section 4.1, BT describes how these values were derived and in
particular the assumptions and estimates used to calculate access network asset (mainly
copper, duct and 21CN equipment) values. They show a holding loss (decrease in value) of
approximately £1,200m, representing approximately 7.5% of the Mean Capital Employed in
Wholesale Markets.
Traditional Interface Symmetric Broadband Origination (TISBO) (above
45Mbit/s up to and including 155Mbit/s) Restatement
We note that in Section 4.1 BT has explained that in TISBO (above 45Mbit/s up to and
including 155Mbit/s) 2009/10 comparative figures have been restated to reflect a correction
in BT’s calculation of internal links volumes.
The RFS are produced by BT and follow the principles and methodologies as set out in BT’s
Primary and Secondary accounting documents. These documents are published alongside the
RFS. They have not been reviewed by Ofcom.
As a result we observe that this has reduced revenues and costs in the TISBO (above 45Mbit/s
up to and including 155Mbit/s) Market for 2009/10 by £21m and £9m respectively with a
consequent increase in the unit costs for impacted services.
Notwithstanding this, Ofcom believes that we can be helpful to users of the accounts by
drawing attention to several important aspects of BT’s 2010/11 RFS.
Maintaining the current reporting obligations
Reporting of Long Run Incremental Costs (LRIC), the Distributed Long Run
Incremental Costs (DLRIC) and the Distributed Stand Alone Costs (DSAC)
We believe it is important that the current reporting requirements remain appropriate and
therefore continue to discuss with BT how the RFS need to change to secure this. As in
previous years, we will identify and work with BT to improve the 2011/12 RFS, for example to
reflect our market review decisions and technological developments.
BT is required to publish these statements within four months of the financial year end (by 31
July). However, on 29 July 2011 BT issued a statement explaining that the publication of the
Regulatory Financial Statements (RFS) for 2010/11 would be delayed until September 2011.
This delay was caused by BT’s decision to review the methodology used to calculate the LRIC,
DLRIC, and DSACs published in the Current Cost Financial Statements. In Section 4.1, BT states
its view that its approach for calculating the LRIC, DLRIC and DSACs for 2010/11 is now such
that all cost categories are treated on a consistent basis. The comparative figures for the year
2009/10 have been restated by BT on the same basis as outlined in Section 4.1. These changes
in certain services have had a material impact on the estimated LRICs, DSACs and DLRICs.
BT advises that further detail is included in Sections 1.2 and 4.1 of the RFS, and in the LRIC
Model: Relationships and Parameters 2011.
A fundamental review of the reporting framework
In 2008/09 we announced that we would undertake a fundamental review of the regulatory
reporting framework to ensure it remains fit for purpose into the future, provides good quality
data and is an effective system for monitoring compliance. Due to changing priorities our work
was put on hold.
It is now our intention to restart this review this Autumn. We will review BT's regulatory
financial reporting, as well as consider publishing guidance on the methodology for assessing
cost orientation.
Ofcom
15 September 2011
Contents
Current Cost Financial Statements
Contents
Page
Current Cost Financial Statements
Page
Section 1 - Introduction to the Current Cost Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8 - Review of Other Wholesale Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 1.1 - Introduction: Regulation in the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 1.2 - Regulatory Financial Reporting Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 1.3 - Regulatory Financial Review (Annex 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 - Introduction to the Basis of Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2 - Other Aspects to the Basis of Preparation (Annex 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.1 - Financial Performance in Other Wholesale Markets (Annex 8) . . . . . . . . . . . . . . . . . . . . . .59
Section 8.2 - Review of Other Wholesale Markets (Annex 10 & 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Section 8.2.1 - Market Group Level Review (Annex 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Section 8.2.2 - Market Level Financial Review of Other Wholesale SMP Markets (Annex 14) . . . . .61
Section 8.3 - Call origination on fixed public narrowband networks (Annex 13) . . . . . . . . . . . . . . . . . . .67
Section 8.4 - Single transit on fixed public narrowband networks (Annex 13) . . . . . . . . . . . . . . . . . . . .69
Section 8.5 - Technical areas (Interconnect Circuits)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.6 - Fixed call termination (Annex 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
Section 8.7 - Wholesale trunk segments (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
Section 8.8 - Technical areas (Point of Handover)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
Section 8.9 - Wholesale Broadband Access: Market 1 (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Section 8.10 - Wholesale Broadband Access: Market 2 (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.11 - Wholesale Broadband Access 2010 (Annex 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
Section 5 - Summary of Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9 - Reconciliation Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 5.1 - Consolidated Performance Summary (Annex 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.1 - BT Reconciliation Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Section 9.1.1 - BT Reconciliation Statement 2011 (Annex 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Section 9.1.2 - BT Reconciliation Statement 2010 (Restated)(Annex 19) . . . . . . . . . . . . . . . . . . . . .85
Section 9.1.3 - BT Reconciliation Statement MCE (Annex 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 2 - Statement of Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.1 - Statement of Responsibility (Annex 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3 - Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.1 - Report of the Independent Auditors (Annex 23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4 - Basis of Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed . . . . . . . . . . . . . . . . . . . 22
Section 6.1 - Attribution of Wholesale Current Costs 2011 (Annex 5A) . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.1.1 - Notes on Wholesale sector costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.2 - Attribution of Wholesale Current Costs 2010 (Annex 5A)(Restated) . . . . . . . . . . . . . . . .
Section 6.3 - Attribution of Wholesale Current Cost Mean Capital Employed 2011 (Annex 6A) . . . . . .
Section 6.3.1 - Notes on Wholesale MCE sector costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.4 - Attribution of Wholesale Current Cost Mean Capital Employed 2010 (Annex 6A)
(Restated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
24
25
26
27
28
Section 7 - Review of Access Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7.1 - Financial Performance in Access Markets (Annex 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.2 - Access Markets Review (Annex 10 & 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.2.1 - Access Markets Group Level Review (Annex 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.2.2 - Access Market Level Financial Review (Annex 14) . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.3 - Wholesale analogue exchange line services (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.4 - Wholesale ISDN2 exchange line services (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.5 - Wholesale business ISDN30 exchange line services (Annex 12) . . . . . . . . . . . . . . . . . . . .
Section 7.6 - TISBO (up to and including 8Mbit/s)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.7 - TISBO (above 8Mbit/s up to and including 45Mbit/s)(Annex 11) . . . . . . . . . . . . . . . . . . .
Section 7.8 - TISBO (above 45Mbit/s up to and including 155Mbit/s)(Annex 11) . . . . . . . . . . . . . . . .
Section 7.9 - AISBO (up to and including 1Gbit/s)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 7.10 - Wholesale local access (Annex 11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
31
31
32
37
39
41
42
48
50
52
56
1
Section 10 - Openreach Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 10.1 - Openreach Income Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
Section 10.2 - Openreach Income Statement 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Section 10.3 - Openreach MCE Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 10.4 - Openreach MCE Statement 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Section 10.5 - Reconciliation of Openreach Income Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .92
Section 10.6 - Reconciliation of Openreach Income Statement 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .93
Section 10.7 - Openreach Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94
Appendix 1 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Appendix 1.1 - Network Activity Statements (Annex 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Appendix 1.1.1 - Network Activity Statement - Consolidated 2011 . . . . . . . . . . . . . . . . . . . . . . . . . .97
Appendix 1.1.2 - Network Activity Statement - Consolidated 2010 (Restated) . . . . . . . . . . . . . . . .100
Appendix 1.2 - Calculation of FAC based on component costs and usage factors (Annex 16) . . . . . . .103
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 . . . . . . . .103
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated) 110
Appendix 1.3 - BT Network Services Reconciliation (Annex 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
Appendix 1.3.1 - BT Network Services Reconciliation 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
Contents
Current Cost Financial Statements
Page
Appendix 1.3.2 - BT Network Services Reconciliation 2010 (Restated) . . . . . . . . . . . . . . . . . . . . . 119
Appendix 2 - Price Control Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Appendix 2.1 - Price Controls in Access and Other Wholesale Markets (Annex 24)(Unaudited) . . . . . 124
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
2
Section 1 - Introduction to the Current Cost Financial Statements
Section 1 - Introduction to the Current Cost Financial Statements
Section 1
Introduction to the Current Cost Financial Statements
3
Section 1 - Introduction to the Current Cost Financial Statements
Section 1.1
1.1 –- Introduction:
Section
Introduction: Regulation
Regulation in
in the
the UK
UK
Electronic communications regulation in the UK is conducted within a framework set out in various
European Union (EU) directives, regulations and recommendations.
Ofcom
Ofcom (the Office of Communications) was set up under the Office of Communications Act 2002 to
provide a single, seamless approach to regulating the entire communications market. Its principal
duties are to further the interests of citizens in relation to communications matters and to further the
interests of consumers in relevant markets, where appropriate by promoting competition. Ofcom
regulation takes the form of sets of conditions laid down under the Communications Act 2003
(Communications Act), and directions under these conditions. Some conditions apply to all providers of
electronic communications networks and services; others apply to individual providers, which Ofcom
has designated as universal service providers or having significant market power (SMP) in a particular
market.
Conditions applying to all providers
Although these general conditions are concerned mainly with consumer protection, they also include
requirements relating to general access and interconnection, standards, emergency planning, the
payment of administrative charges, the provision of information to Ofcom and numbering. A separate
condition regulates the provision of premium rate services. The Electronic Communications Code
applies to all communications providers authorised to carry out street works and similar activities for
network provision. It requires electronic communications providers with apparatus on or in the public
highway to make financial provision to cover any damage caused by work they carry out, and for the
removal of their networks in the event of liquidation or bankruptcy.
Significant Market Power (SMP) designations
Ofcom is also required by EU directives to review relevant markets regularly and determine whether any
communications provider has SMP in those markets.
Where Ofcom finds that a provider has SMP, it must impose appropriate remedies that may include
price controls. At 31 March 2011, as a result of previous market reviews, BT was deemed to have SMP
in a number of markets. These markets are listed in Section 1.2 - Regulatory Financial Reporting
Obligations.
Where a provider has SMP, the Communications Act enables Ofcom to impose one or more obligations
in relation to each market, including:
• Accounting separation - which requires the operator to maintain accounting systems such that
the financial results of each SMP market can be separately presented and that costs relating to
products and markets are allocated in a transparent and appropriate way. Accounting separation
is also used to ensure that there is no undue discrimination.
• Cost accounting – Wholesale cost accounting obligations apply where there is an obligation in
relation to price controls, cost orientation or cost recovery. Wholesale activities include products
and services sold to other communication providers such as the provision of network access, the
use of the network and the availability of various facilities. Obligations may include price
4
controls for specified SMP products, cost orientation of prices for SMP products and the
recovery of costs for the purpose of demonstrating transparency.
• Publication - The annual Current Cost Financial Statements satisfy the obligation relating to
publication of financial information for SMP markets. The publication of information relating to
SMP markets is intended to provide public assurance that BT has complied with its cost
accounting and accounting separation obligations. Ofcom also imposes certain audit
requirements in respect of the published Financial Statements.
On 15 September 2009, as a result of its review of the Fixed Narrowband Services Wholesale Market
and a review of the Network Charge Controls, Ofcom concluded that SMP status should be removed
from the Local-tandem conveyance and transit Market, and this is now part of Wholesale Residual. The
review also concluded that the Single transit Market is still subject to some SMP obligations, including
the obligation not to unduly discriminate. In assessing the level of financial reporting obligations, the
review concluded that for the year ended 31 March 2011, cost accounting obligations would be
removed but accounting separation obligations would remain.
Following Ofcom’s Wholesale Broadband Access Market Review in 2010, BT was found not to have
SMP or regulatory obligations in Wholesale Broadband Access Market 3. BT Wholesale continues to
have regulatory obligations in relation to the supply of WBA products in Markets 1 and 2 and is required
to report on an Equivalence of Input (EOI) basis in these markets.
Significant Market Power Charge controls
As a result of SMP designations, the charges BT can make for a number of wholesale services are subject
to regulatory controls.
On 22 May 2009, Ofcom concluded its Financial Framework Review and published the statement “A
new pricing framework for Openreach” which set price controls for the period 22 May 2009 to 31
March 2011. The price control applied to new connection, rental, cease and transfer charges as well as
Metallic Path Facilities (MPF) and Shared Metallic Path Facilities (SMPF) ancillary services and CoMingling services. All price changes for 2010/11 were implemented on 1 April 2010 in line with the
price control; the MPF and SMPF annual rental charges as well as the MPF new provide charge were
subsequently modified in October 2010 following the conclusion of the Carphone Warehouse Group’s
appeal to the Competition Appeal Tribunal against Ofcom’s Local Loop Unbundling (LLU) statement.
Ofcom is currently consulting on revised charge controls for LLU for the period ending 31 March 2014.
A final statement is expected in Quarter 3 2011/12.
On 2 July 2009, Ofcom published its final statement on the Leased Lines Charge Control (LLCC) with
regard to a new charge control framework for wholesale traditional interface and alternative interface
products and services. The statement covered the Partial Private Circuit (PPC) products provided by BT
Wholesale (referred to as "Traditional Interface/TI" products) and wholesale ethernet access and
backhaul services provided by Openreach (referred to as "Alternative Interface/AI" products by Ofcom).
The controls in the LLCC statement apply for the period 1 October 2009 to 30 September 2012.
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010. Ofcom also directed new lower prices for 2Mbit/s local end rentals.
These controls run from 1 October 2009 to 30 September 2012.
Section 1 - Introduction to the Current Cost Financial Statements
Ofcom published two statements setting the Wholesale Line Rental (WLR) Charge Controls on 26
October 2009 and 23 February 2010. These statements set out the charge controls for WLR analogue
services for the period 23 November 2009 to 31 March 2011. Given the change in market definition in
2009, Ofcom set a single charge control that applies only to a new core WLR product rather than setting
separate controls for residential and business lines. The cost orientation obligation was also removed
for service levels beyond the WLR Core rental product. All price changes for 2010/11 were
implemented on 1 April 2010 in line with the price controls. Ofcom is currently consulting on revised
charge controls for WLR for the period ending 31 March 2014. A final statement is expected in Quarter
3 2011/12.
On 20 August 2010, Ofcom published its market review statement for wholesale and retail ISDN30
services. In this, Ofcom concluded that Openreach has SMP in the provision of wholesale ISDN30
services. A number of general remedies were imposed in the market review, including the requirement
to supply services and the requirement to provide services on the basis of no undue discrimination.
Ofcom also concluded that the introduction of a price control for wholesale ISDN30 services was
appropriate.
Ofcom is currently consulting on the appropriate charge controls for ISDN30 for the period ending 31
March 2014. A final statement is expected in Quarter 3 2011/12.
Please refer to Appendix 2.1 for further details relating to charge controls.
BT’s Undertakings
In response to Ofcom’s 2005 strategic review of telecommunications, BT proposed a number of legally
binding Undertakings under the Enterprise Act 2002. These Undertakings, which included the creation
of Openreach, were accepted by Ofcom and came into force in September 2005. The Undertakings are
intended to deliver clarity and certainty to the UK telecommunications industry about the way BT will
provide ‘upstream’ regulated products to support effective and fair competition in related
‘downstream’ markets. This, in itself, should lead to a reduction in the need for regulation in those
competitive downstream markets over time.
The Undertakings also set up certain financial reporting requirements which BT has to comply with.
These reporting requirements have been described in Section 1.2 - Regulatory Financial Reporting
Obligations, Section 2.1 – Statement of Responsibility and the statements are given in Section 10 Openreach Information.
Next Generation Access regulation
In March 2009, following consultation, Ofcom published a policy statement setting out a regulatory
framework for Next Generation Access (NGA). This gave sufficient regulatory certainty for BT to proceed
with the initial phase of super-fast broadband roll out and BT will continue to work with Ofcom as these
plans develop.
In June 2009, the UK Government published its ‘Digital Britain’ report setting out the importance of the
digital economy to the nation’s economic future and how it will drive future industrial capability and
competitiveness. The report contained 78 separate recommendations, with the key areas being:
Universal Service Commitment and NGA. Prior to the May 2010 election, there were plans to create a
fund of £200m that would be available via competitive tender to bidders in order to deliver a universal
service commitment based on 2Mbit/s broadband connection.
5
Following the election, the new Government confirmed its commitment to improving Broadband but
placed more emphasis on achieving the highest possible speeds across the whole of what is known as
the “last third”, reducing focus on a simple 2Mbit/s for all commitment and more on super-fast NGA
type services. The “last third” are rural communities outside the likely reach of commercial super-fast
rollouts such as BT’s own investment in NGA that is programmed to reach 66% of the population by
2015.
The Government has allocated up to £530m to be spent by 2015 through its procurement authority
BDUK, monies that will be allocated to the Counties and Regions on a bid basis. This may be backed after
the next election by a further £300m to a total of £830m by 2017. The first BDUK investment
allocations, known as Wave 1, have been made to Cumbria, North Yorkshire, Herefordshire and
Highlands and Islands with an allocation also to Wales. Bids have started to appear and Openreach is
assisting Communications Providers on request to win funds and deliver extended coverage.
Section 1 - Introduction to the Current Cost Financial Statements
Section 1.2
1.2 –- Regulatory
Section
Regulatory Financial
Financial Reporting
Reporting Obligations
Obligations
Other Wholesale markets (including technical areas):
The prescribed form and content of the published Current Cost Financial Statements is reviewed
regularly by Ofcom, in the light of changes in the regulatory regime and the needs of stakeholders. The
relevant Ofcom documentation is listed below and together forms “the Final Statements and
Notifications” under the requirements of which the Current Cost Financial Statements for 2011 have
been prepared.
• “The Regulatory Financial Reporting Obligations on BT and Kingston Communications” issued
22 July 2004
• “Changes to BT’s Regulatory Financial Reporting Framework” of 31 August 2005
• “Changes to BT’s Regulatory Financial Reporting and Audit Requirements” issued 16 August
2006
• “Changes to BT’s Regulatory Financial Reporting and Audit Requirements” issued 30 May 2007
• “Changes to BT’s 2007/08 Regulatory Financial Statements” issued 26 June 2008
• “Changes to BT and KCOM’s Regulatory Financial Reporting – 2008/09 update” issued 15 June
2009
• “Changes to BT and KCOM’s regulatory and financial reporting 2009/10 update” issued 4 June
2010
• “Changes to BT and KCOM’s regulatory and financial reporting 2010/11 update” issued 2 June
2011
In addition to the information in the Current Cost Financial Statements, Ofcom also requires BT to
provide additional detailed information to enable Ofcom to regulate effectively and efficiently. This
additional information is not published by either BT or Ofcom nor is it subject to any independent
examination.
The markets in which BT has SMP and reporting obligations in the period covered by the Current Cost
Financial Statements for 2011 are listed below. These markets have been grouped by Ofcom as follows:
Wholesale Access markets:
•
•
•
•
•
•
•
•
Call origination on fixed public narrowband networks*
Single transit on fixed public narrowband networks
Technical areas (Interconnect Circuits)*
Fixed call termination*
Wholesale trunk segments*
Technical areas (Point of Handover)*
Wholesale Broadband Access (Market 1)*
Wholesale Broadband Access (Market 2)*
Wholesale markets which have both cost accounting and accounting separation requirements have
been marked with * in the list above. For these wholesale markets, the Current Cost Financial
Statements also include details of costs and charges for individual services within each market. The
remaining wholesale markets have accounting separation requirements only.
On 15 September 2009, as a result of its review of the Fixed Narrowband Services Wholesale Market
and a review of the Network Charge Controls, Ofcom concluded that SMP status should be removed
from the Local-tandem conveyance and transit Market, and this is now part of Wholesale Residual. The
review also concluded that the Single transit Market is still subject to some SMP obligations, including
the obligation not to unduly discriminate. In assessing the level of financial reporting obligations, the
review concluded that for the year ended 31 March 2011, cost accounting obligations would be
removed but accounting separation obligations would remain.
On 3 December 2010, as a result of its review of the Wholesale Broadband Access Market, Ofcom
concluded that BT did not have SMP or regulatory obligations in Wholesale Broadband Access Market
3. BT Wholesale continues to have regulatory obligations in relation to the supply of WBA products in
Markets 1 and 2 and is required to report on an Equivalence of Input (EOI) basis in these markets.
Openreach
The Current Cost Financial Statements for 2011 also include financial information to meet the
requirements set out in the Undertakings (section 5.31); specifically the need to disclose the results of
Openreach separately and to reconcile the results to the Openreach segmental information shown in BT
Group plc’s Annual Report effective from the 2007 financial year.
•
•
•
•
•
Wholesale analogue exchange line services*
Wholesale ISDN2 exchange line services*
Wholesale business ISDN30 exchange line services
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)*
Traditional interface symmetric broadband origination (above 8Mbit/s up to and including
45Mbit/s)*
• Traditional interface symmetric broadband origination (above 45Mbit/s up to and including
155Mbit/s)*
• Alternative interface symmetric broadband origination (up to and including 1Gbit)*
• Wholesale local access*
Cost orientation information
BT has an obligation to report cost orientation information in the Current Cost Financial Statements.
BT has reviewed the methodology used to calculate the Long Run Incremental Cost (LRIC), the
Distributed Long Run Incremental Cost (DLRIC) and the Distributed Stand Alone Cost (DSAC) of services
published in the Current Cost Financial Statements. The review determined that the LRIC, DLRIC and
DSAC for certain cost categories were not calculated in a manner that resulted in appropriate
relationships between LRIC, DLRIC and DSAC and their fully allocated costs (FAC), and that was
compatible with underlying principles for the calculation of DLRIC and DSAC.
6
Section 1 - Introduction to the Current Cost Financial Statements
The approach for calculating the LRIC, DLRIC and DSAC for 2010/11 is now consistent with that used
for all other cost categories and the results derived for LRIC, DLRIC, DSAC and FAC for the services
affected are now appropriately related and consistent with underlying principles.
The comparative figures for the year 2009/10 have been restated on the same basis as outlined in
Section 4.1. Further details of this change in methodology are given in the publication Long Run
Incremental Cost Model: Relationships and Parameters 2011.
7
Section 1 - Introduction to the Current Cost Financial Statements
Section 1.3
1.3 -- Regulatory
Regulatory Financial
Financial Review
Review (Annex
Section
(Annex 4)
4)
The Regulatory Financial Review is intended to assist the user’s understanding of the Current Cost
Financial Statements, and focuses on those matters that are relevant to the users of the information,
including accounting policies that are key to understanding performance.
The review explains the main factors that underlie each market or groups of markets; in particular those
that have changed or are expected to change in the future. The review includes explanations of new
products and services. This is to assist a user of the Current Cost Financial Statements in understanding
the dynamics of the products and services in each market, the main influences on financial performance
and how these interrelate.
These Regulatory Financial Reviews have been provided at the level of groupings of markets and then
by individual markets in Sections 7 and 8.
8
Section 2 - Statement of Responsibility
Section 2 - Statement of Responsibility
Section 2
Statement of Responsibility
9
Section 2 - Statement of Responsibility
Section 2.1
2.1 -- Statement
Statement of
Responsibility (Annex
Section
of Responsibility
(Annex 2)
2)
of Telecommunications, and undertakings in lieu of a reference under the Enterprise Act 2002”, issued
on the 22 September 2005.
British Telecommunications plc (BT) is required to prepare Current Cost Financial Statements in
accordance with the Final Statements and Notifications as described in Section 1.2.
The Undertakings require BT to present the financial results of Openreach, including the following:
Under the Financial Capital Maintenance (FCM) concept of Current Cost Accounting BT has revalued its
assets in 2011. The approach taken in the Current Cost Financial Statements has been described in
Section 4.1.
The Current Cost Financial Statements include comparative information for the year ended 31 March
2010 first published on 28 July 2010 subject to certain restatements and re-presentations detailed in
Section 4.1.
The Current Cost Financial Statements are prepared in accordance with the Primary Accounting
Documents and Secondary Accounting Documents (namely the Detailed Attribution Methods; the
Detailed Valuation Methodology; the Long Run Incremental Cost Model: Relationships and Parameters
and the Wholesale Catalogue). In so far as there is any inconsistency in the Primary and Secondary
Accounting Documents, BT ensures that the Current Cost Financial Statements are prepared in
accordance with the Primary Accounting Documents in the following order of priority:
•
•
•
•
•
the Regulatory Accounting Principles;
the Attribution Methods;
the Transfer Charging System;
the Accounting Policies; and
the Long Run Incremental Cost Methodology.
• Openreach financial information such as headline revenue, cost of sales (or gross margin),
SG&A, EBITDA, depreciation, operating profit and capital expenditure, revenues broken down
into the broad product groups that Openreach provides and further split between internal and
external sales, separately identified payments to other parts of BT for products that form inputs
to Openreach products (e.g. electronics); and
• Reconciliation of Openreach’s revenue and operating profit (and other such items as may be
agreed between BT and Ofcom) with information about Openreach shown in BT Group plc’s
Annual Report.
The Openreach Financial Statements have been presented in Section 10. These Statements include
comparative information for the year ended 31 March 2010.
The form, content and basis of preparation of the financial results of Openreach follow those used in
the preparation of the Current Cost Financial Statements of BT as described above, except where
differences are agreed with Ofcom.
BT confirms that the Openreach Financial Statements for the year ended 31 March 2011, which have
been prepared in accordance with the Primary Accounting Documents dated 15 September 2011,
comply with the requirements of the Undertakings dated 22 September 2005.
The Current Cost Financial Statements are reconciled to the BT Group plc’s Annual Report and that
reconciliation is demonstrated and explained.
BT confirms that the Current Cost Financial Statements for the year ended 31 March 2011 which are
prepared in accordance with the requirements of the Final Statements and Notifications have been
prepared in accordance with the Primary and Secondary Accounting Documents dated 15 September
2011.
BT confirms that the Current Cost Financial Statements for the year ended 31 March 2010 which are
prepared in accordance with the requirements of the Final Statements and Notifications have been
prepared in accordance with the Primary and Secondary Accounting Documents dated 28 July 2010
subject to certain restatements and re-presentations as detailed in Section 4.1.
BT confirms that the Detailed Attribution Methods, the Detailed Valuation Methodology, the Long Run
Incremental Cost Model: Relationships and Parameters and the Wholesale Catalogue all dated 15
September 2011 are appropriate to implement the principles contained in the Primary Accounting
Documents dated 15 September 2011, including the Transparency Principle.
Openreach
BT is also required in accordance with the Undertakings to separately present the financial results of
Openreach within BT’s Current Cost Financial Statements as explained in Sections 1.1 and 1.2. The
Undertakings are attached at Annex A of Part 2 of Ofcom’s “Final Statements on the Strategic Review
10
Warren Clements
Group Controller
15 September 2011
Section 3 - Audit Report
Section 3 - Audit Report
Section 3
Audit Report
11
Section 3 - Audit Report
Section 3.1 - Report of the Independent Auditors (Annex 23)
Report of the Independent Auditors to British Telecommunications plc and Ofcom issued in accordance with the Final Statement and Notification entitled “The regulatory financial
reporting obligations on BT and Kingston Communications” issued by Ofcom on 22 July 2004 as amended by the annual “Notifications” of changes to regulatory financial reporting
issued by Ofcom following consultation as set out below.
1. We have examined the Current Cost Financial Statements for 2011 (the “Financial Statements”)
which include information in respect of economic markets (the “Market Financial Statements”)
and Openreach (the “Openreach Information”).
2. The Market Financial Statements are prepared by British Telecommunications plc (the “Company”)
under the current cost convention in accordance with:
• the Final Statement and Notification entitled “The regulatory financial reporting obligations on
BT and Kingston Communications” issued by Ofcom on 22 July 2004 as amended by the Final
Statement and Notification entitled “Changes to BT’s regulatory financial reporting framework”
issued by Ofcom on 31 August 2005, and the Explanatory Statements and Notifications entitled
“Changes to BT’s regulatory financial reporting and audit requirements” issued by Ofcom on 16
August 2006, “Changes to BT’s regulatory financial reporting and audit requirements” issued by
Ofcom on 30 May 2007, “ Changes to BT’s 2007/08 regulatory financial statements” issued by
Ofcom on 26 June 2008, “Changes to BT and KCOM’s regulatory financial reporting 2008/09
update” issued by Ofcom on 15 June 2009, “Changes to BT and KCOM’s regulatory and financial
reporting 2009/10 update” issued by Ofcom on 4 June 2010 and “Changes to BT and KCOM’s
regulatory financial reporting 2010/11 update” issued by Ofcom on 2 June 2011 (together the
“Final Statements and Notifications”);
• the Primary Accounting Documents;
• the Secondary Accounting Documents, namely the Detailed Attribution Methods, the Detailed
Valuation Methodology and the Wholesale Catalogue; and
• In respect of comparative information for the year ended 31 March 2010, the treatment of
holding gains and associated backlog depreciation on duct and associated structures as
described in section 4.1 on page 16.
3. The Openreach Information is prepared by the Company under the current cost convention in
accordance with:
• the undertakings given to Ofcom by the Company pursuant to the Enterprise Act 2002 on 22
September 2005 (the “Undertakings”);
• the Explanatory Statement and Notification entitled “Changes to BT’s regulatory financial
reporting obligations” issued by Ofcom on 30 May 2007 , “Changes to BT’s 2007/08 regulatory
financial statements” issued by Ofcom on 26 June 2008, “Changes to BT and KCOM’s regulatory
financial reporting 2008/9 update” issued by Ofcom on 15 June 2009, “Changes to BT and
KCOM’s regulatory and financial reporting 2009/10 update” issued by Ofcom on 4 June 2010
and “Changes to BT and KCOM’s regulatory financial reporting 2010/11 update” issued by
Ofcom on 2 June 2011 (together the “Explanatory Statement and Notifications”); and
• the Primary Accounting Documents.
4. The Market Financial Statements comprise the following statements for the year ended 31 March
2011 for the Markets and Technical Areas listed on page 6:
• The consolidated performance summary on page 21;
• The statements of Attribution of Wholesale Current Costs and Mean Capital Employed on pages
23, 25, 26 and 28;
• The statement of financial performance in Access Markets on page 30;
• The Market Summary statements for Access Markets on pages 37 to 57;
• The statement of financial performance in Other Wholesale Markets on page 59;
• The Market Summary statements for Other Wholesale Markets on pages 67 to 82; and
• the related notes set out in Sections 4, 7, 8 and 9 on pages 16 to 19, 31 to 36, 60 to 66 and 84
to 86, and Appendix 1 on pages 97 to 122, other than the LRIC Floors and LRIC ceilings.
5. The Openreach Information comprises the following information for the year ended 31 March
2011 on pages 88 to 93:
• The Openreach P&L Statement;
• The Openreach MCE Statement; and
• The Reconciliation of Openreach P&L.
6. The Market Financial Statements and The Openreach Information include comparative information
for the year ended 31 March 2010 first published on 28 July 2010 which have been restated and
re-presented as described in “Comparability of current and prior year results” on page 17. All
comparative information for the year ended 31 March 2010 is prepared by the Company to comply
with the Final Statements and Notifications, and in accordance with the Primary Accounting
Documents and the Secondary Documents dated 28 July 2010 as amended, where applicable, in
accordance with “Comparability of current and prior year results” on page 17.
Respective responsibilities of the Company and auditors
7. The Company is responsible for preparing and approving the Financial Statements, as described on
page 10. Our responsibilities, as independent auditors, are established in the United Kingdom by
the Final Statements and Notifications, the Undertakings, the Auditing Practices Board and our
profession's ethical guidance.
8. Our responsibility is to audit the Financial Statements in accordance with relevant legal and
regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. This report, including the opinion, has been prepared for and only for the
Company and Ofcom and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in writing.
9. We report our opinions as to whether:
12
Section 3 - Audit Report
11. We report our opinions as to whether the restated and re-presented Market Financial Statements
as a whole for the year ended 31 March 2010 are fairly presented in accordance with the Primary
Accounting Documents dated 28 July 2010 subject to the changes described in “Comparability of
current and prior year results” on page 17, and comply with the requirements of the Final
Statements and Notifications.
• the Market Financial Statements as a whole;
• each of the market group statements comprising the statement of financial performance in
Access Markets on page 30 and the statement of financial performance in Other Wholesale
Markets on page 59 (the “Market Group Statements”);
• each of the Market Summary Statements for the markets and technical areas listed below(the
“FPIA Markets”)
o Wholesale analogue exchange line services on page 37;
12. In addition, we report if, in our opinion, the “Introduction to accounts”, setting out the basis upon
which the Financial Statements have been prepared, is not consistent with the Financial
Statements, if the Company has not kept proper accounting records, if we have not received all the
information and explanations we require for our examination, or if information specified by the
Final Statements and Notifications is not disclosed.
o Wholesale business ISDN30 exchange line services on page 41;
o Traditional interface symmetric broadband origination (up to and including 8Mbit/s) on
page 42;
o Alternative interface symmetric broadband origination on page 52;
13. We read the other information presented with the Financial Statements and consider the
implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the Financial Statements. The other information comprises the Regulatory
Financial Review on page 8, the Access Markets Review on pages31 to 36, the Review of Other
Wholesale Markets on pages 60 to66 , the Price Control Statements on pages 124 to 125, the
Openreach Notes on pages 94 to 95 and the Glossary and Additional Information on pages 126 to
130.
o Wholesale local access on page 56; and
Basis of audit opinion
o Wholesale trunk segments on page 73;
14. As explained in "Basis of preparation" on pages 16 to 19, the Company has, by agreement with BT
Group plc, its ultimate parent company, prepared the Financial Statements by disaggregating
balances recorded in the general ledgers and other accounting records of BT Group plc and its
subsidiaries ("the Group") maintained in accordance with the Companies Act 2006 and used, in
accordance with that Act, for the preparation of the Company's statutory consolidated financial
statements for the years ended 31 March 2011 and 31 March 2010 ("the Statutory Financial
Statements").
o Traditional interface symmetric broadband origination (above 8mbit/s up to and inc.
45Mbit/s) on page 48;
o Traditional interface symmetric broadband origination (above 45mbit/s up to and inc.
155Mbit/s) on page 50;
• the Openreach Information on pages 88 to 95.
are fairly presented in accordance with the Primary Accounting Documents and comply with the
requirements of the Final Statements and Notifications and the Undertakings. In respect of the
Market Financial Statements as a whole, each of the Market Group Statements and each of the FPIA
Markets, we also report whether, in forming that opinion, having reviewed the Primary and
Secondary Accounting Documents, the Secondary Accounting Documents are appropriate to
implement the principles contained in the Primary Accounting Documents.
o Call origination on fixed public narrowband networks on page 67;
15. PricewaterhouseCoopers LLP audited the Statutory Financial Statements on which they expressed
unqualified audit opinions. In conducting our subsequent examination of the Financial
Statements, and in providing the opinions in paragraph 18 below, we have not performed any
additional tests of the transactions and balances which are recorded in the general ledgers and
other accounting records beyond those already performed for the purpose of the audits of the
Statutory Financial Statements.
o Technical areas (interconnect circuits) on page 70;
16. Having regard to the above:
10. We also report our opinion as to whether each of the Market Summary Statements for the selected
markets listed below (the “PPIA Markets ”)
o Fixed call termination on page 72;
o Wholesale broadband access market 1 on page 77; and
o Wholesale broadband access market 2 on page 79.
are properly prepared in accordance with the relevant procedures, defined in the Primary and
Secondary Accounting Documents, and comply with the requirements of the Final Statements and
Notifications. We also report whether, in forming that opinion, having reviewed the Primary and
Secondary Accounting Documents, anything has come to our attention that would lead us to
conclude that the principles and procedures contained in the Primary and Secondary Accounting
Documents have not been properly applied in the preparation of the PPIA Markets.
13
(i) we conducted our examination of the Financial Statements in accordance with International
Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. Our work
included examination on a test basis, of evidence relevant to the amounts and disclosures in
the Financial Statements. In respect of the Market Financial Statements as a whole, each of
the Market Group Statements, each of the FPIA Markets and the Openreach Information it also
included an assessment of the significant estimates and judgements made by the Company in
their preparation;
(ii) we planned and performed our examination of the Financial Statements so as to obtain all the
information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the Market Financial Statements as a
Section 3 - Audit Report
whole, each of the Market Group Statements, each of the FPIA Markets and the Openreach
Information are fairly presented in accordance with the relevant Primary Accounting
Documents and, on that basis, are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of
the presentation of information in the Financial Statements;
(iii) we planned and performed our examination of the PPIA Markets so as to obtain all the
information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that each of the PPIA Markets are properly
prepared in accordance with the procedures, defined in the relevant Primary and Secondary
Accounting Documents. However, as explained in the introduction to the Primary Accounting
Documents, the Primary Accounting Documents contain only the high level principles of
attribution. The Secondary Accounting Documents contain only the procedures describing
how these high level principles are applied. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the PPIA Market Statements.
17. In forming our opinions on the Market Financial Statements as a whole, each of the Market Group
Statements and each of the FPIA Markets we also reviewed the Company's Secondary Accounting
Documents which describe how the principles contained in the Primary Accounting Documents are
implemented. Our review consisted of reading the Secondary Accounting Documents and
considering whether each of the significant attribution and valuation methodologies described in
these documents are consistent with the principles described on pages 15 to 16 of the Primary
Accounting Documents.
18. In our opinion:
[a] the Market Financial Statements as a whole for the year ended 31 March 2011, which have
been prepared in accordance with the Primary Accounting Documents dated 15 September
2011, fairly present in accordance with the Primary Accounting Documents dated 15 September 2011 the results, mean capital employed and costs incurred by the Company and comply
with the requirements of the Final Statements and Notifications;
[b] each of the Market Group Statements for the year ended 31 March 2011, fairly presents in accordance with the Primary Accounting Documents dated 15 September 2011 the results, mean
capital employed and costs incurred by the Company and complies with the requirements of the
Final Statements and Notifications;
[c] each of the FPIA Markets for the year ended 31 March 2011, fairly presents in accordance with
the Primary Accounting Documents dated 15 September 2011 the results, mean capital employed and costs incurred by each of the markets and complies with the requirements of the Final Statements and Notifications;
[d] each of the PPIA Markets for the year ended 31 March 2011 have been properly prepared in
accordance with the procedures, if any, defined in the Primary and Secondary Accounting Documents all dated 15 September 2011 and complies with the requirements of the Final Statements and Notifications;
[e] the restated and re-presented Market Financial Statements as a whole for the year ended 31
March 2010 are fairly presented in accordance with the Primary Accounting Documents dated
14
28 July 2010, and comply with the requirements of the Final Statements and Notifications as
amended, where applicable, in accordance with “Comparability of current and prior year results” on page 17;
[f] the Openreach Information for the year ended 31 March 2011, which has been prepared in accordance with the Primary Accounting Documents dated 15 September 2011 , fairly presents
in accordance with the Primary Accounting Documents dated 15 September 2011 the results,
mean capital employed and costs incurred by the Company and complies with the requirements
of the Undertakings and the Explanatory Statement and Notifications; and
[g] In the context of (a) and (b) and (c) above, the Secondary Accounting Documents all dated 15
September 2011 are appropriate to implement the principles contained in the Primary Accounting Documents dated 15 September 2011 .
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London, 15 September 2011
Section 4 - Basis of Preparation
Section 4 - Basis of Preparation
Section 4
Basis of Preparation
15
Section 4 - Basis of Preparation
Section 4.1
4.1 –- Introduction
Section
Introduction to
to the
the Basis
Basis of
of Preparation
Preparation
Insofar as there is any inconsistency between any or all of the Primary Accounting Documents, the
Primary Accounting Documents shall have the order of priority as listed above.
The ultimate holding company of British Telecommunications plc (the Company) is BT Group plc
(referred to together with its subsidiary and associated undertakings and joint ventures as the “Group”
or “BT”). Substantially all the businesses and activities of the Group are carried out by British
Telecommunications plc, its subsidiaries, associated undertakings and joint ventures.
The economic Markets defined by Ofcom’s Final Statements and Notifications do not correspond to the
way in which the Group is organised for management and accounting purposes. The Current Cost
Financial Statements are therefore produced by overlaying the requirements of the regulatory
reporting framework on the management and accounting structure of the Group.
The Company has, by agreement with BT Group plc, prepared the Current Cost Financial Statements in
accordance with the Accounting Documents, by disaggregating balances recorded in the general
ledgers and other accounting records of the Group.
As far as possible, revenues, costs, assets and liabilities are directly associated with a product group or
component using information held within the Group’s accounting records and are directly attributed to
that item. Where no such direct association is possible, the remaining revenues, costs, assets and
liabilities are apportioned between two or more markets, services or components using a fully allocated
accounting system and employing apportionment bases that reflect as far as possible the causality of
the revenue, cost, asset or liability.
The basis of preparation and accounting policies adopted by the Group is detailed in BT Group plc’s
Annual Report dated 11 May 2011. BT’s Annual Report for the year ended 31 March 2011 on which
the auditors made an unqualified report, did not contain a statement under Section 498(2) or 498(3)
of the Companies Act 2006 and has been delivered to the Registrar of Companies.
The Accounting Documents means together the Primary Accounting Documents and the Secondary
Accounting Documents. The Primary Accounting Documents set out the framework under which the
Statements are to be prepared. The Secondary Accounting Documents namely the Detailed Attribution
Methods (DAM), the Detailed Valuation Methodology (DVM), the Long Run Incremental Costs:
Relationships and Parameters (R&P) and the Wholesale Catalogue set out more detailed descriptions of
the policies, methodologies, systems, processes and procedures for deriving and calculating the costs,
revenues, assets and liabilities underlying the Current Cost Financial Statements.
The Primary Accounting Documents set out the:
• Regulatory Accounting Principles - which means the principles applied or used by BT in the
preparation of the Current Cost Financial Statements, for example, that all costs should be fully
allocated.
• Attribution Methods - which means a high level summary of the practices used by BT to
attribute revenue (including appropriate Transfer Charges), costs (including appropriate Transfer
Charges) assets and liabilities to activities or, insofar as those activities have been aggregated to
wholesale segments in a given Market or Technical Area (as applicable), to each wholesale
segment.
• Transfer Charge System Methodology - which means the methodology of the system employed
by BT that enables an activity to use a service from another activity and to account for it as
though it had purchased that service from an unrelated party (including accounting for it at an
appropriate amount).
• Accounting Policies - which means the manner in which the requirements of the Companies Act
2006 and Article 4 of the International Accounting Standards (IAS) Regulation and BT’s
accounting policies whenever not superseded by the Regulatory Accounting Principles, are
applied by BT in each of the Current Cost Financial Statements. This document details the
accounting policies adopted in preparing the underlying financial information.
• Long Run Incremental Cost (“LRIC”) Methodology - means the long run incremental cost
principles, procedures and processes which form the framework under which long run
incremental costs are determined by BT. This document sets out the principles followed to derive
the long run incremental network costs.
16
The amounts of revenue, cost and capital employed attributed to markets, services and components
depend critically on the methods of attribution adopted. Typically, in a fully allocated accounting
system, a range of attribution methods is available. In selecting appropriate attribution methods and
appropriate non-financial data for use within the attribution models employed in the production of
these Current Cost Financial Statements, BT has had to make certain estimates and exercise its
judgement, having regard to the regulatory accounting principles, including cost causality and
objectivity, in order to comply with the requirements of the Primary Accounting Documents.
BT seeks to review and update non-financial data used within the attribution models at least annually.
Certain non-financial data employed for the purposes of the Current Cost Financial Statements has
been determined by sampling techniques appropriate to that data. BT reviews and updates attribution
methods and non-financial data sources on an ongoing basis and, where deemed appropriate, will
make improvements. Depending on the nature of the change, this may require Ofcom’s prior consent.
The Final Statements and Notifications continue to require significant granularity in the Current Cost
Financial Statements. When preparing financial statements at a very granular level it is not always
possible to develop a directly cost causal and objective method of cost apportionment and these
Financial Statements have been prepared on the basis of the methodologies BT considers to be the most
appropriate. However, in respect of the very small wholesale services within certain of the wholesale
markets, BT is aware that, in following the generic methodologies for attribution of common costs set
out in the Detailed Attribution Methods, anomalies may exist in the year on year cost trends in certain
services. Costing methodologies and non-financial data sources will also be subject to ongoing review,
and where deemed appropriate, improvements made.
BT’s costing systems used in the preparation of the Current Cost Financial Statements to attribute
revenues, costs, assets and liabilities to SMP Markets take as their starting point the general ledgers of
the Group which are maintained to the nearest penny. This level of granularity is maintained
throughout the costing process. However, to be consistent with the presentation of the results of the
Group in BT Group plc’s Annual Report, the results for each SMP Market are presented in figures
rounded to the nearest whole million pounds.
Section 4 - Basis of Preparation
Charges from Wholesale Markets to Retail Residual
The Mean Capital Employed Statements for the Wholesale Markets include balances relating to the
charges from the Wholesale Markets to Retail Residual. Retail Residual is deemed to settle these
charges in the same 33 day period (for 2009/10 this was 43 days) as other operators, as agreed with
Ofcom.
The Network Activity Statements on a current cost basis show component unit costs on a 24-hour basis.
However, charges to Retail Residual and other Communications Providers (CPs) for call conveyance
services vary by the time period, e.g. day or evening, during which the service was purchased. The
charges for other Wholesale Services to Retail Residual and other CPs do not require adjustment for the
time of day at which they are purchased.
Comparability of current and prior year results
There have been a number of changes in the year that impact on the comparability of the current and
prior year results:
(a) Changes to BT’s financial reporting obligations as set out in the Final Statements and Notifications
and listed below and explained in Section 4.2:
•
•
•
•
Implementation of the Wholesale Broadband Access Review.
Implementation of the Fixed Narrowband Wholesale Services Market Review.
Improved disclosure of AISBO services.
Other changes to the presentation of the Current Cost Financial Statements.
• Accordingly in calculating the LRIC, DLRIC and DSAC for 2010/11, those cost categories which
previously were split into two sub-cost categories are re-combined so that each has a single cost
driver which is the norm. This approach is consistent with that used for all other cost categories
and the results derived for LRIC, DLRIC, DSAC and FAC for the services affected are now
appropriately related and consistent with the underlying principles. The comparative figures for
the year 2009/10 have been restated on the same basis.
• Further details of this change in methodology are given in the publication Long Run Incremental
Cost Model: Relationships and Parameters 2011.
(g) The prior year comparatives have also been restated for the TISBO (above 45Mbit/s up to and
including 155Mbit/s) Market to reflect a correction in BT’s calculation of internal links volumes.
During 2010/11 BT reviewed and improved the data used to calculate the internal volumes of PPC
internal links resulting in decreased volumes of 64Kbit/s and 140Mbit/s internal links. As the impact on
the TISBO (above 45Mbit/s up to and including 155Mbit/s) Market was significant, prior year
comparatives have been restated to reflect this corrected data. This has reduced revenues and costs in
the TISBO (above 45Mbit/s up to and including 155Mbit/s) Market for 2009/10 by £21m and £9m
respectively. The costs removed from this market are now reflected in residual markets. The change has
had an immaterial impact on the TISBO (up to and including 8Mbit/s) Market and therefore
comparatives for this market have not been restated.
There were no other restatements or re-presentations.
CCA adjustments
(b) Changes made in the Current Cost Financial Statements 2009/10 in relation to the presentation of
the CCA revaluation adjustment in respect of duct as explained below. These changes were not made
for the year 2010/11.
(c) The prior year comparatives have been re-presented to reflect the following:
• The removal of reporting obligations for certain SMP markets as explained in Section 4.2.
• Certain presentational changes as detailed in Section 4.2.
(d) The average debtor days have reduced from 43 days (for 2009/10) to 33 days (for 2010/11) due to
improved billing and collection procedures.
(e) The daily averaging adjustment has been removed from the accounts to simplify the reporting. The
adjustment converted the balance sheet investments/borrowings from a mean into an average
position. The 2009/10 numbers have not been re-presented.
(f) BT has reviewed the methodology used to calculate the LRIC, DLRIC and DSAC of services published
in Sections 7 and 8 of the Current Cost Financial Statements.
• The review determined that the methodology adopted for cost categories related to duct and
local exchange concentrators and exceptionally and uniquely divided into two sub-cost
categories, had resulted in an allocation of fixed and common costs that was both inconsistent
with the approach adopted for all other cost categories and incompatible with underlying
principles for the calculation of DLRIC and DSAC. As a consequence, the LRIC, DLRIC and DSAC
for certain services had resulting inappropriate relationships with their fully allocated cost (FAC).
17
(a) The Current Cost Financial Statements for the Group are prepared under the Financial Capital
Maintenance (FCM) convention in accordance with the principles set out in the handbook “Accounting
for the effects of changing prices”, published in 1986 by the Accounting Standards Committee.
Set out below is a summary of the treatment of the CCA adjustments within the Current Cost Financial
Statements:
• Changes in fixed asset values are referred to as holding gains or losses arising during the year
and are attributed between all SMP Markets, Technical Areas, Components and Wholesale
Services on the same basis as the associated assets. The one-off exception to this in 2009/10
was the treatment of the holding gain arising on duct described in the CCA Revaluation
Adjustment section below, which was attributed between SMP Markets and Technical Areas, but
was excluded from Components and Wholesale Services (see below).
• A supplementary depreciation adjustment on fixed assets arising from differences between
historic cost accounting (HCA) and current cost accounting (CCA) valuations is also attributed
between the various Markets, Technical Areas, Components and Wholesale Services.
• Other CCA adjustments (e.g. one-off changes in valuations due to a revised methodology) are
included in the current cost valuations and are also attributed between all Markets, Technical
Areas, Components and Wholesale Services on the same basis as the associated assets. The
exception to this in 2009/10 was the treatment of the other CCA adjustments arising on duct,
which was attributed between SMP Markets and Technical Areas, but was excluded from
Components and Wholesale Services.
• The inflation adjustment to ordinary shareholders’ funds is not relevant to the SMP Markets,
Technical Areas and Wholesale Services for which Current Cost Financial Statements are
Section 4 - Basis of Preparation
showed a calculation of the return excluding the duct holding gain and related backlog
depreciation to provide a more meaningful view of the underlying rate of return.
• All service and component unit cost information shown in the notes to each Market Summary
and Appendices 1.1 to 1.3 for 2009/10 excluded this holding gain and related backlog
depreciation.
prepared. In addition, no CCA adjustment has been made to the valuation of goodwill as this is
also not relevant to the SMP Markets, Technical Areas and Wholesale Services.
(b) The CCA valuation of assets is affected by external factors such as changes in market prices and
changes to BT’s CCA policies and practices. For the year ended 31 March 2011, this resulted in a net
increase in the operating costs in SMP Markets and Technical Areas in these Financial Statements of
approximately £1,200m, which is mainly attributed to:
These changes to the presentation for 2009/10 have not been applied to 2010/11.
• The valuation of the duct assets having decreased due to a reduction in the contract prices and
estimated asset volumes arising from the use of sampled data.
• The valuation of the copper access network assets having decreased following the use of
updated engineering job time estimates reflecting efficiency gains offset by increases to copper
prices.
• The valuation of the fibre network having decreased following the use of updated engineering
job time estimates reflecting efficiency gains.
Regulatory Valuation of Copper-Based Local Access Network Assets
• The valuation of 21 Century Network assets having decreased due to a reduction in technology
costs.
As agreed with Ofcom, the Ofcom methodologies have not been implemented in the Current Cost
Financial Statements for 2011 and therefore the value of copper assets has not been adjusted to
Ofcom’s assessed Regulatory Asset Valuation.
CCA Revaluation Adjustment
In the Current Cost Financial Statements, BT revalues its assets under the Financial Capital Maintenance
concept of Current Cost Accounting. The approach to the valuation is set out in detail in the Detailed
Valuation Methodology.
For assets valued on an absolute valuation basis the volumes of assets in use are multiplied by the
current replacement cost. In the case of duct and its associated structures (manholes, joint boxes and
cabinets) the current replacement cost is based on the current contractual price which BT pays for the
construction of these assets. The contractual price is reduced by the application of a discount factor to
reflect the efficiencies, including economies of scale, revisions in working practices and the effects of
competitive tendering. These efficiencies could be achieved if the duct network were being replaced as
a whole over a reasonable period of time in order to reflect the scenario which would apply to a new
market entrant.
In 2010 the discount factor was reduced from 45% to 14.5% following a review in the light of new
information, resulting in a significant holding gain. This is fully described in the 2010 Current Cost
Financial Statements in Section 4.1. The discount factor has been reviewed for 2011 and is unchanged
at 14.5%.
In 2010, in accordance with the FCM concept, these CCA adjustments were included in the
Consolidated Performance Summary, the Market Summary for each SMP market and the Reconciliation
Statements. These adjustments were shown in the last two columns and include the words “excl. reval.
adj.” e.g. Section 7.1 – Financial Performance in Access Markets (Annex 7) where the last two columns
read “Return excl. reval. adj. (h)” and “ROCE excl. reval. adj. (h)”. However, BT agreed with Ofcom that
for 2010:
• Alternative information would also be supplied – the Consolidated Performance Summary,
Attribution of Wholesale Current Costs and the Market Summary for each SMP market also
18
In August 2005, Ofcom introduced an alternative methodology for determining its view of the current
cost regulatory asset value of the copper-based local access network. This methodology, which results
in a lower valuation, is used only by Ofcom for regulatory purposes and is not reflected in the
methodologies employed by BT in producing the Current Cost Financial Statements or required within
the asset values of BT Group plc’s Annual Report.
Section 4 - Basis of Preparation
Section 4.2
4.2 –- Other
the Basis
of Preparation
(Annex
Section
Other Aspects
Aspects to
of Basis
of Preparation
(Annex
22) 22)
• Deletion of the Roundings column relating to Revenue at a market summary level.
• An improved presentation of BT’s Reconciliation Statement for the Consolidated Group Income
Statement.
Section 4.2.1 Key changes as a result of certain regulatory decisions
The notes below refer to key changes as a result of Ofcom’s Statement “Changes to BT and KCOM’s
regulatory and financial reporting 2010/11 update” issued 2 June 2011 that impact the Current Cost
Financial Statements for the year ended 31 March 2011.
Implementation of the Wholesale Broadband Access Market Review
• In December 2010, Ofcom published its Review of the Wholesale Broadband Access Markets.
The review concluded that BT holds a position of Significant Market Power (SMP) in Wholesale
Broadband Access Markets 1&2 as defined in the review. Ofcom also concluded that no operator
holds a position of SMP in Market 3.
• As a result Ofcom have imposed on BT cost orientation and accounting separation reporting
obligations in Wholesale Broadband Access Markets 1&2.
• SMPF and related upstream Openreach charges are incorporated into these markets on an
Equivalence of Input (EOI) basis (i.e. at tariff rates) charged from Wholesale Residual rather than
at cost.
• BT has not restated the prior year results for the Wholesale Broadband Access Market.
Implementation of the Fixed Narrowband Wholesale Services Market Review
• On 15 September 2009, as a result of its review of the Fixed Narrowband Services Wholesale
Market and a review of the Network Charge Controls, Ofcom concluded that SMP status should
be removed from the Local-tandem conveyance and transit Market, and this is now part of
Wholesale Residual. The review also concluded that the Single transit Market is still subject to
some SMP obligations, including the obligation not to unduly discriminate. In assessing the level
of financial reporting obligations, the review concluded that for the year ended 31 March 2011,
cost accounting obligations would be removed but accounting separation obligations would
remain.
• As a result BT is no longer required to report any information for the Local-tandem conveyance
and transit market. The prior year results for this market and Wholesale Residual have been represented.
Improved disclosure of AISBO services
• Certain low revenue Backhaul Extension Services (BES) and Backhaul Network Services (BNS)
have been amalgamated. The prior year has not been re-presented.
Other changes to the presentation of the Current Cost Financial Statements
A small number of presentational changes have been made to the form and content of the Financial
Statements.
Prior year numbers have been re-presented for the following:
• Deletion of the Internal and External Sales columnar information at a service level.
19
Prior year numbers have not been re-presented for:
• Improvements to the format of Appendix 1.3 Annex 17.
Additionally, there has been a change to the format of the Price Control Statement to enable BT to
better demonstrate compliance with price controls during the year.
Section 5 - Summary of Financial Performance
Section 5 - Summary of Financial Performance
Section 5
Summary of Financial Performance
20
Section 5 - Summary of Financial Performance
Section 5.1 - Consolidated Performance Summary (Annex 3)
For the year ended 31 March 2011 (h)
Markets
Access Markets
Other Wholesale Markets
Residual Activities
Wholesale residual activities
Retail residual activities
Adjustments
Total Markets & Activities
Restated for the year ended 31 March 2010 (h)
Markets
Access Markets
Other Wholesale Markets
Residual Activities
Wholesale residual activities
Retail residual activities
Adjustments
Total Markets & Activities
Revenue
£m
CCA
operating
costs
£m
CCA return
before
taxation
£m
MCE
£m
Return
on MCE
%
Supporting
information
Section 7
Section 8
4,703
1,136
5,839
3,947
1,051
4,998
756
85
841
12,439
1,755
14,194
6.1 %
4.8 %
5.9 %
3,083
16,264
19,347
3,189
15,675
18,864
(106)
589
483
1,875
1,819
3,694
(5.7)%
32.4 %
13.1 %
0
25,186
Revenue
£m
(1)
23,861
CCA
operating
costs
£m
1
0
1,325
17,888
CCA return
before
taxation
£m
MCE
£m
n/a
7.4 %
Return
on MCE
%
CCA return
before
taxation
excl.
reval. adj.
(h)
£m
Return
on MCE
excl.
reval.
adj. (h)
%
4,597
1,586
6,183
1,184
1,084
2,268
3,413
502
3,915
12,053
2,418
14,471
28.3 %
20.8 %
27.1 %
1,800
338
2,138
14.9 %
14.0 %
14.9 %
2,884
17,291
20,175
2,607
17,196
19,803
277
95
372
1,304
3,416
4,720
21.2 %
2.8 %
7.9 %
175
95
270
13.4 %
2.8 %
5.7 %
0
0
0
0
26,358
22,071
4,287
19,191
(h) See Section 4 - Basis of Preparation.
21
n/a
22.3 %
0
2,408
n/a
12.5 %
Supporting
information
Section 7
Section 8
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6
Attribution of Wholesale Current Cost and Mean Capital Employed
22
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.1 - Attribution of Wholesale Current Costs 2011 (Annex 5A)
Wholesale local access
Total Access Markets
Call origination on fixed
public narrowband
networks
Single transit on fixed
public narrowband
networks
Technical areas
(Interconnect Circuits)
Fixed call termination
Wholesale trunk segments
Technical areas (Point of
Handover)
Sub-total Other Wholesale
& SMP National Markets
Wholesale Residual (h)
Total Markets
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
0
6
5
8
12
0
13
0
(1)
2
14
5
4
25
0
6
6
14
23
1
21
0
1
2
13
22
7
44
0
35
26
44
85
7
82
0
5
9
41
97
30
177
0
1
2
3
6
0
5
0
0
1
3
13
3
20
0
1
1
2
5
1
5
0
0
1
1
15
3
20
0
6
22
45
94
2
17
0
7
2
55
62
76
195
0
81
37
67
89
4
56
0
(6)
18
86
8
34
146
0
293
234
378
617
28
343
0
(44)
51
663
271
233
1,218
0
9
7
11
26
2
53
0
2
6
2
30
15
53
0
0
0
0
1
0
1
0
0
0
0
1
1
2
0
5
3
3
8
0
8
0
0
1
1
7
3
12
0
8
7
7
13
1
55
0
1
7
3
32
12
54
0
2
2
2
5
1
7
0
0
1
2
24
3
30
0
1
0
1
2
0
2
0
0
0
2
4
2
8
0
25
19
24
55
4
126
0
3
15
10
98
36
159
103
14
3
11
30
2
35
0
1
7
25
50
43
125
71
5
1
6
16
1
13
0
1
2
8
26
21
57
174
44
23
41
101
7
174
0
5
24
43
174
100
341
(174)
234
50
117
364
9
168
0
1,672
23
64
203
262
552
0
571
307
536
1,082
44
685
0
1,633
98
770
648
595
2,111
68
116
461
37
35
388
474
3,067
163
4
39
146
49
14
415
324
171
910
2,992
6,969
(2)
5
14
0
1
0
17
0
1
(2)
8
0
1
(2)
5
0
19
5
84
0
(15)
41
70
0
4
0
19
0
0
0
0
0
1
0
2
0
4
(1)
9
0
0
(1)
2
0
85
134
44
39
496
570
186
4
42
61
15
1,488
(62)
212
415
0
2,053
10
(2)
57
0
526
(47)
257
670
0
3,947
(h) See Section 4 - Basis of Preparation.
23
5
(1)
21
0
171
14
(3)
53
0
479
5
(6)
48
0
371
3
(3)
30
0
201
Total Other Wholesale &
SMP Markets
AISBO (up to and including
1Gbit/s)
£m
0
157
135
195
303
13
144
0
(50)
16
450
49
76
591
Wholesale broadband
access - Market 2 (h)
TISBO (above 45Mbit/s up
to and including 155Mbit/s)
£m
Wholesale broadband
access - Market 1 (h)
TISBO (above 8Mbit/s up to
and including 45Mbit/s)
Total CCA Operating Costs
TISBO (up to and including
8Mbit/s)
CCA Adjustments:
Holding (Gain)/Loss
Supplementary Depreciation
Other Adjustments
Roundings
Wholesale business
ISDN30 exchange line
services
Sub Total HCA Operating Costs
Wholesale ISDN2
exchange line services
Operating Costs of Wholesale Services:
EOI Charges (an)
Provision/Maintenance
Network Support
General Support
General Management
Finance and Billing
Accomodation
Bad Debts
Other Costs
Depreciation - Land & Buildings
- Access
- Switch and Transmission
- Other related
Sub Total Depreciation
Wholesale analogue
exchange line services
For the year ended 31 March 2011
22
(12)
131
0
1,051
15
(15)
197
0
3,189
(10)
230
998
0
8,187
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.1.1 - Notes on Wholesale sector costs
Section 6.1.1 - Notes on Wholesale sector costs
Other Costs
The notes below are intended to provide a brief description of the sectors reported in the Attribution of
Wholesale Current Cost Statement and the key drivers of these sectors to aid the user of the Current Cost
Financial Statements 2011. Further details of these sectors can be found in the Detailed Attributions
Methods which outlines in detail the key bases, descriptions and drivers of the network components.
Other Costs are dominated by payments to other UK communications providers, but also include
payments to overseas administrations and internal product transfer charge costs. The key drivers
include the pence per minute charging of the other operators for BT traffic on their network.
Provision/Maintenance
Depreciation
Depreciation is analysed between land and buildings, access, switch and transmission and other
(including network power, computers and software). The key drivers are the surveys of BT’s asset base
that allocate the depreciation charge through classes of work on the basis of surveys and engineering
models and direct mapping of BT classes of work to network components and then onto the appropriate
service based on usage factors and actual service volumes.
Provision/Maintenance includes costs of network provision, installation and maintenance. The most
material cost relates to D-side copper which is allocated on the basis of the number of lines.
Network Support
Network Support contains costs of activities necessary to support the running of BT’s network (plant
support costs such as group property). The key drivers for the apportionment of network support costs
include pay, the relative floor space occupied by fixed assets and the current cost replacement value of
assets.
General Support
General Support includes planning, development, supplies, transport, computing, customer service,
personnel & administration, customer support and other general support costs. The key drivers for the
apportionment of General Support include pay costs and various activity surveys.
General Management
General Management includes operator services, costs of general management activities and other
general expenses. The key drivers for the apportionment of General Management include analysis of
call minutes (for operator services), various activity surveys and pay costs.
Finance and Billing
Finance and Billing includes costs associated with activities of a financial nature, such as budget
building, management reporting, and billing and collection costs. The key drivers for the
apportionment of Finance and Billing include various activity surveys and pay costs.
Accommodation
The Accommodation sector includes exchange and office building costs. Accommodation costs are
mainly apportioned based on the usage of floor space and different utilities.
Bad Debts
Bad debts include costs associated with writing off amounts that cannot be collected from customers.
The key driver is revenue.
24
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.2 - Attribution of Wholesale Current Costs 2010 (Annex 5A)(Restated)
44
2
2
8
7
27
2
1
20
General Support
259
11
18
64
5
3
47
General Management
326
16
24
114
9
5
16
1
1
9
1
-
192
14
21
90
6
5
-
5
5
-
2
62
469
13
-
6
75
66
635
37
1
3
3
34
3
-
21
43
392
46
1
£m
£m
£m
£m
17
15
81
113
146
115
567
n/a
n/a
22
22
35
20
360
n/a
92
92
123
77
669
-
-
119
119
193
201
1,029
n/a
n/a
6
6
12
7
53
33
13
67
113
222
97
711
Sub-total Other Wholesale & SMP
National Markets
16
£m
Technical areas (Point of Handover)
306
305
£m
Wholesale trunk segments
65
31
£m
Fixed call termination
£m
Total Markets
9
6
£m
Wholesale Residual (h)
6
211
£m
Total Other Wholesale & SMP Markets
170
Network Support
£m
Sub-total Other Wholesale & SMP
Geographic Markets (h)
Provision/Maintenance
£m
Wholesale broadband access market 3 (4
or more principle operators) and non
geographic
£m
Wholesale broadband access market 2 2 to 3 principal operators
AISBO (up to and including 1Gbit/s)
£m
Wholesale broadband access market 1 BT only operator
TISBO (above 45Mbit/s up to and
including 155Mbit/s) (h)
£m
Technical areas (Interconnect Circuits)
TISBO (above 8Mbit/s up to and
including 45Mbit/s)
£m
Single transit on fixed public
narrowband networks
TISBO (up to and including 8Mbit/s)
£m
Call origination on fixed public
narrowband networks
Wholesale business ISDN30 exchange
line services
£m
Total Access Markets (h)
Wholesale ISDN2 exchange line services
£m
Wholesale local access
Wholesale analogue exchange line
services
Restated for the year ended 31 March 2010 (h)
£m
£m
£m
£m
9
2
1
33
4
2
-
13
8
3
1
31
-
11
15
8
2
74
1
1
1
-
6
8
45
8
1
109
Operating Costs of Wholesale Services:
Finance and Billing
Accommodation
Bad Debts
Other Costs
Depreciation - Land & Buildings
- Access
- Switch and Transmission
- Other related
Sub Total Depreciation
Sub total HCA Operating Costs
CCA Adjustments:
Holding (Gain)/Loss
2
-
-
-
-
-
-
-
2
(1)
-
-
-
-
-
(1)
n/a
n/a
-
0
(1)
-
1
(48)
(1)
0
2
-
-
2
(3)
(48)
1
-
-
1
-
-
2
n/a
n/a
4
4
6
1,872
1,830
18
2
2
10
1
1
1
13
48
7
-
1
7
1
-
16
-
-
22
22
38
12
98
465
15
14
47
5
2
53
50
651
2
n/a
1
3
3
1
10
33
9
31
73
83
18
752
72
6
27
100
15
12
49
6
287
33
1
8
34
23
4
103
9
2
71
82
185
139
611
115
7
9
41
5
5
42
28
252
16
1
4
12
4
2
39
-
-
159
159
198
163
613
670
30
52
198
26
20
145
97
1,238
58
2
14
56
31
7
168
42
11
283
336
504
332
2,074
1,798
83
132
548
51
36
321
364
3,333
178
4
47
139
55
12
435
92
39
674
805
1,240
2,721
7,294
(2,357)
(65)
(40)
(218)
(20)
(16)
(217)
(236)
(3,169)
(52)
-
(10)
(55)
(63)
(2)
(182)
n/a
n/a
(65)
(65)
(247)
(175)
(3,591)
(8)
(2)
(3)
6
23
205
(3)
-
(1)
(4)
(3)
(1)
(12)
n/a
n/a
(2)
(2)
(14)
1
192
19
19
105
60
980
Supplementary Depreciation
185
4
-
Other Adjustments
532
16
18
89
9
8
95
48
815
27
-
4
28
26
1
86
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
158
38
110
411
38
25
205
199
1,184
150
4
40
108
15
10
327
92
39
626
757
1,084
2,607
4,875
(552)
(14)
(4)
(8)
0
1
(10)
(64)
(651)
4
0
1
5
2
0
(14)
(655)
186
5
0
(8)
(2)
(3)
5
23
206
(3)
0
(1)
(4)
(3)
(1)
(117)
(2)
5
14
1
1
21
(14)
(91)
6
0
1
7
2
0
Roundings
Total CCA Operating Costs
CCA Adjustments excl. reval. adj. (h):
Holding (Gain)/Loss
Supplementary Depreciation
Other Adjustments
Roundings
CCA Operating Costs excl. reval. adj.
12
0
0
(2)
(2)
10
(12)
0
0
(2)
(2)
(14)
1
193
16
0
0
(4)
(4)
12
1
(78)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,315
72
133
546
50
35
337
309
2,797
185
4
48
147
56
11
451
92
39
666
797
1,248
2,709
6,754
(h) See Section 4 - Basis of Preparation.
25
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.3 - Attribution of Wholesale Current Cost Mean Capital Employed 2011 (Annex 6A)
Fixed call termination
Wholesale trunk
segments
Technical areas (Point of
Handover)
Sub-total Other
Wholesale & SMP
National Markets
Wholesale broadband
access - Market 1 (h)
Wholesale broadband
access - Market 2 (h)
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
14
0
378
424
0
268
255
160
713
(4)
615
17
32
136
433
4,461
679
5,043
194
885
879
62
0
0
118
73
70
59
1
0
0
0
3
6
2
10
0
3
19
8
15
10
65
0
0
128
79
76
51
12
0
0
118
0
66
11
1
0
12
6
0
8
3
151
0
15
389
163
241
136
70
40
0
62
0
171
128
25
13
0
23
0
95
58
246
53
15
474
163
507
322
231
158
222
344
103
644
750
910
4,672
916
5,861
460
2,036
1,951
Investments
Total Non-current Assets
Total Markets
Technical areas
(Interconnect Circuits)
£m
8
0
7
27
0
37
11
Wholesale Residual (h)
Single transit on fixed
public narrowband
networks
£m
7
0
21
29
0
33
10
Total Other Wholesale &
SMP Markets (h)
Call origination on fixed
public narrowband
networks
£m
Total Access Markets
£m
95
25
217
387
0
266
114
Wholesale local access
£m
16
11
81
68
12
53
26
AISBO (up to and
including 1Gbit/s)
TISBO (above 45Mbit/s up
to and including
155Mbit/s)
£m
15
102
(1)
98
21
7
18
Wholesale business
ISDN30 exchange line
services
TISBO (above 8Mbit/s up
to and including 45Mbit/s)
Non-current Assets
Land & Buildings
Access - Copper
Access - Fibre
Access - Duct
Switch
Transmission
Other
Wholesale ISDN2
exchange line services
£m
118
3,610
(20)
3,395
144
189
309
Wholesale analogue
exchange line services
TISBO (up to and
including 8Mbit/s)
For the year ended 31 March 2011
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,745
260
267
1,104
100
90
1,339
1,669
12,574
382
12
65
399
207
30
1,095
471
214
1,780
2,452
16,806
Current Assets
Stocks
Debtors
- Internal
- External
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
206
350
12
17
29
69
61
109
4
4
6
20
50
42
58
28
426
639
17
21
0
1
5
9
15
15
10
24
1
1
48
71
33
71
22
54
103
196
(68)
542
461
1,377
Total Current Assets
33
33
556
29
98
170
8
26
92
86
1,065
38
1
14
30
34
2
119
104
76
299
507
1,871
Liabilities falling due w ithin one year
- Internal
- External
0
(513)
0
(24)
0
(83)
0
(166)
0
(9)
0
(22)
0
(118)
0
(100)
0
(1,035)
0
(41)
0
(2)
0
(13)
0
(32)
0
(27)
0
(3)
0
(118)
0
(90)
0
(61)
0
(269)
0
(891)
0
(2,195)
Total Liabilities falling due w ithin one year
(513)
(24)
(83)
(166)
(9)
(22)
(118)
(100)
(1,035)
(41)
(2)
(13)
(32)
(27)
(3)
(118)
(2,195)
43
5
15
4
(1)
4
(26)
(14)
(3)
(1)
1
(2)
7
(1)
7,788
265
282
1,108
99
94
379
11
66
397
Net Current Assets/Liabilities
Total Assets less Current Liabilities
Provisions for liabilities & charges
Roundings
Mean Capital Employed
1,313
1,655
30
12,604
(165)
214
29
(90)
(61)
(269)
(891)
1
14
15
30
(384)
1,096
485
229
1,810
2,068
(324)
16,482
(75)
(5)
(8)
(39)
(2)
(2)
(12)
(22)
(18)
0
(4)
(17)
(2)
(1)
(42)
(9)
(4)
(55)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,713
260
274
1,069
97
92
1,301
1,633
12,439
361
11
62
380
212
28
1,054
476
225
1,755
1,875
16,069
(h) See Section 4 - Basis of Preparation.
26
(193)
(413)
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.3.1 - Notes on Wholesale MCE sector costs
Section 6.3.1 - Notes on Wholesale MCE sector costs
Transmission
The notes below are intended to provide a brief description of the Fixed Asset sectors and Working
Capital reported in the Attribution of Wholesale Current Cost Mean Capital Employed statement and the
key drivers of the sector to aid the user of the Financial Statements. Further details of these sectors can
be found in the Detailed Attribution Methods which outlines in detail the key bases, descriptions and
drivers of the network components.
This sector contains the asset values for transmission. Transmission includes Core Transmission
Synchronous Digital Hierarchy (SDH), Plesiochronous Digital Hierarchy (PDH), Asynchronous Transfer
Mode (ATM), Cables and Repeaters. The Core Transmission is used to link exchanges. The key drivers are
the surveys of BT’s asset base that allocate the depreciation charge through classes of work on the basis
of surveys, engineering models and direct mapping of COW to network components and then onto the
appropriate service based on usage factors and actual service volumes.
Land & Buildings
This sector contains the asset values that are booked to BT Classes of Work for land and buildings,
including freehold, long leases and short leases. The sector includes corporate offices, and network
buildings owned by BT. Asset values are mainly apportioned based on the usage of floor space and the
usage of the different utilities.
Access - Copper
This sector contains the asset values for access copper (all the copper cables in the access network and
all other necessary equipment required to carry signals between the user and the exchange.) This is split
into “Main” and “Distribution” Copper. The key drivers are the surveys of BT’s asset base that allocate
the depreciation charge through classes of work on the basis of surveys, engineering models and direct
mapping of COW to network components and then onto the appropriate service based on usage factors
and actual service volumes.
Access - Fibre
This sector contains the asset values for access fibre. The key drivers are the surveys of BT’s asset base
that allocate the depreciation charge through classes of work on the basis of surveys, engineering
models and direct mapping of COW to network components and then onto the appropriate service
based on usage factors and actual service volumes.
Access - Duct
This sector contains the asset values for duct. Duct is a pipe, tube or conduit through which
underground cables are passed. The key drivers are the surveys of BT’s asset base that allocate the
depreciation charge through classes of work on the basis of surveys, engineering models and direct
mapping of COW to network components and then onto the appropriate service based on usage factors
and actual service volumes.
Switch
This sector contains the asset values for switching equipment. This equipment is located in BT
exchanges. The key drivers are the surveys of BT’s asset base that allocate the depreciation charge
through classes of work on the basis of surveys and engineering models and direct mapping of COW to
network component and then onto the appropriate service based on usage factors and actual service
volumes.
27
Other
This sector contains the asset values for a range of assets used by BT Businesses including categories
such as Software, Motor Transport and 21CN. The key drivers are the surveys of BT’s asset base that
allocate the depreciation charge through classes of work on the basis of surveys, engineering models
and direct mapping of COW to network components and then onto the appropriate service based on
usage factors and actual service volumes.
Working Capital
The figures for debtors and creditors include an approximation of the internal “notional” debtors and
creditors that would be incurred if trades between BT’s lines of business were undertaken to a third
party and at arm’s length. They are based upon the average trading terms of BT Group’s external trades.
External debtors reflect BT’s external debts being allocated to services and products.
Section 6 - Attribution of Wholesale Current Cost and Mean Capital Employed
Section 6.4 - Attribution of Wholesale Current Cost Mean Capital Employed 2010 (Annex 6A)(Restated)
Investments
Total Non-current Assets
Current Assets
Stocks
Debtors
- Internal
- External
Wholesale trunk segments
Technical areas (Point of Handover)
Sub-total Other Wholesale & SMP
National Markets
Wholesale broadband access market 1 BT only operator
Wholesale broadband access market 2 2 to 3 principal operators
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
125
405
313
15
18
98
456
4,224
773
4,553
247
1,097
844
62
103
90
89
56
1
n/a
n/a
n/a
3
6
1
12
4
20
8
24
13
62
108
93
94
48
13
n/a
117
n/a
92
17
1
8
3
n/a
9
2
151
0
12
351
194
314
137
6
82
n/a
n/a
n/a
39
-
2
22
n/a
n/a
n/a
11
-
199
71
114
11
329
464
207
175
0
114
11
379
464
358
175
12
465
205
693
601
142
97
61
309
117
473
506
956
4,496
846
5,327
569
2,263
1,951
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
n/a
n/a
n/a
n/a
n/a
n/a
0
n/a
n/a
n/a
0
0
n/a
0
7,979
267
297
1,284
146
108
1,139
974
12,194
400
11
81
405
239
23
1,159
127
35
1,188
1,350
2,509
1,705
16,408
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0
n/a
n/a
n/a
n/a
n/a
n/a
0
-
-
1
1
1
34
35
39
n/a
21
n/a
55
6
115
6
187
20
(82)
395
649
526
62
122
208
347
1,210
n/a
-
n/a
(155)
0
(155)
0
(259)
n/a
(724)
0
(1,702)
(1,702)
285
86
18
3
38
1
78
8
5
1
10
1
58
1
52
10
544
111
24
11
1
-
7
1
20
1
19
1
1
-
72
14
371
21
39
86
6
11
59
62
655
35
1
8
21
20
1
86
Liabilities falling due within one year
- Internal
- External
n/a
(382)
n/a
(17)
n/a
(29)
n/a
(118)
n/a
(10)
n/a
(9)
n/a
(75)
n/a
(79)
0
(719)
n/a
(53)
n/a
(1)
n/a
(10)
n/a
(28)
n/a
(10)
n/a
(2)
0
(104)
Total Liabilities falling due within one year
(382)
(17)
(29)
(118)
(10)
(9)
(75)
(79)
(719)
(53)
(1)
(10)
(28)
(10)
(2)
(104)
0
0
(155)
(155)
(259)
(724)
(11)
4
10
(32)
(4)
2
(16)
(17)
(64)
(18)
0
(2)
(7)
10
(1)
(18)
39
21
(93)
(33)
(51)
(377)
271
307
382
11
79
398
249
22
1,141
166
56
(10)
Total Current Assets
Net Current Assets/Liabilities
Total Assets less Current Liabilities
Provisions for liabilities & charges
Roundings
Mean Capital Employed
Total Markets
Fixed call termination
£m
16
378
374
n/a
246
125
Wholesale Residual (h)
Technical areas (Interconnect Circuits)
£m
9
8
28
n/a
49
14
Total Other Wholesale & SMP Markets
Single transit on fixed public
narrowband networks
£m
Sub-total Other Wholesale & SMP
Geographic Markets (h)
Call origination on fixed public
narrowband networks
Wholesale broadband access market 3 (4
or more principle operators) and non
geographic
Total Access Markets (h)
£m
10
33
35
n/a
52
16
Wholesale local access
TISBO (above 45Mbit/s up to and
including 155Mbit/s) (h)
£m
110
38
256
380
343
157
AISBO (up to and including 1Gbit/s)
TISBO (above 8Mbit/s up to and
including 45Mbit/s)
£m
17
12
95
65
10
70
28
TISBO (up to and including 8Mbit/s)
£m
16
102
92
27
9
21
Wholesale business ISDN30 exchange
line services
£m
153
3,667
3
3,266
195
310
385
Wholesale analogue exchange line
services
Non-current Assets
Land & Buildings
Access - Copper
Access - Fibre
Access - Duct
Switch
Transmission
Other
Wholesale ISDN2 exchange line services
Restated for the year ended 31 March 2010 (h)
7,968
(31)
1,252
(25)
142
110
1,123
957
12,130
39
n/a
-
21
1,095
1,317
2,458
1,328
(492)
15,916
(3)
(5)
(1)
(2)
(3)
(7)
(77)
-
(2)
(2)
-
(24)
-
-
-
-
-
-
-
-
-
-
0
-
-
-
-
-
-
0
-
-
-
0
0
-
0
7,937
268
302
1,227
141
108
1,120
950
12,053
372
11
77
388
247
22
1,117
166
56
1,079
1,301
2,418
1,304
15,775
(10)
(h) See Section 4 - Basis of Preparation.
28
(16)
(16)
(40)
(24)
(141)
Section 7 - Review of Access Markets
Section 7 - Review of Access Markets
Section 7
Review of Access Markets
29
Section 7 - Review of Access Markets
Section 7.1 - Financial Performance in Access Markets (Annex 7)
For the year ended 31 March 2011
Wholesale analogue exchange line services
Wholesale ISDN2 exchange line services
Wholesale business ISDN30 exchange line services
TISBO (up to and including 8Mbit/s)
TISBO (above 8Mbit/s up to and including 45Mbit/s)
TISBO (above 45Mbit/s up to and including 155Mbit/s)
AISBO (up to and including 1Gbit/s)
Wholesale local access
Total Access Markets
Restated for the year ended 31 March 2010 (h)
Wholesale analogue exchange line services
Wholesale ISDN2 exchange line services
Wholesale business ISDN30 exchange line services
TISBO (up to and including 8Mbit/s)
TISBO (above 8Mbit/s up to and including 45Mbit/s)
TISBO (above 45Mbit/s up to and including 155Mbit/s) (h)
AISBO (up to and including 1Gbit/s)
Wholesale local access
Total Access Markets
Internal
Revenue
£m
1,708
75
195
335
29
43
317
0
External
Revenue
£m
570
59
124
337
13
25
237
636
Total
Revenue
£m
2,278
134
319
672
42
68
554
636
2,702
2,001
4,703
Internal
Revenue
£m
1,857
92
217
338
32
58
281
0
External
Revenue
£m
563
59
103
316
15
19
208
439
Total
Revenue
£m
2,420
151
320
654
47
77
489
439
2,875
1,722
4,597
HCA Costs
£m
1,488
68
116
461
37
35
388
474
CCA
Adjustments
£m
565
17
18
65
7
4
108
96
3,067
HCA Costs
£m
1,798
83
132
548
51
36
321
364
880
CCA
Adjustments
£m
(1,640)
(45)
(22)
(137)
(13)
(11)
(116)
(165)
3,333
(2,149)
(h) See Section 4 - Basis of Preparation.
30
Roundings
£m
0
0
0
0
0
0
0
0
0
Roundings
£m
0
0
0
0
0
0
0
0
0
Total CCA
Operating
Costs
£m
2,053
85
134
526
44
39
496
570
3,947
Total CCA
Operating
Costs
£m
158
38
110
411
38
25
205
199
1,184
Mean
Capital
Employed
£m
7,713
260
274
1,069
97
92
1,301
1,633
Return on
MCE
%
2.9 %
18.8 %
67.1 %
13.7 %
(1.9)%
30.8 %
4.5 %
4.1 %
756
12,439
6.1 %
Return
£m
2,262
113
210
243
9
52
284
240
Mean
Capital
Employed
£m
7,937
268
302
1,227
141
108
1,120
950
3,413
12,053
Return
£m
225
49
185
146
(2)
29
58
66
Return on
MCE
%
28.5 %
41.7 %
69.7 %
19.8 %
6.6 %
49.0 %
25.4 %
25.4 %
Return
excl.
reval.
adj. (h)
£m
1,105
79
187
108
(3)
42
152
130
ROCE
excl.
reval.
adj. (h)
%
13.9 %
29.6 %
62.1 %
8.8 %
(2.4)%
38.9 %
13.5 %
13.7 %
28.3 %
1,800
14.9 %
Section 7 - Review of Access Markets
Section 7.2 - Access Markets Review (Annex 10 & 14)
Section 7.2.1 - Access Markets Group Level Review (Annex 10)
Section 7.2.1 - Access Markets Group Level Review (Annex 10)
Overall in the WLR Access markets, the reduction in copper lines has continued primarily due to
continuing migrations to MPF. LLU operators have continued to expand their points of presence (PoPs)
and to migrate significant numbers of lines previously using WLR and SMPF to full MPF. Although the
MPF price is lower than SMPF and WLR, the one-off migration revenues and PoP revenues has more
than offset this, with revenue increasing year on year by £37m (1%).
Overall returns in TISBO markets have increased whereas returns in the Wholesale trunk segments
Market have decreased. This is due to the price adjustments made following the Leased Lines Charge
Control and further price changes in these markets in October 2010 and January 2011.
In addition, during the year, BT reviewed and improved the data used to calculate the internal volumes
of PPC internal links resulting in decreased volumes of 64Kbit/s and 140Mbit/s internal links. As the
impact on the TISBO (above 45Mit/s up to and including 155Mbit/s) Market was significant, prior year
comparatives have been restated to reflect this corrected data. This has resulted in a lower ROCE on the
TISBO (above 45Mbit/s up to and including 155Mbit/s) Market but has had an immaterial impact on
the TISBO (up to and including 8Mbit/s) Market.
The Alternative Interface Symmetric Broadband Origination (AISBO) Market has continued to show
growth due to the increased demand from mobile operators and a general migration from older
technologies including the products within the TISBO Market. Revenues have grown year on year by
£65m (13%) due to the volume growth offsetting the full year impact of the price reductions made in
January 2010.
Access Markets Openreach Level Review
A calculation of the return for all Openreach markets has been performed and is described as part of the
Openreach Notes in Section 10.7. This explains the return before and after adjusting for a number of
significant items.
31
Section 7 - Review of Access Markets
Section
Section 7.2.2
7.2.2 -- Access
Access Market
Market Level
Level Financial
Financial Review
Review (Annex
(Annex 14)
14)
Key Regulatory Changes
Market: Wholesale Analogue Exchange Line Services
There has been no change to the prevailing regulatory regime for ISDN2 in 2010/11. The existing
regime is outlined in the Wholesale Fixed Narrowband Market Review published by Ofcom in
September 2009.
Definition
The links between an end user and the remote concentrator unit by means of analogue technology.
Key Market Changes
An analogue exchange line provides a single 64Kbit/s channel, designed originally to support voice
traffic, but also capable of supporting data modems with bandwidths of up to 56Kbit/s, DSL Services,
and facsimile traffic. These are the most common types of exchange lines.
ISDN2 rental and connection volumes have continued to decline as customers migrate to cheaper
alternative technologies that can provide greater bandwidth such as DSL based broadband and ever
increasing availability of NGA (Next Generation Access) broadband services.
Key Regulatory Changes
Ofcom published its review of wholesale fixed analogue exchange lines markets on 20 December 2010
which updated its review from 15 September 2009. This review continued to find that there are no
longer two separate markets for Residential and Business analogue exchange line services, rather there
is a single market for wholesale analogue exchange line services.
Ofcom also published two statements setting the Wholesale Line Rental (WLR) Charge Controls on 26
October 2009 and 23 February 2010. These statements set out the charge controls for WLR analogue
services for the period 23 November 2009 to 31 March 2011. Given the change in market definition in
2009, Ofcom set a single charge control that applies only to a new core WLR product rather than setting
separate controls for residential and business lines. The cost orientation obligation was also removed
for service levels beyond the WLR Core rental product. All price changes for 2010/11 were
implemented on 1 April 2010 in line with the price controls.
Ofcom is currently consulting on revised charge controls for WLR for the period ending 31 March 2014.
A final statement is expected in Quarter 3 2011/12.
Key Market Changes
The volume of WLR PSTN lines continued to decline in 2010/11 for a number of reasons:
• External CPs (TalkTalk and Sky in particular) migrating their end users from WLR with SMPF to
MPF, coupled with expansions of their base of Points of Presence (PoPs) CP equipment in BT
exchanges.
• Churn of end users from CPs using WLR to CPs using MPF.
Market: Wholesale Business ISDN30 Exchange Line Services
Definition
The links between a business end user and the remote concentrator unit by means of ISDN30
technology.
Digital ISDN30 exchange lines are primary rate ISDN lines, which provide a means to deploy a wide
range of digital services over a 2Mbit/s bearer. A single ISDN30 line supports thirty 64Kbit/s channels
for voice and data calls, plus a 64Kbit/s channel for signalling. ISDN30 lines are used only by business
customers, and always in conjunction with a business PBX (Private Branch Exchange).
Key Regulatory Changes
On 20 August 2010, Ofcom published its market review statement for wholesale and retail ISDN30
services. In this, Ofcom concluded that Openreach continues to have Significant Market Power (SMP)
in the provision of wholesale ISDN30 services. A number of general remedies were imposed in the
market review, including the requirement to supply services and the requirement to provide services on
the basis of no undue discrimination. Ofcom imposed price caps on key ISDN30 services at the
prevailing price. Ofcom also concluded that the introduction of a price control for wholesale ISDN30
services may be appropriate.
Ofcom is currently consulting on the appropriate price control for ISDN30 for the period ending 31
March 2014. A final statement is expected in Quarter 3 2011/12.
Key Market Changes
ISDN30 rental volumes have declined as customers migrate to alternative cheaper technologies such as
the SIP (Session Initiation Protocol) Trunking product.
Market: Wholesale ISDN2 Exchange Line Services
Definition
The links between an end user and the remote concentrator unit by means of ISDN2 technology.
Digital ISDN2 exchange lines are basic rate ISDN lines, which provide a means to deploy a wide range
of digital services over a standard local loop. A single ISDN2 line supports two 64Kbit/s channels for
voice and data calls, plus a 16Kbit/s channel for signalling.
32
Section 7 - Review of Access Markets
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010. Ofcom also directed new lower prices for 2Mbit/s local end rentals.
Market: Traditional Interface Symmetric Broadband Origination (up to and
including 8Mbit/s)
Definition
Basket & services
Value of X
Sub Caps
Traditional Interface Symmetric Broadband Origination (TISBO) services include:
TI Basket
RPI-3.25% (up
to 30 Sept
2010); RPI1.75% (from 1
Oct 2010)
RPI - 0% sub-cap on sub-basket of
TISBO terminating segments.
• Wholesale terminating segments (PPCs).
• Radio base station (RBS) backhaul (including the Core Conveyance element).
• Local Loop Unbundling (LLU) backhaul which consists of LLU backhaul trunk and LLU backhaul
link. LLU backhaul links are regarded as a symmetric broadband origination service and should
therefore be included within the TISBO or AISBO markets, depending on the technology in use –
bandwidth considerations being taken into account in the case of the Synchronous Digital
Hierarchy (SDH) technology.
• Netstream 16 Long Line (including the Core Conveyance element).
Ofcom also views SDSL as a symmetric broadband origination service and it is therefore included within
the TISBO market.
Ofcom has concluded that BT has SMP in the low bandwidth across the UK, in high bandwidth and very
high bandwidth TISBO markets outside Central and East London Area (CELA) as well as in the Trunk
market at all bandwidths. Consequently, it has imposed regulation on all relevant circuits and technical
areas that fall within these markets, including RBS backhaul circuits.
Key Regulatory Changes
TI - Low bandwidth connection
and rental.
RPI + 5% sub-cap on each charge
(excluding POH charges).
RPI – 0% sub-cap on each charge
(POH charges only).
POC end and third party end
equipment charges.
RPI-0%
No charge can increase more than
5% in nominal terms.
All relevant ancillary services used
in the provision of TI services in
scope of the TI Basket.
RPI-0%
None.
These controls run from 1 October 2009 to 30 September 2012. The values of X in the charge control
apply to BT’s prices after these adjustments have been made.
Key Market Changes
On 8 December 2008, Ofcom published its Final Statement on the Business Connectivity Market
Review. Ofcom found that BT continue to have SMP in the low bandwidth TISBO market.
Ofcom increased regulation in the trunk market by imposing a charge control and requiring prices to be
notified at 90 days. In addition, Ofcom changed the definition of trunk segments from one based on
links between two BT SDH Tier 1 nodes to one based on routes between defined major urban areas and
imposed additional Service Level Agreement/Service Level Guarantee requirements from December
2008.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI – X% charge control on low bandwidth TISBO services as a remedy to its
finding of SMP for BT. Note that there is a single overall TI basket comprising connection and rental for
low bandwidth, high bandwidth and very high bandwidth TISBO services as well as rental for Trunk
services.
In addition, Ofcom determined starting charges for terminating and trunk segments and required the
introduction of separate Point of Handover rental charges to replace the current local end uplift factor
included in the rental price of external local ends. To balance the introduction of the new separate Point
of Handover charges, Ofcom required a corresponding reduction to external local end prices.
For PPCs there continues to be migration of external customers from 64Kbit/s circuits to 2Mbit/s
circuits. In addition, the demand for Time Division Multiplexing (TDM) circuits has started to decline as
customers migrate to 21CN services.
Price changes in the market took place in October 2010 and again in January 2011 to enable
compliance with the charge control Statement and obligations.
BT is seeing growth of bandwidth from mobile customers to enable them to use new mass market
mobile broadband services, music downloads, other bandwidth-hungry applications and mobile TV.
Market: Traditional Interface Symmetric Broadband Origination (above 8Mbit/s
up to and including 45Mbit/s)
Definition
Traditional Interface Symmetric Broadband Origination (TISBO) services include:
• Wholesale terminating segments (PPCs).
• Local Loop Unbundling (LLU) backhaul which consists of LLU backhaul trunk and LLU backhaul
link. LLU backhaul links are regarded as a symmetric broadband origination service and should
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
33
Section 7 - Review of Access Markets
therefore be included within the TISBO or AISBO markets, depending on the technology in use bandwidth considerations being taken into account in the case of the SDH technology.
• Netstream 16 Long Line (including the Core Conveyance element).
Ofcom also views SDSL as a symmetric broadband origination service and it is therefore included within
the TISBO market.
Ofcom has concluded that BT has SMP in the low, high and very high bandwidth TISBO markets outside
CELA as well as in the Trunk market at all bandwidths. Consequently, it has imposed regulation on all
relevant circuits and technical areas that fall within these markets, including RBS backhaul circuits.
Key Regulatory Changes
In December 2008 Ofcom published its Final Statement on the Business Connectivity Market Review.
Ofcom found that BT continue to have SMP in the high bandwidth TISBO market (but only outside
CELA) as well as in the market for trunk segments at all bandwidths.
Ofcom increased regulation in the trunk market by imposing a charge control and requiring prices to be
notified at 90 days. In addition, Ofcom changed the definition of trunk segments from one based on
links between two BT SDH Tier 1 nodes to one based on routes between defined major urban areas and
imposed additional Service Level Agreement/Service Level Guarantee requirements from December
2008.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI – X% charge control on high bandwidth TISBO services as a remedy to
its finding of SMP for BT. Note that there is a single overall TI basket comprising connection and rental
for low bandwidth, high bandwidth and very high bandwidth TISBO services as well as rental for Trunk
services.
Basket
Value of X
Sub Caps
TI Basket
RPI-3.25%
(up to 30
Sept 2010);
RPI-1.75%
(from 1 Oct
2010)
RPI - 0% sub-cap on sub-basket of
TISBO terminating segments.
POC end and third party end
equipment charges.
RPI-0%
No charge can increase more than
5% in nominal terms.
All relevant ancillary services used
in the provision of TI services in
scope of the TI Basket.
RPI-0%
None.
TI-High bandwidth connection
and rental (outside CELA).
RPI + 5% sub-cap on each charge
(excluding POH charges).
RPI – 0% sub-cap on each charge
(POH charges only).
These controls run from 1 October 2009 to 30 September 2012. The values of X in the charge control
apply to BT’s prices after these adjustments have been made.
Key Market Changes
Despite some PPC migration from the lower bandwidth market, significant competition has affected
this market resulting in falling volumes and revenue. In addition customers are looking for 21CN
alternatives where possible.
In addition, Ofcom determined starting charges for terminating and trunk segments and required the
introduction of separate Point of Handover rental charges to replace the current local end uplift factor
included in the rental price of external local ends. To balance the introduction of the new separate Point
of Handover charges, Ofcom required a corresponding reduction to external local end prices.
There were price changes in this market in October 2010 and January 2011 to meet the charge control
obligations.
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010.
Market: Traditional Interface Symmetric Broadband Origination (above 45Mbit/s
up to and including 155Mbit/s)
Definition
Traditional Interface Symmetric Broadband Origination (TISBO) services include:
• Wholesale terminating segments.
• Local Loop Unbundling (LLU) backhaul which consists of LLU backhaul trunk and LLU backhaul
link. LLU backhaul links are regarded as a symmetric broadband origination service and should
therefore be included within the TISBO or AISBO markets, depending on the technology in use bandwidth considerations being taken into account in the case of the SDH technology.
• Netstream 16 Long Line (including the Core Conveyance element).
34
Section 7 - Review of Access Markets
Ofcom also views SDSL as a symmetric broadband origination service and it is therefore included within
the TISBO market.
Ofcom has concluded that BT has SMP in the low, high and very high bandwidth TISBO markets outside
CELA (as well as in the Trunk market at all bandwidths). Consequently, it has imposed regulation on all
relevant circuits and technical areas that fall within these markets, including RBS backhaul circuits.
Key Regulatory Changes
In December 2008, Ofcom published its Final Statement on the Business Connectivity Market Review.
Ofcom found BT continue to have SMP in the very high bandwidth TISBO market (but only outside
CELA) as well as in the market for trunk segments at all bandwidths.
Ofcom increased regulation in the trunk market by imposing a charge control and requiring prices to be
notified at 90 days. In addition, Ofcom changed the definition of trunk segments from one based on
links between two BT SDH Tier 1 nodes to one based on routes between defined major urban areas and
imposed additional Service Level Agreement/Service Level Guarantee requirements from December
2008.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI – X% charge control on very high bandwidth TISBO services as a remedy
to its finding of SMP for BT. Note that there is a single overall TI basket comprising connection and
rental for low bandwidth, high bandwidth and very high bandwidth TISBO services as well as rental for
Trunk services.
In addition, Ofcom determined starting charges for terminating and trunk segments and required the
introduction of separate Point of Handover rental charges to replace the current local end uplift factor
included in the rental price of external local ends. To balance the introduction of the new separate Point
of Handover charges, Ofcom required a corresponding reduction to external local end prices.
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010.
Basket
Value of X
Sub Caps
TI Basket
RPI-3.25%
(up to 30
Sept 2010);
RPI-1.75%
(from 1 Oct
2010)
RPI – 0% sub-cap on sub-basket of
TISBO terminating segments.
POC end and third party end
equipment charges.
RPI-0%
No charge can increase more than 5%
in nominal terms.
All relevant ancillary services used
in the provision of TI services in
scope of the TI Basket.
RPI-0%
None.
Very high bandwidth connection
and rental (outside CELA).
RPI + 5% sub-cap on each charge
(excluding POH charges).
RPI – 0% sub-cap on each charge
(POH charges only).
These controls run from 1 October 2009 to 30 September 2012. The values of X in the charge control
apply to BT’s prices after these adjustments have been made.
Key Market Changes
There were price changes in this market in October 2010 and January 2011 to meet the charge control
obligations.
The numbers for 2009/10 have been restated as described in Section 4.1.
Netstream 16 Longline is available to customers at the bandwidth enabling mobile customers to use
mobile broadband services, music downloads, other bandwidth hungry applications and mobile T.V.
Market: Alternative Interface Symmetric Broadband Origination (up to and
including 1Gbit/s)
Definition
Alternative Interface Symmetric Broadband Origination (AISBO) services include:
•
•
•
•
•
•
35
Wholesale Extension Services (WES)
Backhaul Extension Services (BES)
Backhaul Network Services (BNS)
Openreach Network Backhaul Services (ONBS)
Ethernet Backhaul Direct (EBD)
Ethernet Access Direct (EAD)
Section 7 - Review of Access Markets
Ofcom concluded in the Business Connectivity Market Review published in December 2008 that BT has
SMP in the wholesale AISBO market (UK excluding Hull) and, as such, it is appropriate that regulation
be imposed on all bandwidths that fall within this market. These products are covered by the
Undertakings obligations and as such will be managed out of Openreach.
Key Regulatory Changes
WES/WEES and BES are specifically covered by the Undertakings, and as such are managed out of
Openreach. BNS, ONBS, EAD and EBD are products which have been developed since the Undertakings
were agreed but are also covered by these obligations and must also be managed out of Openreach. All
these products, with the exception of AISBO circuits above 1Gbit/s, fall within a currently regulated
market and continue to be subject to a cost orientation pricing regime as specified by the relevant
Significant Market Power (SMP) conditions in the Business Connectivity Market Review (BCMR)
published 8 December 2008. Ofcom will be reviewing the Business Connectivity Market during 2011/
12.
Ofcom published the Leased line Charge Control statement on 3 July 2009 in which they introduced
RPI-7% charge controls for low bandwidth AISBO services. These controls are effective to 30
September 2012.
Access (VULA) and Physical Infrastructure Access (PIA). Ofcom regards these new wholesale remedies
as appropriate in order to promote competition downstream in the evolving NGA space. VULA allows
CPs equivalent access to BT's NGA network by purchasing Generic Ethernet Access (GEA) a "virtually
unbundled" product, and PIA enables CPs to build their own NGA networks by sharing BT’s duct and
pole infrastructure to lay their own fibre.
Key Regulatory Changes
Ofcom concluded its Financial Framework Review and published the statement “A new pricing
framework for Openreach” on 22 May 2009 which set price controls for the period 22 May 2009 to 31
March 2010. The price control applied to new connection, rental, cease and transfer charges as well as
MPF and SMPF ancillary services and Co-Mingling services. All price changes for 2010/11 were
implemented on 1 April 2010 in line with the price control; the MPF and SMPF annual rental charges
as well as the MPF new provide charge were subsequently modified in October 2010 following the
conclusion of the Carphone Warehouse Group’s appeal to the Competition Appeal Tribunal against
Ofcom’s LLU statement.
Ofcom is currently consulting on revised charge controls for LLU for the period ending 31 March 2014.
A final statement is expected in Quarter 3 2011/12.
Key Market Changes
Key Market Changes
The access element of this market, made up of WES and EAD products, has shown strong growth. The
main drivers of growth were mobile and fixed operators requirements to migrate from TDM products,
and growing demand for high speed Ethernet connectivity from corporate and CPs. Connection prices
for WES and EAD (10Mbit/s and 100Mbit/s) were reduced from May to September 2010 as part of an
offer in response to the Leased Line Charge Control Statement (LLCC) issued by Ofcom. A five year term
reduced rental price was launched for EAD 1Gbit/s in December 2010. BES 100 rental prices reduced
from April 2010.
There has been further growth in LLU over the last 12 months:
Overall volumes for backhaul products have increased steadily over the year with increases in both EBD
and BES.
Market: Wholesale Local Access
Definition
Ofcom determined in December 2004, and again in October 2010, that BT has significant market
power (SMP) in the market for "wholesale local access in the UK excluding the Hull Area". Local Access
can be defined as those network components that comprise and constitute metallic (typically copper)
local loop access networks, 'cable' access networks or fibre-based local access networks between enduser premises and the facility at which those access networks connect to other communications
infrastructure. In practice, this is generally a Main Distribution Frame (for a metallic loop access
network), a cable head-end (for a 'cable' access network) or an Optical Distribution Frame (for a fibrebased local access network).
As a result of the finding that BT had SMP in the WLA market Ofcom imposed a variety of different
access remedies. These included maintaining the existing remedies of Local Loop Unbundling (LLU) and
Sub-Loop Unbundling (SLU), but also introducing two new remedies known as Virtual Unbundled Local
36
The volumes of CP PoPs continues to grow rapidly with the number of new LLU room builds increasing
year-on-year for the second consecutive year.
The MPF rental base increased as external CPs such as TalkTalk and Sky continue to migrate end users
from WLR and SMPF to MPF utilising these newly built PoPs.
The introduction of the ‘MPF re-use’ product has led to cheaper end user acquisition for CPs which has
stimulated greater churn in the market.
Most MPF and SMPF prices increased slightly on 1 April 2010. However, both MPF and SMPF rental
prices were subsequently reduced in mid October 2010 following a ruling from the Competition
Appeals Tribunal.
Section 7 - Review of Access Markets
Section 7.3 - Wholesale analogue exchange line services (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination ob
bligations
Wholesale analogue exchange line services
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
1,708
1,857
570
563
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
2,278
2,420
897
1,128
591
670
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
(62)
(2,357)
212
185
415
532
Total CCA
operating
Roundings
costs
£m
£m
-
2,053
158
Return
£m
MCE
£m
225
2,262
7,713
7,937
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrimination
Revenue
£m
Volume Unit (b)
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
For the year ended 31 March 2011
Service
Wholesale basic analogue internal service rentals
Wholesale basic analogue external service rentals
Wholesale premium analogue internal service rentals
Wholesale premium analogue external service rentals
1,270
324
12,250,928 lines
3,127,373 lines
15,378,301
103.68
103.68
132.14
132.10
64.01
63.99
168.51
168.46
0.78
0.78
384
201
3,487,124 lines
1,826,284 lines
5,313,408
110.00
110.00
132.91
132.91
64.31
64.31
169.30
169.30
0.83
0.83
Wholesale basic analogue internal service connections
31
555,669 conns
55.74
40.86
38.03
71.05
1.36
Wholesale premium analogue internal service connections
Wholesale premium analogue external service connections
18
41
330,002 conns
739,455 conns
1,069,456
55.74
55.74
40.86
40.86
38.03
38.03
71.05
71.05
1.36
1.36
3.09
3.09
9.40
9.73
8.40
8.71
29.36
29.78
0.33
0.32
Wholesale premium analogue internal service takeovers
Wholesale premium analogue external service transfers
5
4
Roundings
-
TOTAL
1,521,075 tover
1,389,783 transfer
2,910,858
2,278
37
Return
on
MCE
2.9 %
28.5 %
Return Return on
excl. MCE excl.
reval.
reval.
adjs. (h)
adjs. (h)
£m
1,105
13.9 %
Section 7 - Review of Access Markets
Section 7.3 - Wholesale analogue exchange line services (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Cost orientation
Non-discrimination
Revenue
£m
Volume Unit (b)
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Service
Wholesale basic analogue internal service rentals
Wholesale basic analogue external service rentals
Wholesale premium analogue internal service rentals
Wholesale premium analogue external service rentals
1,382
320
13,728,813 lines
3,176,807 lines
16,905,620
100.68
100.68
90.37
90.28
55.72
55.64
116.63
116.52
1.11
1.12
397
185
3,609,219 lines
1,684,192 lines
5,293,411
110.00
110.00
87.90
87.90
54.64
54.64
113.41
113.41
1.25
1.25
Wholesale basic analogue internal service connections
42
562,789 conns
73.94
43.24
39.33
61.72
1.71
Wholesale premium analogue internal service connections
Wholesale premium analogue external service connections
30
53
408,693 conns
717,579 conns
1,126,272
72.94
73.71
43.23
43.23
39.33
39.33
61.69
61.69
1.69
1.70
2.22
2.27
11.42
11.77
9.76
10.09
23.78
24.28
0.19
0.19
Wholesale premium analogue internal service takeovers
Wholesale premium analogue external service transfers
6
5
Roundings
-
TOTAL
2,594,413 tover
2,162,809 transfer
4,757,222
2,420
(b) See glossary for volume unit descriptors.
(h) See Section 4 - Basis of Preparation.
38
Section 7 - Review of Access Markets
Section 7.4 - Wholesale ISDN2 exchange line services (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination ob
bligations
Wholesale ISDN2 exchange line services
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
75
92
59
59
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
134
151
43
53
25
30
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
(2)
(65)
5
4
14
16
Total CCA
operating
Roundings
costs
£m
£m
-
85
38
Return
£m
MCE
£m
49
113
260
268
Note 1: Comparison of average internal and external
charges with each other and with FAC
Cost orientation
Non-discrimination
Revenue
£m
Volume Unit (b)
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
For the year ended 31 March 2011
Service
Wholesale business ISDN2 internal service rentals
Wholesale business ISDN2 external service rentals
70
55
640,549 channels
501,191 channels
1,141,741
110.00
110.00
95.52
94.39
55.52
54.74
132.07
130.62
1.15
1.17
Wholesale business ISDN2 internal service connections
Wholesale business ISDN2 external service connections
5
3
42,026 channels
24,186 channels
66,212
116.49
116.49
27.57
27.48
25.62
25.55
56.97
54.39
4.23
4.24
Wholesale business ISDN2 internal service takovers
Wholesale business ISDN2 external service transfers
0
1
10,026 channels
93,297 channels
103,323
5.65
5.65
8.88
8.89
8.04
8.04
28.29
28.33
0.64
0.64
Roundings
TOTAL
134
39
Return Return on
excl. MCE excl.
Return
reval.
reval.
on
MCE adjs. (h)
adjs. (h)
£m
18.8 %
41.7 %
79
29.6 %
Section 7 - Review of Access Markets
Section 7.4 - Wholesale ISDN2 exchange line services (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrimination
Revenue
£m
Volume Unit (b)
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Service
Wholesale ISDN2 internal service rentals
Wholesale ISDN2 external service rentals
86
51
783,623 channels
461,968 channels
1,245,591
110.00
110.00
71.01
70.99
49.49
49.47
111.49
111.45
1.55
1.55
Wholesale ISDN2 internal service connections
Wholesale ISDN2 external service connections
7
7
56,587 channels
56,452 channels
113,039
116.49
116.49
49.85
67.93
44.52
60.12
427.82
306.22
2.34
1.71
Wholesale ISDN2 internal service takovers
Wholesale ISDN2 external service transfers
0
1
11,301 channels
112,056 channels
123,357
5.65
5.65
18.43
18.42
16.26
16.26
42.88
42.87
0.31
0.31
Roundings
TOTAL
(1) 151
(b) See glossary for volume unit descriptors.
(h) See Section 4 - Basis of Preparation.
40
Section 7 - Review of Access Markets
Section 7.5 - Wholesale business ISDN30 exchange line services (Annex 12)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination obligations
Wholesale business ISDN30 exchange line services
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
195
217
124
103
319
320
72
80
44
52
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
1
(40)
-
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrimination
Revenue
Average
price
Volume Unit (b)
£m
£
For the year ended 31 March 2011
Service
Wholesale business ISDN30 internal service connections
Wholesale business ISDN30 external service connections
4
5
4
133,630 channels
92,395 channels
226,025
40.71
40.71
119
189
119
1,337,665 channels
843,990 channels
2,181,655
141.00
141.00
1
0
1
96,595 channels
223,638 channels
416,104
4.36
4.36
5
4
112,003 channels
88,882 channels
200,885
40.71
40.71
212
98
1,504,990 channels
697,521 channels
2,202,511
141.00
141.00
Wholesale business ISDN30 internal service takeovers
Wholesale business ISDN30 external service transfer
0
1
100,764 channels
219,489 channels
320,253
4.36
4.36
Roundings
-
Wholesale business ISDN30 internal service rentals
Wholesale business ISDN30 external service rentals
Wholesale business ISDN30 internal service takeovers
Wholesale business ISDN30 external service transfer
Roundings
TOTAL
5
189
0
1
-
1
195
124
319
Represented for the year ended 31 March 2010 (h)
Service
Wholesale business ISDN30 internal service connections
Wholesale business ISDN30 external service connections
Wholesale business ISDN30 internal service rentals
Wholesale business ISDN30 external service rentals
TOTAL
(b)
(h)
320
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
41
17
18
Total CCA
operating
Roundings
costs
£m
£m
-
134
110
Return
£m
MCE
£m
185
210
274
302
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
67.1 %
69.7 %
187
62.1 %
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination obligationss
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
335
338
337
316
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
672
654
284
350
177
198
Holding
(gain)/loss Supp. Dep.
£m
£m
Other adjs.
£m
(2)
(8)
57
89
10
(218)
Total CCA
operating
Roundings
costs
£m
£m
-
526
411
Return
£m
MCE
£m
146
243
1,069
1,227
Return
on
MCE
13.7 %
19.8 %
Return Return on
excl. MCE excl.
reval.
reval.
adjs. (h)
adjs. (h)
£m
108
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
0
0
769 circuits
460 circuits
1,229
Cost orientation
Average
price per
price list
£
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
525.06
525.06
1,663.04
1,663.04
1,560.18
1,560.18
3,244.29
3,244.29
0.32
0.32
Average
price/FAC
For the year ended 31 March 2011
Service
Internal Partial and Private Circuits 64Kbit/s - connection
External Partial and Private Circuits 64Kbit/s - connection
Partial and Private Circuits 64Kbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
-
24.00
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 64Kbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
11.00
4.00
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 64Kbit/s - trunk
Trunk segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
11
4
2.00
7.00
Trunk segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 64Kbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
24
3.00
52.00
8.00
1.00
0.21
135.03
18.17
153.20
170.57
155.29
266.76
0.90
135.03
84.90
1.22
0.21
164.41
18.17
182.58
170.57
155.29
266.76
1.07
158,540 links
57,932 links
1.91
0.02
1.00
1.00
1.91
0.02
1.93
6.06
2.76
17.42
0.32
1.91
0.02
1.00
1.00
1.91
0.02
1.93
6.06
2.76
17.42
0.32
3.39
0.02
3.41
6.17
2.86
17.69
0.55
3.39
0.02
3.41
6.17
2.86
17.69
0.55
2,304,126 km
2
1,123,103 km
7
1,919,752 km
3
935,748 km
52
93,083 le
8
135.03
84.90
13,934 le
42
3.39
0.02
1.00
1.00
3.39
0.02
1.00
1.00
496.01
84.90
1.00
0.79
496.01
66.73
562.74
356.60
269.08
558.21
1.58
496.01
84.90
1.00
0.79
496.01
66.73
562.74
356.60
269.08
558.21
1.58
8.8 %
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
11
13
6,242 circuits
7,360 circuits
13,602
36
72,374 links
28
55,343 links
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
Average
price/FAC
For the year ended 31 March 2011
Partial and Private Circuits 2Mbit/s - connection
Internal Partial and Private Circuits 2Mbit/s - connection
External Partial and Private Circuits 2Mbit/s - connection
Partial and Private Circuits 2Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total internal
11.00
13.00
442.27
143.60
36.00
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 2Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
442.27
143.60
28.00
43.00
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 2Mbit/s - local end CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal CLZ
Partial and Private Circuits 2Mbit/s - local end non CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal non CLZ
Partial and Private Circuits 2Mbit/s - local end CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External CLZ
Partial and Private Circuits 2Mbit/s - local end non CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External non CLZ
43
32.00
32
1.00
1.00
1,780.22
1,780.22
1,717.79
1,717.79
1,632.55
1,632.55
3,266.79
3,266.79
1.04
1.04
1.00
0.42
442.27
60.99
503.26
259.18
206.61
412.70
1.94
442.27
60.53
502.80
259.18
206.61
412.70
1.94
1.00
0.42
49.41
1.61
1.00
1.00
49.41
1.61
51.02
48.83
31.83
112.17
1.04
49.41
1.61
1.00
1.00
49.41
1.61
51.02
48.83
31.83
112.17
1.04
758.10
417.07
1,391.08
0.92
850,893 km
618,299 km
4.00
4
11,115 le
74.00
74
101,065 le
1.00
1
4,006 le
37.00
37
51,337 le
Weighted average price for CLZ/non CLZ // Nationally averaged cost
293.16
143.60
1.00
0.40
293.16
57.24
350.40
642.87
143.60
1.00
0.59
642.87
85.07
727.94
293.16
143.60
1.00
0.40
293.16
57.24
350.40
642.87
143.60
1.00
0.59
642.87
85.07
727.94
693.86
43
.
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
Average
price/FAC
For the year ended 31 March 2011
Internal SDSL
11.00
External Radio Backhaul Service - sub 2Mbit/s connection
External Radio Backhaul Service - sub 2Mbit/s rentals
Internal Radio Backhaul Service - 2Mbit/s connection
External Radio Backhaul Service - 2Mbit/s connection
Internal Radio Backhaul Service - 2Mbit/s rentals
External Radio Backhaul Service - 2Mbit/s rentals
External Netstream 16 LL 2Mbit/s connection
-
7.00
Internal Excess construction charges
External Excess construction charges
5.00
TOTAL
19.00
19
16.00
4
16
124.00
47
124
(u2)
145 circuits
(u3)
3,568 circuits
12,640 circuits
(u3)
(u3)
(s2)
n/a
n/a
n/a
n/a
519.34
1,697.47
1,592.06
3,326.32
0.31
(s3)
n/a
n/a
n/a
n/a
1,253.17
1,253.17
1,711.50
1,711.50
1,626.90
1,626.90
3,246.05
3,246.05
0.73
0.73
(s3)
(s3)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
0
1,750.00
81,361.69
77,510.51
150,848.87
0.02
20.00
20
(u4)
(s4)
n/a
n/a
n/a
n/a
-
0
(u4)
(s4)
n/a
n/a
n/a
n/a
4.00
4
4
(u5)
(u5)
(s5)
(s5)
Estimated cost of £0.3m
Estimated cost of £0.7m
-
0
16.00
7
16
(un)
(un)
(un)
(un)
Estimated matched cost of £6.8m (*)
Estimated matched cost of £14.1m (*)
2.00
5
2
(un)
(un)
(un)
(un)
Estimated matched cost of £3.2m (*)
Estimated matched cost of £2.3m (*)
4.00
Internal Third Party Customer Infrastructure
External Third Party Customer Infrastructure
Roundings
0
47.00
External Netstream 16 LL 2Mbit/s rentals CLZ
Equipment depreciation
-
4.00
External Netstream 16 LL 2Mbit/s rentals non CLZ
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
11
2.00
1.00
3
335
337
672
13 circuits
Estimated equipment depreciation of £34.2m
44
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
1
1
1,181 circuits
1,008 circuits
2,189
Cost orientation
Average
price per
price list
£
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
499.94
499.94
1,530.24
1,530.24
1,407.32
1,407.32
2,615.78
2,615.78
0.33
0.33
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Service
Internal Partial and Private Circuits 64Kbit/s - connection
External Partial and Private Circuits 64Kbit/s - connection
Partial and Private Circuits 64Kbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
22
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
8
Partial and Private Circuits 64Kbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
6
99.90
12.54
112.44
158.22
140.73
260.16
0.71
99.90
63.95
1.00
0.20
99.90
12.54
112.44
158.22
140.73
260.16
0.71
1.76
0.02
1.78
4.30
2.14
11.18
0.41
1.76
0.02
1.78
4.30
2.14
11.18
0.41
5.25
0.02
5.27
4.30
2.14
11.17
1.22
5.25
0.02
5.27
4.30
2.14
11.17
1.22
370.38
46.51
416.89
396.36
350.11
714.46
1.05
409.41
51.41
460.82
379.57
308.43
621.00
1.21
70,941 links
1.76
0.02
1.00
1.00
3,183,600 km
2
1,275,891 km
Partial and Private Circuits 64Kbit/s - trunk
Trunk segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
12
2,301,387 km
Trunk segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
5
922,327 km
39
92,621 le
8
16,821 le
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
1.00
0.20
198,256 links
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 64Kbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
99.90
63.95
1.76
0.02
5.25
0.02
5.25
0.02
409.41
63.95
409.41
63.95
45
1.00
1.00
1.00
1.00
1.00
1.00
0.90
0.73
1.00
0.80
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
Partial and Private Circuits 2Mbit/s - connection
Internal Partial and Private Circuits 2Mbit/s - connection
External Partial and Private Circuits 2Mbit/s - connection
13
14
7,402 circuits
8,240 circuits
15,642
Partial and Private Circuits 2Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total internal
40
85,682 links
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
1,695.04
1,695.04
2,012.98
2,012.98
1,867.67
1,867.67
3,090.74
3,090.74
0.84
0.84
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 2Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 2Mbit/s - local end CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal CLZ
Partial and Private Circuits 2Mbit/s - local end non CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal non CLZ
Partial and Private Circuits 2Mbit/s - local end CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External CLZ
Partial and Private Circuits 2Mbit/s - local end non CLZ
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External non CLZ
26
42
27
411.61
132.30
1.00
0.40
411.61
53.41
465.02
255.63
221.22
453.38
1.82
411.61
132.30
1.00
0.40
411.61
53.41
465.02
255.63
221.22
453.38
1.82
55,799 links
45.50
1.48
1.00
1.00
45.50
1.48
46.98
49.89
33.82
102.14
0.94
45.50
1.48
1.00
1.00
45.50
1.48
46.98
49.89
33.82
102.14
0.94
758.88
447.17
1,217.21
891,043 km
565,044 km
5
14,216 le
75
109,543 le
2
3,737 le
40
51,689 le
Weighted average price for CLZ/non CLZ // Nationally averaged cost
355.40
131.64
0.87
0.40
308.53
53.09
361.62
692.06
132.97
0.88
0.55
609.41
73.28
682.69
355.40
131.64
1.00
0.46
355.40
61.16
416.56
692.06
132.97
1.00
0.63
692.06
83.22
775.28
678.38
46
0.89
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
£m
Volume Unit (b)
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
(s2)
187.05
143.24
331.00
n/a
499.94
1,569.76
1,441.36
2,685.24
0.32
(s3)
497.82
345.35
693.51
n/a
1,355.56
1,355.56
2,018.58
2,018.58
1,872.20
1,872.20
3,102.89
3,102.89
0.67
0.67
(s3)
(s3)
1,629.50
1,629.50
1,066.04
1,066.04
2,654.51
2,654.51
n/a
n/a
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Internal SDSL
External Radio Backhaul Service - sub 2Mbit/s connection
12
0
External Radio Backhaul Service - sub 2Mbit/s rentals
17
Internal Radio Backhaul Service - 2Mbit/s connection
External Radio Backhaul Service - 2Mbit/s connection
10
20
Internal Radio Backhaul Service - 2Mbit/s rentals
External Radio Backhaul Service - 2Mbit/s rentals
41
95
External Netstream 16 LL 2Mbit/s connection
(u3)
7,348 circuits
15,022 circuits
(u3)
(u3)
1,328.99
2,003.71
1,859.37
3,077.21
0.66
25
(u4)
(s4)
n/a
n/a
n/a
n/a
External Netstream 16 LL 2Mbit/s rentals CLZ
0
(u4)
(s4)
n/a
n/a
n/a
n/a
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
5
4
(u5)
(u5)
(s5)
(s5)
Estimated total cost of £0.2m
Estimated total cost of £0.1m
10
19
(un)
(un)
(un)
(un)
Estimated matched cost of £10.5m (*)
Estimated matched cost of £18.9m (*)
5
3
(un)
(un)
(un)
(un)
Estimated matched cost of £3.1m (*)
Estimated matched cost of £2.0m (*)
External Netstream 16 LL 2Mbit/s rentals non CLZ
Equipment depreciation
Internal Third Party Customer Infrastructure
External Third Party Customer Infrastructure
Internal Excess construction charges
External Excess construction charges
Roundings
TOTAL
(b)
(sx)
(ux)
(un)
(h)
(*)
0
(u2)
210 circuits
138 circuits
Estimated equipment depreciation of £41m
-
654
See glossary for volume unit descriptors.
This service comprises a number of individual prices as indicated by the value of x.
This service comprises a number of individual volumetrics as indicated by the value of x.
This service comprises a large number of volumetrics and prices.
See Section 4 - Basis of Preparation.
This component is attributed on a % basis so no volume or unit cost is derivable.
47
Section 7 - Review of Access Markets
Section 7.7 - TISBO (above 8Mbit/s up to and including 45Mbit/s)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination obliigations
Traditional interface symmetric broadband origination (above 8Mbit/s up to and including 45Mbit/s)
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
29
32
13
15
42
47
17
25
20
26
Holding
(gain)/loss Supp. Dep.
£m
£m
Other adjs.
£m
(2)
(2)
8
9
1
(20)
Total CCA
operating
Roundings
costs
£m
£m
-
44
38
Return
£m
MCE
£m
(2)
9
97
141
Return
on
MCE
(1.9)%
6.6 %
Return Return on
excl. MCE excl.
reval.
reval.
adjs. (h)
adjs. (h)
£m
(3)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrimin
nation
Revenue
£m
Volume Unit (b)
Service
Internal Partial and Private Circuits 34/45Mbit/s - connection
External Partial and Private Circuits 34/45Mbit/s - connection
0
0
24 circuits
90 circuits
114
Partial and Private Circuits 34/45Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
6
Cost orientation
Average Proportion
price per included in
price list calculation
£
Average
price
£
FAC (see
App 1.2)
£
Unaudited Unaudited
Average
(D)LRIC
DSAC price/FAC
£
£
1,673.51
1,673.51
1,734.36
1,734.36
1,648.01
1,648.01
3,302.95
3,302.95
0.96
0.96
For the year ended 31 March 2011
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 34/45Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 34/45Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
3
15
6
7
1.00
0.55
3118.62
117.80
3,236.42
2,572.20
1,917.28
3,904.73
1.26
3,118.62
212.70
1.00
0.55
3118.62
117.80
3,236.42
2,572.20
1,917.28
3,904.73
1.26
1,062 links
489.65
2.41
1.00
1.00
489.65
2.41
492.06
388.59
268.20
850.81
1.27
489.65
2.41
1.00
1.00
489.65
2.41
492.06
388.59
268.20
850.81
1.27
31,210 km
11,484 km
2,512.52
212.70
1.00
0.45
2512.52
94.91
2,607.43
6,315.02
3,094.77
11,400.99
0.41
2,512.52
212.70
1.00
0.45
2512.52
94.91
2,607.43
6,315.02
3,094.77
11,400.99
0.41
(s4)
n/a
n/a
n/a
n/a
2,810 le
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
3
1,062 le
Netstream 16 LL 45Mbit/s rentals
0
(u4)
Support Se rvice
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
1
Equipment depreciation
-
Roundings
-
TOTAL
3,118.62
212.70
1,787 links
(u4)
(u4)
(s4)
(s4)
Estimated cost of £0.5m
Estimated cost of £1m
Estimated equipment depreciation of £5.1m
42
48
(2.4)%
Section 7 - Review of Access Markets
Section 7.7 - TISBO (above 8Mbit/s up to and including 45Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrimin
nation
Revenue
£m
Volume Unit (b)
Service
Internal Partial and Private Circuits 34/45Mbit/s - connection
External Partial and Private Circuits 34/45Mbit/s - connection
0
0
20 circuits
160 circuits
180
Partial and Private Circuits 34/45Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
7
Cost orientation
Average Proportion
price per included in
price list calculation
£
Average
price
£
FAC (see
App 1.2)
£
Unaudited Unaudited
Average
(D)LRIC
DSAC price/FAC
£
£
1,593.44
1,593.44
1,978.15
1,978.15
1,837.61
1,837.61
3,031.88
3,031.88
0.81
0.81
Restated for the year ended 31 March 2010 (h)
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 34/45Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
4
17
2,872.36
195.90
1.00
0.51
2,872.36
100.19
2,972.55
2,773.42
2,210.10
4,531.72
1.07
2,872.36
195.90
1.00
0.51
2,872.36
100.19
2,972.55
2,773.42
2,210.10
4,531.72
1.07
2,216 links
1,181 links
450.99
2.22
1.00
1.00
450.99
2.22
453.21
389.14
272.72
748.60
1.16
450.99
2.22
1.00
1.00
450.99
2.22
453.21
389.14
272.72
748.60
1.16
2,378.47
82.96
2,461.43
6,542.44
3,132.17
10,498.01
0.38
2,744.12
95.71
2,839.83
5,579.60
3,231.93
9,139.89
0.51
n/a
n/a
n/a
n/a
37,129 km
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
6
12,929 km
Partial and Private Circuits 34/45Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
8
3,312 le
2,744.12
195.90
0.87
0.42
2,744.12
195.90
1.00
0.49
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
3
1,187 le
Netstream 16 LL 45Mbit/s rentals
0
(u4)
(s4)
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
2
(u4)
(u4)
(s4)
(s4)
Equipment depreciation
(1) TOTAL
47
(b)
(sx)
(ux)
(un)
(h)
Estimated equipment depreciation of £6.8m
-
Roundings
Estimated total cost of £0.6m
Estimated total cost of £1.0m
See glossary for volume unit descriptors.
This service comprises a number of individual prices as indicated by the value of x.
This service comprises a number of individual volumetrics as indicated by the value of x.
This service comprises a large number of volumetrics and prices.
See Section 4 - Basis of Preparation.
49
Section 7 - Review of Access Markets
Section 7.8 - TISBO (above 45Mbit/s up to and including 155Mbit/s)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination obli gations
Traditional interface symmetric broadband origination (above 45Mbit/s up to and including 155Mbit/s)
Summary
2011
2010 restated
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
43
58
25
19
68
77
15
16
20
20
Holding
(gain)/loss Supp. Dep.
£m
£m
Other adjs.
£m
(2)
(3)
5
8
Average
price per
price list
£
Proportion
included in
calculation
1
(16)
Total CCA
operating
Roundings
costs
£m
£m
-
39
25
Return
£m
MCE
£m
29
52
92
108
Return Return on
excl. MCE excl.
reval.
reval.
adjs. (h)
adjs. (h)
£m
Return
on
MCE
30.8 %
49.0 %
42
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discriminnation
Revenue
£m
Volume Unit (b)
0
0
8 circuits
12 circuits
20
Cost orientation
Average
price
£
FAC (see
App 1.2)
£
Unaudited Unaudited
(D)LRIC
DSAC
£
£
Average
price/FAC
1,895.41
1,895.41
1,734.15
1,734.15
1,647.71
1,647.71
3,305.36
3,305.36
1.09
1.09
For the year ended 31 March 2011
Service
Internal Partial and Private Circuits 140/155Mbit/s - connection
External Partial and Private Circuits 140/155Mbit/s - connection
0
0
Partial and Private Circuits 140/155Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
16
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
16
1
Partial and Private Circuits 140/155Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
9626.07
196.89
9,822.96
8,882.57
6,347.07
13,266.66
1.11
9,626.07
398.75
1.00
0.49
9626.07
196.89
9,822.96
8,882.57
6,347.07
13,266.66
1.11
493.46
4.13
497.59
559.79
342.32
1,342.61
0.89
493.46
4.13
497.59
559.79
342.32
1,342.61
0.89
1,606 links
104
links
11
21,259 km
1
1,133 km
8
781 le
493.46
4.13
1
Partial and Private Circuits 140/155Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
8
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Netstream 16 LL 155Mbit/s rentals
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
1
21
21
1
9
1
9
Equipment Depreciation
TOTAL
1.00
0.49
493.46
4.13
11
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Roundings
1
9,626.07
398.75
104 le
(u4)
(u4)
(u4)
1
-
(1)
43
25
68
1.00
1.00
9,869.12
398.75
1.00
0.51
9869.12
201.86
10,070.98
10,638.95
7,027.14
18,045.16
0.95
9,869.12
398.75
1.00
0.51
9869.12
201.86
10,070.98
10,638.95
7,027.14
18,045.16
0.95
(s4)
n/a
n/a
n/a
n/a
(s4)
(s4)
-
1.00
1.00
Estimated cost of £2.5m
Estimated cost of £0.2m
Estimated equipment depreciation of £0.4m
50
38.9 %
Section 7 - Review of Access Markets
Section 7.8 - TISBO (above 45Mbit/s up to and including 155Mbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discriminnation
Revenue
£m
Volume Unit (b)
0
0
8 circuits
23 circuits
31
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation
Average
price
£
FAC (see
App 1.2)
£
Unaudited Unaudited
(D)LRIC
DSAC
£
£
Average
price/FAC
1,804.72
1,804.72
1,980.00
1,980.00
1,839.39
1,839.39
3,034.00
3,034.00
0.91
0.91
Restated for the year ended 31 March 2010 (h)
Service
Internal Partial and Private Circuits 140/155Mbit/s - connection
External Partial and Private Circuits 140/155Mbit/s - connection
Partial and Private Circuits 140/155Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal (restated)
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Partial and Private Circuits 140/155Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal (restated)
16
1
22
10,408.45
379.26
1.00
0.42
10,408.45
159.13
10,567.58
9,601.08
7,670.54
16,882.58
1.10
10,408.45
379.26
1.00
0.42
10,408.45
159.13
10,567.58
9,601.08
7,670.54
16,882.58
1.10
1,528 links
93 links
1,177.73
5.32
1.00
1.00
1,177.73
5.32
1,183.05
610.38
392.43
1,280.46
1.94
1,177.73
5.32
1.00
1.00
1,177.73
5.32
1,183.05
610.38
392.43
1,280.46
1.94
12,619.81
192.94
12,812.75
12,066.53
7,974.12
17,277.38
1.06
14,397.82
220.12
14,617.94
14,501.69
10,068.62
21,493.49
1.01
10000
2,083.00
1,935.81
3,190.68
4.80
n/a
n/a
n/a
n/a
18,958 km
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
1
1,000 km
Partial and Private Circuits 140/155Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
10
809 le
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
2
107 le
Netstream 16 LL 155Mbit/s connection
0
14,397.82
379.26
14,397.82
379.26
2 circuits
0.88
0.51
1.00
0.58
Netstream 16 LL 155Mbit/s rentals
14
(u4)
(s4)
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
10
1
(u4)
(u4)
(s4)
(s4)
Equipment depreciation
-
Roundings
-
TOTAL (restated)
(b)
(sx)
(ux)
(h)
Estimated total cost of £2.2m
Estimated total cost of £0.2m
Estimated equipment depreciation of £0.2m
77
See glossary for volume unit descriptors.
This service comprises a number of individual prices as indicated by the value of x.
This service comprises a number of individual volumetrics as indicated by the value of x.
See Section 4 - Basis of Preparation.
51
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discrimination obli gations
Alternative interface symmetric broadband origination (up to and including 1Gbit/s)
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
317
281
237
208
554
489
193
176
195
145
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
19
(217)
5
6
84
95
Total CCA
operating
Roundings
costs
£m
£m
-
496
205
Return
£m
MCE
£m
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
58
284
1,301
1,120
4.5 %
25.4 %
Note 1: Comparison of average internal and external
charges with each other and with FAC
Cost orientation
Non-discrimination
Revenue
Volume Unit (b)
Average
price
£
£m
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
For the year ended 31 March 2011
Service
Internal Wholesale extension services 10Mbit/s rental
External Wholesale extension services 10Mbit/s rental
34
54
34
32,846 le
21,055 le
53,901
1,646.22
1,631.64
2,475.73
2,475.73
1,300.94
1,300.94
4,856.91
4,856.91
0.66
0.66
35
64
35
29,411 le
16,127 le
45,539
2,183.77
2,141.21
2,581.97
2,581.97
1,380.65
1,380.65
5,026.89
5,026.89
0.85
0.83
13
27
13
4,591 le
2,324 le
6,915
5,863.81
5,499.64
3,739.03
3,739.03
2,313.33
2,313.33
6,750.06
6,750.06
1.57
1.47
3
11
3
(u1)
(u1)
(s1)
(s1)
(u)
(u)
(u)
(u)
(u)
(u)
n/a
n/a
3
1
3
1,586 le
4,142 le
5,728
855.22
822.57
805.22
805.22
738.94
738.94
2,654.32
2,654.32
1.06
1.02
5
2
5
2,322 le
4,766 le
7,088
1,028.16
978.23
809.63
809.63
743.07
743.07
2,661.91
2,661.91
1.27
1.21
2
2
2
666 le
936 le
1,602
2,999.29
2,141.05
850.28
850.28
781.10
781.10
2,731.93
2,731.93
3.53
2.52
1
0
1
(t)
(t)
(t)
(t)
(u)
(u)
(u)
(u)
(u)
(u)
n/a
n/a
54
Internal Wholesale extension services 100Mbit/s rental
External Wholesale extension services 100Mbit/s rental
64
Internal Wholesale extension services 1000Mbit/s rental
External Wholesale extension services 1000Mbit/s rental
27
Internal Wholesale extension services other bandwidth rental
External Wholesale extension services other bandwidth rental
11
Internal Wholesale extension services 10Mbit/s connection
External Wholesale extension services 10Mbit/s connection
1
Internal Wholesale extension services 100Mbit/s connection
External Wholesale extension services 100Mbit/s connection
2
Internal Wholesale extension services 1000Mbit/s connection
External Wholesale extension services 1000Mbit/s connection
2
Internal Wholesale extension services other bandwidth connection (t)
External Wholesale extension services other bandwidth connection (t)
0
52
152
13.5 %
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
Volume Unit (b)
£m
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
For the year ended 31 March 2011
External Backhaul extension services 1000Mbit/s rental
18
18
4,915
le
External Backhaul extension services other bandwidth rental
7
7
(u1)
(s1)
External Backhaul extension services connection
6
6
(u1)
(s1)
3,575.76
Other internal Ethernet connection
1
1
(u1)
(s1)
Other internal Ethernet rental
2
2
(u1)
(s1)
3,631.57
1,940.31
6,149.24
0.98
(ux)
Other external Ethernet connection
1
1
(u1)
(s1)
Other external Ethernet rental
5
5
(u1)
(s1)
6
34
6
15,772 circuits
3,478 circuits
19,250
2,183.40
1,785.05
1,617.25
1,617.25
1,260.57
1,260.57
4,732.43
4,732.43
1.35
1.10
9
32
9
8,241 circuits
2,496 circuits
10,738
3,875.46
3,553.29
3,611.04
3,611.04
1,677.32
1,677.32
7,433.02
7,433.02
1.07
0.98
Internal Ethernet Access Direct connection
External Ethernet Access Direct connection
34
Internal Ethernet Access Direct rental
External Ethernet Access Direct rental
32
External Ethernet Backhaul Direct connection
1
1
406
circuits
3,498.33
1,215.71
1,116.22
3,955.72
2.88
11
11
1,352
circuits
7,782.00
14,216.70
8,475.34
20,184.02
0.55
64
67
64
201,014
180,236
381,250
333.53
354.41
401.68
401.68
178.10
178.10
1,027.11
1,027.11
0.83
0.88
14
18
14
1
1
316.959018 237.436494
554
External Ethernet Backhaul Direct rental
Internal Main link rental charges
External Main link rental charges
67
Support Service
Equipment depreciation
Internal Excess construction charges
External Excess construction charges
Roundings
TOTAL
0
18
2 -
fibre km
fibre km
misc
(u1)
(u1)
53
Estimated equipment depreciation of £4m
(s1)
(s1)
Estimated matched cost of £11.2m (*)
Estimated matched cost of £8.8m (*)
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
Volume Unit (b)
£m
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
Restated for the year ended 31 March 2010 (h)
Service
Internal Wholesale extension services 10Mbit/s rental
External Wholesale extension services 10Mbit/s rental
75
39
36,532 le
19,418 le
55,950
2,040.50
2,005.61
1,675.41
1,675.41
628.46
628.46
3,041.50
3,041.50
1.22
1.20
Internal Wholesale extension services 100Mbit/s rental
External Wholesale extension services 100Mbit/s rental
58
28
24,992 le
12,213 le
37,205
2,313.46
2,273.25
1,719.82
1,719.82
656.61
656.61
3,126.88
3,126.88
1.35
1.32
Internal Wholesale extension services 1000Mbit/s rental
External Wholesale extension services 1000Mbit/s rental
24
8
4,117 le
1,518 le
5,635
5,819.71
5,554.59
2,097.62
2,097.62
914.27
914.27
3,861.61
3,861.61
2.77
2.65
Internal Wholesale extension services other bandwidth rental
External Wholesale extension services other bandwidth rental
13
2
16,808 le
351 le
17,159
746.63
6,815.20
1,731.71
1,731.71
660.74
660.74
3,106.67
3,106.67
0.43
3.94
Internal Wholesale extension services 10Mbit/s connection
External Wholesale extension services 10Mbit/s connection
8
5
6,914 le
4,587 le
11,501
1,097.39
995.98
3,322.59
3,322.59
2,919.80
2,919.80
6,462.39
6,462.39
0.33
0.30
Internal Wholesale extension services 100Mbit/s connection
External Wholesale extension services 100Mbit/s connection
13
6
10,196 le
5,115 le
15,311
1,239.42
1,099.81
3,224.47
3,224.47
2,829.91
2,829.91
6,165.69
6,165.69
0.38
0.34
Internal Wholesale extension services 1000Mbit/s connection
External Wholesale extension services 1000Mbit/s connection
9
2
1,598 le
754 le
2,352
5,557.25
2,201.10
9,267.84
9,267.84
8,090.94
8,090.94
16,410.49
16,410.49
0.60
0.24
(t)
(t)
(u)
(u)
(u)
(u)
(u)
(u)
n/a
n/a
1,582.63
1,633.96
689.39
2,327.98
0.97
2,847.78
2.17
n/a
Internal Wholesale extension services other bandwidth connection (t)
External Wholesale extension services other bandwidth connection (t)
<1
<1
(t)
(t)
External Backhaul extension services 100Mbit/s rental
8
5,272 le
External Backhaul extension services 1000Mbit/s rental
17
4,106 le
4,198.81
1,934.86
896.34
External Backhaul extension services other bandwidth rental (t)
<1
(t)
(t)
(u)
(u)
(u)
External Backhaul extension services 100Mbit/s connection (t)
<1
(t)
(t)
(u)
(u)
(u)
2,013.52
14,439.10
12,551.86
26,860.72
External Backhaul extension services 1000Mbit/s connection
2
1,192 le
External Backhaul extension services other bandwidth connection
2
(u1)
(s1)
10,445.50
9,019.28
18,010.39
<1
(t)
(t)
(u)
(u)
(u)
External Backhaul network services all bandwidth connection (t)
External Backhaul network services all bandwidth rental
6
876 circuits
54
6,335.60
1,693.44
615.98
2,551.16
n/a
0.14
n/a
n/a
3.74
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
Volume Unit (b)
£m
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
Restated for the year ended 31 March 2010 (h)
Internal Ethernet Access Direct connection
External Ethernet Access Direct connection
Internal Ethernet Access Direct rental (t)
External Ethernet Access Direct rental (t)
2
1
<1
<1
816 circuits
589 circuits
1,405
(t)
(t)
2,372.36
2,065.72
(t)
(t)
External Ethernet Backhaul Direct connection
1
302 circuits
4,575.00
External Ethernet Backhaul Direct rental
6
759 circuits
7,782.00
Internal Other Ethernet connection
External Other Ethernet connection
2
1
257 circuits
566 circuits
823
8,297.79
2,545.33
Internal Other Ethernet rental
External Other Ethernet rental (t)
1
<1
583 circuits
(t)
2,120.20
(t)
Internal Main link rental charges
External Main link rental charges
64
61
Support Service
Equipment depreciation
Internal Excess construction charges
External Excess construction charges
Roundings
159,835 fibre km
154,497 fibre km
314,332
12
11
319.04
319.04
155.39
155.39
826.31
826.31
Estimated equipment depreciation of £3.3m
(u1)
(u1)
2
489
TOTAL
(b)
(sx)
(ux)
(t)
(h)
(*)
(u)
400.95
393.91
(U)
See glossary for volume unit descriptors.
This service comprises a number of individual prices as indicated by the value of x.
This service comprises a number of individual volumetrics as indicated by the value of x.
Revenue for this service is <£1m and hence shown within roundings as agreed with Ofcom. Where revenue is immaterial, no volumes or prices are shown.
See Section 4 - Basis of Preparation.
This component is attributed on a % basis so no volume or unit cost is derivable.
Costs associated with these services are immaterial and included within the above reported AISBO services and hence not disclosed separately.
55
(s1)
(s1)
Estimated matched cost of £8.0m (*)
Estimated matched cost of £7.0m (*)
1.26
1.23
Section 7 - Review of Access Markets
Section 7.10 - Wholesale local access (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Wholesale local access
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
-
636
439
636
439
328
267
146
97
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
(15)
(236)
41
23
70
48
Return
£m
MCE
£m
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
66
240
1,633
950
4.1 %
25.4 %
FAC (see Unaudited
App 1.2)
(D)LRIC
£
£
Unaudited
DSAC
£
Average
price/FAC
Total CCA
operating
Roundings
costs
£m
£m
-
570
199
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Volume Unit (b)
Revenue
£m
Cost orientation
Average
price
£
For the year ended 31 March 2011
Service
MPF New Provides
39
39
606,451
MPF Single Migrations
47
47
4
4
MPF Buk Migrations
lines
64.41
43.99
41.36
61.83
1.46
1,223,557
conns
38.64
37.40
35.14
52.51
1.03
102,908
conns
34.80
25.01
23.49
36.45
1.39
MPF Ceases
5
5
646,855
MPF Rentals
334
334
3,722,033
MPF Room Build
19
19
1,527
MPF Hostel Rentals
62
62
MPF Tie Cables
24
SMPF New Provides
SMPF Single Migrations
Ceases
7.49
7.65
7.17
13.88
0.98
89.75
128.75
60.40
162.01
0.70
rooms
12,437.41
177.55
164.54
340.20
70.05
12,845
hostels
4,844.58
6,061.49
5,458.62
8,411.95
0.80
24
41,134
cables
577.62
500.04
226.37
559.53
1.16
27
27
706,128
conns
38.64
31.59
29.64
45.16
1.22
lines
11
11
293,181
conns
38.64
37.00
34.73
52.11
1.04
SMPF Bulk Migrations
4
4
123,975
conns
33.14
25.27
23.70
36.90
1.31
SMPF Ceases
6
6
558,223
Ceases
11.34
8.61
8.05
15.18
1.32
SMPF Rentals
53
53
3,480,485
lines
15.36
10.28
8.41
15.89
1.49
1
1
636
636
Roundings
TOTAL
56
130
13.7 %
Section 7 - Review of Access Markets
Section 7.10 - Wholesale local access (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Volume Unit (b)
Revenue
£m
Cost orientation
Average
price
£
FAC (see Unaudited
App 1.2)
(D)LRIC
£
£
Unaudited
DSAC
£
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Service
External MPF Connections
External MPF Rentals
External MPF Room Build
58
1,857,350 lines
31.39
29.52
27.23
41.39
1.06
188
2,198,228 lines
85.46
85.49
52.93
107.14
1.00
11,723.66
400.34
359.44
745.41
29.28
7
632 rooms
External MPF Hostel Rentals
52
10,091 hostels
5,190.52
4,217.41
3,603.80
6,008.06
1.23
External MPF Tie Cables
13
26,373 cables
476.89
335.21
314.99
426.91
1.42
External SMPF Connections
59
2,259,796 conns
26.06
25.63
23.70
32.65
1.02
External SMPF Rentals
62
3,945,687 lines
15.60
13.50
11.45
20.41
1.16
Roundings
TOTAL
(b)
(h)
439
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
57
Section 8 - Review of Other Wholesale Markets
Section 8 - Review of Other Wholesale Markets
Section 8
Review of Other Wholesale Markets
58
Section 8 - Review of Other Wholesale Markets
Section 8.1 - Financial Performance in Other Wholesale Markets (Annex 8)
For the year ended 31 March 2011 (h)
Call origination on FPN networks
Single transit on FPN networks
Technical areas (Interconnect Circuits)
Fixed call termination
Wholesale trunk segments
Technical areas (Point of Handover)
Wholesale Broadband Access - Market 1 (h)
Wholesale Broadband Access - Market 2 (h)
Total Other Wholesale Markets
Re-presented for the year ended 31 March 2010 (h)
Call origination on FPN networks
Single transit on FPN networks
Technical areas (Interconnect Circuits)
Fixed call termination
Wholesale trunk segments
Technical areas (Point of Handover)
Wholesale Broadband Access
Total Other Wholesale Markets
Internal
Revenue
£m
143
0
18
66
94
0
201
139
External
Revenue
£m
46
4
37
100
14
8
165
101
Total
Revenue
£m
189
4
55
166
108
8
366
240
661
475
1,136
Internal
Revenue
£m
150
0
19
68
141
0
570
External
Revenue
£m
52
4
40
102
23
12
405
Total
Revenue
£m
202
4
59
170
164
12
975
948
638
1,586
CCA
Adjustments
£m
23
0
3
25
12
1
47
30
HCA Costs
£m
163
4
39
146
49
14
324
171
910
141
CCA
Adjustments
£m
(28)
0
(7)
(31)
(40)
(2)
(48)
HCA Costs
£m
178
4
47
139
55
12
805
1,240
(156)
(h) See Section 4 - Basis of Preparation.
59
Roundings
£m
0
0
0
0
0
0
0
0
0
Roundings
£m
0
0
0
0
0
0
0
0
Total CCA
Operating
costs
£m
186
4
42
171
61
15
371
201
1,051
Total CCA
Operating
costs
£m
150
4
40
108
15
10
757
1,084
Return
£m
3
0
13
(5)
47
(7)
(5)
39
85
Mean Capital
Employed
£m
361
11
62
380
212
28
476
225
Return on
MCE
%
0.9 %
(2.1)%
20.4 %
(1.2)%
22.4 %
(24.8)%
(0.9)%
17.7 %
1,755
4.8 %
Return
£m
52
0
19
62
149
2
218
Mean Capital
Employed
£m
372
11
77
388
247
22
1,301
Return on
MCE
%
14.4 %
(1.0)%
23.9 %
15.8 %
60.5 %
7.1 %
16.8 %
502
2,418
20.8 %
Return
excl.
reval.
adj. (h)
£m
17
0
11
23
108
1
178
338
ROCE
excl.
reval.
adj. (h)
%
4.6 %
(1.0)%
14.7 %
5.9 %
43.7 %
2.3 %
13.7 %
14.0 %
Section 8 - Review of Other Wholesale Markets
Section 8.2 - Review of Other Wholesale Markets (Annex 10 & 14)
Section 8.2.1 - Market Group Level Review (Annex 10)
Section 8.2.1 – Market Group Level Review (Annex 10)
Overall the markets for calls (call origination, call termination and single transit) continue to show a
decline in revenue, due to reducing volumes. Substitution of fixed PSTN calls continues with migration
to Voice over Internet Protocol (VoIP), mobile, LLU operators and other alternatives. As volumes reduce
there is a consequential reduction in the revenue for interconnect circuits, the fixed links that carry calls
traffic between the networks of different operators.
Following the Network Charge Controls in 2009/10, SMP status was removed from the Local-tandem
conveyance and transit market, and this service is now part of Wholesale Residual. The Single Transit
market is still subject to some SMP obligations, including the obligation not to unduly discriminate. In
assessing the level of financial reporting obligations, the review concluded that for the year end 31
March 2011, cost accounting obligations would be removed but accounting separation obligations
would remain.
Wholesale trunk segments are bought by Communications Providers in combination with partial private
circuits in the TISBO markets. Revenues have fallen significantly in the year due to significant price
reductions and customers continuing to rationalise their networks.
Points of Handover charges relate to the cost of providing interconnection between operators’
networks for TISBO services. Revenue has decreased in 2010/11 as customers have looked to
rationalise their networks and new prices have been introduced in July 2010 following industry
consultation. There were further price changes in this market in January 2011 to implement the Leased
Line Charge Control obligations.
Following Ofcom’s Wholesale Broadband Access Market Review in 2010, BT was found not to have
SMP or regulatory obligations in Wholesale Broadband Access Market 3. BT Wholesale continues to
have regulatory obligations in relation to the supply of WBA products in Markets 1 and 2 and is required
to report on an Equivalence of Input (EOI) basis in these markets.
Year on year comparison of revenues and costs on Markets 1 and 2 is cumbersome due to changes in
market boundaries, services included within the markets and reporting on an EOI basis rather than End
to End, with the same market information provided for 2009/10.
The wholesale broadband market has continued to show growth over the last year mostly driven by LLU
growth. BT DSL external wholesale volumes have declined as a result.
60
Section
(Annex 14)8 - Review of Other Wholesale Markets
Section 8.2.2 –- Market Level Financial Review of Other Wholesale SMP Markets
(Annex 14)
Key Market Changes
Market: Call Origination on Fixed Public Narrowband Networks
Call origination has declined steadily throughout the year driven by several factors:
Definition
The conveyance of a call originating on a customer’s exchange line from the remote concentrator to and
over the local exchange.
“Call Origination Services” are defined as any and all of the following specific services provided by the
Dominant Provider:
• Call origination (including operator assistance and emergency intermediate services); and
• Call origination (including emergency intermediate services).
Key Regulatory Changes
Market: Single Transit on Fixed Public Narrowband Networks
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. Ofcom concluded that BT still has SMP in the call origination
market going forward. Ofcom also determined that due to decline in the market BT no longer has an
obligation to supply FRIACO. As of 1 October 2009 the price control on both DLE FRIACO and Single
Tandem FRIACO fell away.
Definition
The Determination on PPP (Product Management, Policy and Planning) was implemented by Ofcom on
1 July 2004. The interconnect costs are pooled with the costs of providing end to end calls for BT’s retail
activities and the costs are recovered over all calls on an equivalent basis. Each physical call crossing BT’s
network is charged PPP only once. As PPP is incurred on all calls in markets where BT has SMP, it is
relevant for the Call Origination market.
(1 Oct 2009 – 30 Sept 2013)
RPI + 2.75%
DLE FRIACO
Not applicable
Single Tandem FRIACO
Not applicable
Product Management, Policy and
Planning (PPP)
RPI + 1.50%
While Inter-tandem conveyance (ITC) and Inter-tandem transit (ITT) are essentially transmission
services, single transit is a connection service that connects two operators who are not directly
connected. Please note that in 2005 Ofcom determined ITC and ITT to be competitive, and as such no
SMP was found.
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. Ofcom concluded that Single Transit is in a separate market to
that containing LTC and LTT. The final Statement confirmed Ofcom’s view that the market for Single
Transit is not effectively competitive and that the finding of SMP still applies. However, given the nature
of the market no price control remedy is needed. This means that the market is not bound by the RPIX formula beyond 30 September 2009.
Current NCC
Call Origination
Single transit is the service an operator provides when a call originates and terminates on networks
other than its own and the originating and terminating operators are directly connected at the same
transit operator’s tandem exchange. The call is therefore transited through a single tandem exchange.
Key Regulatory Changes
The charge controls for these services are as follows:
Service
• The ongoing migration of call origination minutes from fixed public narrowband networks to
mobile networks.
• The substitution impact of VoIP calls is growing and will potentially have a greater impact in the
future as Broadband Service Providers move towards double and triple play offerings in a move
to consolidate market share and grow revenue.
• Growth in Local Loop Unbundling (LLU) lines has eroded call origination volumes with major
players marketing double play offerings to their customer base, where voice services are
provided alongside high speed data.
The Single Transit market is still subject to some SMP obligations, including the obligation not to unduly
discriminate. In assessing the level of financial reporting obligations, the review concluded that for the
year end 31 March 2011, cost accounting obligations would be removed but accounting separation
obligations would remain.
The Determination on Product Management, Policy and Planning (PPP) was implemented by Ofcom on
1 July 2004. The interconnect costs are pooled with the costs of providing end to end calls for BT’s retail
activities and the costs are recovered over all calls on an equivalent basis. Each call crossing BT’s
network is charged PPP only once. As PPP is incurred on all calls in markets where BT has SMP, it is
relevant for the Single Transit market. To 30 September 2009 the price control applicable for PPP was
61
Section 8 - Review of Other Wholesale Markets
RPI+0.75%. From 1 October 2009 to 30 September 2013 the price control has been changed to
RPI+1.50%.
Key Market Changes
Key Market Changes
Overall the fixed line calls market is shrinking. The contraction of the fixed market is driven by
substitution of broadband and mobile.
Volumes of transit calls declined during the financial year ended 31 March 2011 primarily due to direct
connects between other operators.
Market: Technical Areas (Interconnect Circuits)
Definition
Ofcom has the ability to apply remedies to technical areas as part of the overall obligation that
addresses SMP in a particular market. Interconnect Circuits have been identified as an appropriate
technical area for the purpose of imposing appropriate regulatory remedies. Interconnect Circuits link
the exchanges of two interconnecting Communication Providers (CPs) in order to enable traffic to pass
between their networks.
Interconnect Circuit volumes have declined slowly throughout the year driven by several factors:
• Ongoing migration from fixed public narrowband networks to mobile networks.
• CPs building direct interconnection with other CPs and by-passing BT.
• CPs building their own 21CN networks and considering requirements for NGN interconnects
with the BT network.
• CPs rationalising their existing interconnections with BT.
• CPs moving to Wholesale Calls packages – removing the requirement for Interconnect Circuits.
• The substitution impact of VoIP calls is growing and will potentially have a greater impact on
traditional TDM Interconnect as Communication Providers move towards IP Interconnect.
Market: Fixed Call Termination
BT provides the following types of Interconnect Circuits:
• Customer-Sited Interconnect (CSI): BT provides a point of interconnection at the site of the
interconnecting CP by extending its network using a 2Mbit/s circuit;
• In-Span Interconnect (ISI): BT and the other CP build out their networks to a handover point
located between their switches. The handover point is normally close to the BT exchange and
therefore most of the build is the responsibility of the interconnecting CP;
• Interconnection Extension Circuit (IEC): IECs allow an interconnecting CP with an existing ISI to
extend this point of interconnection to a new building. In order to do this, BT provides a 2Mbit/s
circuit between the two buildings. An IEC is subject to the same per km charge as a CSI but has a
reduced fixed charge;
• Virtual Interconnect Circuit (VIC): VIC is an operationally efficient alternative to physical
interconnect at Digital Local Exchanges (DLE) allowing CPs to continue to benefit from Local
Exchange Segment (LES) rates whilst physically connecting to the Next Generation Switch
(NGS); and
• Ofcom determined that Interconnect Circuits should properly be considered as a Technical Area
as set out by the Commission.
Key Regulatory Changes
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. Ofcom concluded that BT still has SMP in the Technical Area for
Interconnect Circuits going forward. The price control applicable to this Technical Area was RPI-5.25%
up to 30 September 2009. From 1 October 2009 the price control changed to RPI+3.75%. These
controls will run until 30 September 2013.
Definition
The Review of fixed geographic call termination markets was concerned with the wholesale conveyance
service fixed geographic call termination only.
The economic market is defined as fixed geographic call termination on each individual Public
Electronic Communications Network (PECN). This definition is slightly narrower than that
recommended by the European Commission, which could be adjudged to include non-geographic call
termination services as well. The difference is deemed justifiable in that non-geographic call
termination markets are subject to different payment arrangements that are not purely ‘calling party
pays’ and, moreover, they are competitive in the UK.
After discussions with Ofcom it was agreed that due to the material changes that would be required for
the financial year ended 31 March 2005 the definition would be amended to include non-geographic
as well as geographic calls for the Current Cost Financial Statements 2005.
All PECNs that terminate fixed geographic calls have SMP in the provision of call termination services
when providing such services to all other PECNs. Ofcom therefore designated that each relevant PECN
has SMP.
Key Regulatory Changes
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. Ofcom concluded that BT still has SMP in the call termination
market going forward. The price control applicable to this market was RPI-5% up to 30 September
2009. From 1 October 2009 the price control changed to RPI+3.75%.
The Determination on PPP (Product Management, Policy and Planning) was implemented by Ofcom on
1 July 2004. The interconnect costs are pooled with the costs of providing end to end calls for BT’s retail
activities and the costs are recovered over all calls on an equivalent basis. Each physical call crossing BT’s
62
Section 8 - Review of Other Wholesale Markets
network is charged PPP only once. As PPP is incurred on all calls in markets where BT has SMP, it is
relevant for the Fixed Call Termination market. The price control applicable for PPP was RPI+0.75% up
to 30 September 2009. From 1 October 2009 the price control for PPP changed to RPI+1.50%.
LLU backhaul consists of LLU backhaul trunk and LLU backhaul link. LLU backhaul trunk is similar to the
trunk segment of a leased line and is hence a substitute for trunk segments. Therefore, LLU backhaul
trunk segments are considered to be part of the wholesale trunk segment market.
The charge controls for these services are summarised as follows:
Additionally, LLU backhaul services, RBS backhaul circuits and Netstream 16 Longline may, in
particular circumstances, involve some trunk segment services as part of the overall service. This would
correspond to intra core transmission on the BT network. This element for RBS and Netstream circuits
is included in the relevant TISBO market.
Service
Current NCC
Ofcom concluded that a national market exists for trunk segments and that BT has SMP in the national
market for wholesale trunk segments.
(1 Oct 2009 – 30 Sept 2013)
Call Termination
RPI + 3.75%
Product Management, Policy and
Planning (PPP)
RPI + 1.50%
SDSL based circuits fall into the market for low bandwidth traditional interface symmetric broadband
origination. Core conveyance relating to these services is carried across BT’s Asynchronous Transfer
Mode (ATM) network, rather than its SDH network. Ofcom therefore considered that its SMP finding is
equally applicable to trunk segments conveyed across the ATM network as well as the SDH network.
Key Regulatory Changes
In December 2008, Ofcom published its Final Statement on the Business Connectivity Market Review.
Ofcom found BT to continue to have SMP in the market for trunk segments at all bandwidths.
Key Market Changes
Overall the fixed line calls market is shrinking. The contraction of the fixed market is driven by
substitution of mobile and VoIP services.
Ofcom increased regulation in the trunk market by imposing a charge control and requiring prices to be
notified at 90 days. In addition, Ofcom changed the definition of trunk segments from one based on
links between two BT SDH Tier 1 nodes to one based on routes between defined major urban areas and
imposed additional Service Level Agreement/Service Level Guarantee requirements from December
2008.
Call termination has declined steadily throughout the year driven by several factors:
• The ongoing migration of call termination minutes from fixed public narrowband networks to
mobile networks. Given the recent reduction in Mobile Termination Rates (MTRs) this trend is
likely to accelerate.
• The substitution impact of VoIP is growing and will potentially have a greater impact in the
future as Broadband penetration and speed increase. This will improve the availability and
quality of VoIP services.
• Similarly growth in Local Loop Unbundling (LLU) lines is eroding call termination volumes as
major players move away from WLR.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI – X% charge control on Trunk services as a remedy to its finding of SMP
for BT. Note that there is a single overall TI basket comprising connection and rental for low bandwidth,
high bandwidth and very high bandwidth TISBO services as well as rental for Trunk services.
In addition, Ofcom determined starting charges for terminating and trunk segments and required the
introduction of separate Point of Handover rental charges to replace the current local end uplift factor
included in the rental price of external local ends. To balance the introduction of the new separate Point
of Handover charges, Ofcom required a corresponding reduction to external local end prices.
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010.
Market: Wholesale Trunk Segments
Definition
This market covers the provision of trunk segments across core transmission networks. These trunk
services are often used to provide a link between origination services where a communications provider
does not have available network to its nearest point of connection. As in the case of symmetric
broadband origination services, trunk segment services may be used to provide a wide range of
downstream retail services.
The particular services provided are the same as described above for symmetric broadband origination.
No stand alone trunk segment services were sold to third parties, although such a service may be
requested at some point in the future.
63
Section 8 - Review of Other Wholesale Markets
Key Regulatory Changes
Basket
Value of X
Sub Caps
TI Basket
RPI-3.25%
(up to 30
Sept 2010);
RPI - 0% sub-cap on sub-basket of
TISBO terminating segments.
TI-Trunk (all bandwidths – rental).
RPI-1.75%
(from 1 Oct
2010)
In December 2008 Ofcom published its Final Statement on the Business Connectivity Market Review.
Ofcom found BT to continue to have SMP in the following markets:
•
•
•
•
RPI + 5% sub-cap on each charge
(excluding POH charges).
RPI - 0% sub-cap on each charge
(POH charges only).
POC end and third party end
equipment charges.
RPI – 0%
No charge can increase more than 5%
in nominal terms.
All relevant ancillary services used in
the provision of TI services in scope
of the TI Basket.
RPI – 0%
None.
Low bandwidth TISBO up to and including 8Mbit/s;
High bandwidth TISBO above 8Mbit/s and including 34/45Mbit/s (excluding the CELA);
Very high bandwidth TISBO above 34/45Mbit/s and including 155Mbit/s (excluding CELA); and
Trunk segments at all bandwidths.
Ofcom increased regulation in the trunk market by imposing a charge control and requiring prices to be
notified at 90 days. In addition, Ofcom changed the definition of trunk segments from one based on
links between two BT SDH Tier 1 nodes to one based on routes between defined major urban areas and
imposed additional Service Level Agreement/Service Level Guarantee requirements from December
2008.
These controls run from 1 October 2009 to 30 September 2012.The values of X in the charge control
apply to BT’s prices after these adjustments have been made.
Key Market Changes
There is significant competition on major trunk routes. Customers continue to rationalise their networks
which has resulted in a fall in the average trunk distance per circuit. These factors have contributed to
a material reduction in revenue.
There were price changes in this market in October 2010 and January 2011 to meet the charge control
obligations.
Market: Technical Areas (Point of Handover)
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI – X% charge control on TISBO services as a remedy to its finding of SMP
for BT. Note that there is a single overall TI basket comprising connection and rental for low bandwidth,
high bandwidth and very high bandwidth TISBO services as well as rental for Trunk services.
In addition, Ofcom determined starting charges for terminating and trunk segments and required the
introduction of separate Point of Handover rental charges to replace the current local end uplift factor
included in the rental price of external local ends. To balance the introduction of the new separate Point
of Handover charges, Ofcom required a corresponding reduction to external local end prices.
On 2 September 2009, Cable & Wireless lodged an appeal with the Competition Appeal Tribunal
contesting certain parts of Ofcom’s Leased Line Charge Control Statement. The Tribunal issued a
direction on 20 September 2010 directing the controlling percentage for the TI basket to be amended
to RPI-1.75% from 1 October 2010.
Basket
Value of X
Sub Caps
TI Basket
RPI-3.25% (up to
30 Sept 2010);
RPI - 0% sub-cap on sub-basket
of TISBO terminating segments.
RPI-1.75% (from 1
Oct 2010)
RPI + 5% sub-cap on each charge
(excluding POH charges).
Definition
Point of Handover (PoH) is a Technical Area associated with the Traditional Interface Symmetric
Broadband Origination (TISBO) market, rather than a market in itself. It is a necessary technical function
to enable network interconnection, in order to allow the provision of wholesale products in the TISBO
market.
In all TISBO markets where BT has SMP BT is required to provide PoH services in two varieties: Customer
Sited Handover (CSH) and In-Span Handover, including ISH Extension. When providing CSH, BT delivers
TISBO services to the premises of its wholesale customers. When providing ISH, BT and the wholesale
customer connect their networks at a notional mid-point.
64
RPI - 0% sub-cap on each charge
(POH charges only).
POC end and third party end
equipment charges.
RPI – 0%
No charge can increase more
than 5% in nominal terms.
All relevant ancillary services
used in the provision of TI
services in scope of the TI
Basket.
RPI – 0%
None
Section 8 - Review of Other Wholesale Markets
Key Market Changes
These controls run from 1 October 2009 to 30 September 2012. The values of X in the charge control
apply to BT’s prices after these adjustments have been made.
Key Market Changes
Changes reflected in the market include customers looking to rationalise their networks, i.e. reduce the
number of sites and consequently points of handover, and instead increase the bandwidth to remaining
sites. New prices were introduced in July 2010 following Industry consultation. There were further price
changes in this market in January 2011 to implement the Leased Line Charge Control LLCC obligations.
BT has migrated most of its 20C IPstream volumes to the IPstream Connect platform: this has benefited
customers in terms of common handover arrangements with 21CN, and should ease future migration
to the 21CN platform. BT’s Datastream product has shown a significant decline in the year, driven by
migration to LLU and to alternative BT products.
BT’s end user rental prices for 20C IPstream (max and max premium) reduced by 29p per month from
April 2010.
Market: Wholesale Broadband Access: Market 2
Market: Wholesale Broadband Access: Market 1
Definition
Definition
Wholesale Broadband Access relates to asymmetric broadband access and any backhaul as necessary to
allow interconnection with other Communications Providers which provides an always-on capability,
allows both voice and data service to be used simultaneously and provides data at speeds greater than
a dial-up connection. This includes both business and residential customers in the UK.
Wholesale Broadband Access is split into three geographic markets based on the Ofcom December
2010 Market Review final Statement. Market 3 relates to those geographic areas covered by exchanges
where there are four or more operators or where there are three operators and BT’s share is less than
50% (77.6% of premises). BT does not have SMP or regulatory obligations in Wholesale Broadband
Access Market 3.
Market 1 relates to BT exchange areas where only BT provides Wholesale Broadband Access (11.7% of
premises).
Wholesale Broadband Access relates to asymmetric broadband access and any backhaul as necessary to
allow interconnection with other Communications Providers which provides an always-on capability,
allows both voice and data service to be used simultaneously and provides data at speeds greater than
a dial-up connection. This includes both business and residential customers in the UK.
Wholesale Broadband Access is split into three geographic markets based on the Ofcom December
2010 Market Review final Statement. Market 3 relates to those geographic areas covered by exchanges
where there are four or more operators or where there are three operators and BT’s share is less than
50% (77.6% of premises). BT does not have SMP or regulatory obligations in Wholesale Broadband
Access Market 3.
Market 2 relates to BT exchange areas where two operators are present and exchanges where three
operators are present or forecast but where BT’s share is greater than or equal to 50% (10% of
premises).
Key Regulatory Changes
Key Regulatory Changes
BT Wholesale continues to have regulatory and Equivalence of Input (EOI) obligations in relation to the
supply of Wholesale Broadband Access products in Market 1.
The floors pricing commitment agreed with Ofcom in November 2006 expired on 31 December 2008.
The ceilings price commitment agreed with Ofcom expired on 31 December 2010.
In their final statement on the SMP review in December 2010, Ofcom confirmed that the new SMP
obligations applying to Wholesale Broadband products would include a cost orientation obligation on
BT in Market 1.
BT is required to report market 1 on an EOI basis as a result of the Ofcom February 2011 consultation
document ‘Changes to BT and KCOM’s Regulatory and Financial Reporting 2010/11 Update’. SMPF
and related upstream Openreach charges are incorporated into these markets on an Equivalence of
Input (EOI) basis (i.e. at tariff rates) charged from Wholesale Residual rather than at cost.
Ofcom are currently consulting on a new charge control that would apply to the IPstream Connect
product in Market1.
65
BT Wholesale continues to have regulatory and Equivalence of Input (EOI) obligations in relation to the
supply of Wholesale Broadband Access products in Market 2.
The floors pricing commitment agreed with Ofcom in November 2006 expired on 31 December 2008.
The ceilings price commitment agreed with Ofcom expired on 31 December 2010.
In their final statement on the SMP review in December 2010 Ofcom confirmed that the new SMP
obligations applying to Wholesale Broadband products would include a cost orientation obligation on
BT in Market 2. BT is also required to report the market on an EOI basis.
BT is required to report market 2 on an EOI basis as a result of the Ofcom February 2011 consultation
document ‘Changes to BT and KCOM’s Regulatory and Financial Reporting 20/11 Update’. SMPF and
related upstream Openreach charges are incorporated into these markets on an Equivalence of Input
(EOI) basis (i.e. at tariff rates) charged from Wholesale Residual rather than at cost.
Section 8 - Review of Other Wholesale Markets
Key Market Changes
BT has migrated most of its 20C IPstream volumes to the IPstream Connect platform: this has benefited
customers in terms of common handover arrangements with 21CN, and should ease future migration
to the 21CN platform. BT’s Datastream product has shown a significant decline in the year, driven by
migration to LLU and to alternative BT products.
BT’s end user rental prices for 20C IPstream (max and max premium) reduced by 29p per month from
April 2010.
66
Section 8 - Review of Other Wholesale Markets
Section 8.3 - Call origination on fixed public narrowband networks (Annex 13)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Call origination on fixed public narrowband networks
Summary
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
143
150
46
52
189
202
110
120
53
58
2011
2010
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
4
(52)
(3)
19
27
Total CCA
operating
Roundings
costs
£m
£m
-
186
150
Return
£m
MCE
£m
3
52
361
372
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
0.9 %
14.4 %
17
4.6 %
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non- discrimination
Cost orientation
NCC traaffic - millions of minutes (mm)
Evening
Average NCC rates - pence per minute (ppm)
Weekend
ppm
Weighted
Average
ppm
0.120
0.120
0.094
0.094
0.270
0.270
0.124
0.124
4,694
0.270
2,737
0.145
Weekend 24 hours
Day
ppm
Revenue
£m
Day
Internal Wholesale call originating local exchange segment PSTN and ISDN (excl OA)
External Wholesale call originating local exchange segment PSTN and ISDN (excl OA)
1
28
335
9,368
283
1,736
218
1,370
836
12,474
0.262
0.262
Internal Wholesale call originating local exchange segment (incl Operator Assistance)
External Wholesale call originating local exchange segment (incl Operator Assistance)
119
7
33,922
2,213
12,676
641
11,973
689
58,571
3,543
12
4,013
384
297
3
1,572
569
596
Evening
ppm
FAC (see
App 1.2)
Unaudited
(D)LRIC
Unaudited
Average
DSAC price/FAC
ppm
ppm
ppm
ppm
0.170
0.224
0.257
0.257
0.200
0.200
0.517
0.517
0.66
0.87
0.098
0.098
0.203
0.210
0.233
0.233
0.181
0.181
0.483
0.483
0.87
0.90
0.124
0.098
0.247
0.279
0.218
0.550
0.89
0.066
0.052
0.108
0.162
0.114
0.347
0.67
For the year ended 31 March 2011
Service
Internal Wholesale call originating local exchange segment (ISDN) (incl OA)
Internal Wholesale call origination local exchange Stick
Internal Wholesale call origination local exchange Stick (ISDN)
Internal Wholesale PPP
External Wholesale PPP
Roundings
0
177
10
10
197
0.145
0.066
0.052
0.136
0.191
0.133
0.387
0.71
8
10
44,368
57,406
14,686
22,883
13,662
18,355
72,716
98,644
0.014
0.014
0.006
0.006
0.005
0.005
0.011
0.010
0.013
0.013
0.011
0.011
0.026
0.026
0.82
0.81
1
189
67
Section 8 - Review of Other Wholesale Markets
Section 8.3 - Call origination on fixed public narrowband networks (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non- discrimination
Cost orientation
NCC tra
affic - millions of minutes (mm)
Revenue
£m
Day
Service
Internal Wholesale call originating local exchange segment PSTN and ISDN (excl OA)
External Wholesale call originating local exchange segment PSTN and ISDN (excl OA)
3
33
720
10,879
640
2,541
491
1,965
Internal Wholesale call originating local exchange segment (incl Operator Assistance)
External Wholesale call originating local exchange segment (incl Operator Assistance)
124
8
34,402
2,224
17,136
781
12
4,198
Internal Wholesale call origination local exchange Stick
3
Internal Wholesale call origination local exchange Stick (ISDN)
0
9
11
Evening
Average NCC rates - pence per minute (ppm)
Weekend 24 hours
Day
ppm
Evening
ppm
Weekend
ppm
1,851
15,385
0.255
0.255
0.117
0.117
0.092
0.092
13,575
763
65,113
3,768
0.264
0.264
0.121
0.121
516
316
5,030
0.264
1,699
1,013
759
3,471
152
13
10
175
46,686
60,470
20,648
24,991
16,099
19,722
83,433
105,183
Weighted
Average
ppm
FAC (see
App 1.2)
Unaudited
(D)LRIC
Unaudited
Average
DSAC price/FAC
ppm
ppm
ppm
ppm
0.164
0.211
0.201
0.201
0.156
0.156
0.403
0.403
0.81
1.05
0.095
0.095
0.191
0.200
0.201
0.201
0.156
0.156
0.404
0.404
0.95
1.00
0.121
0.095
0.239
0.208
0.161
0.416
1.15
0.131
0.060
0.047
0.092
0.134
0.091
0.281
0.69
0.131
0.060
0.047
0.121
0.141
0.097
0.295
0.85
0.014
0.014
0.006
0.006
0.005
0.005
0.010
0.010
0.019
0.019
0.018
0.018
0.033
0.033
0.54
0.54
Restated for the year ended 31 March 2010 (h)
Internal Wholesale call originating local exchange segment (ISDN) (incl OA)
Internal Wholesale PPP
External Wholesale PPP
Roundings
(1)
202
(b)
(h)
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
68
Section 8 - Review of Other Wholesale Markets
Section 8.4 - Single transit on fixed public narrowband networks (Annex 13)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Single transit on fixed public narrowband networks
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
-
4
4
4
4
2
2
2
2
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
-
-
-
Total CCA
operating
Roundings
costs
£m
£m
-
4
4
Return
£m
MCE
£m
-
11
11
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
(2.1)%
(1.0)%
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non- discrimination
NCC traaffic - millions of minutes (mm)
Evening
Average NCC rates - pence per minute (ppm)
Weekend 24 hours
Revenue
£m
Day
Internal Wholesale single transit segment PSTN & ISDN
External Wholesale single transit segment PSTN & ISDN
0
4
134
12,420
48
5,306
32
4,345
214
22,071
Roundings
-
175
13,237
99
5,952
56
4,780
330
23,969
Day
ppm
Evening
ppm
Weekend
ppm
Weighted
Average
ppm
0.009
0.009
0.016
0.018
For the year ended 31 March 2011
Service
0.024
0.024
0.011
0.011
4
Restated for the year ended 31 March 2010 (h)
Service
Internal Wholesale single transit segment PSTN & ISDN
External Wholesale single transit segment PSTN & ISDN
0
4
Roundings
4
(b)
(h)
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
69
0.024
0.024
0.011
0.011
0.009
0.009
0.018
0.018
-
(1.0)%
Section 8 - Review of Other Wholesale Markets
Section 8.5 - Technical areas (Interconnect Circuits)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Technical areas (Interconnect Circuits)
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
18
19
37
40
55
59
27
33
12
14
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
1
(10)
(1)
2
4
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
13
19
62
77
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
-
42
40
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Cost orientation
Revenue
£m
Volume Unit (b)
Average
price
£
For the year ended 31 March 2011
Service
Customer Sited Interconnect (end to end circuit)
External Wholesale standard CSI connection (v)
External Wholesale standard CSI rental - fixed (v)
External Wholesale standard CSI rentals - per km (v)
2
9
5
2
9
5
1,230 circuits
7,107 circuits
214,987 km
1,790.74
1,196.52
22.80
7,131.36
675.78
11.79
6,346.77
529.36
7.37
12,015.58
1,175.29
29.62
0.25
1.77
1.93
In Span Interconnect with Interconnect Extension Circuit (end to end circuit)
External Wholesale IEC connections
External Wholesale IEC rentals
External Wholesale IEC rentals - per km
0
7
7
0
7
7
253 circuits
12,149 circuits
302,389 km
968.57
585.84
22.80
5,039.96
338.27
10.76
4,223.94
300.20
6.44
7,671.61
559.66
26.94
0.19
1.73
2.12
In Span Interconnect
External Wholesale intra-building circuits connections
External Wholesale intra-building circuits rentals
External Wholesale ISI rentals
1
3
0
1
3
0
1,731 circuits
35,945 circuits
7,954 100m
808.36
92.88
0.00
4,390.67
67.42
287.85
3,694.55
57.45
255.70
6,724.99
130.74
460.94
0.18
1.38
0.00
External Nominated ISI - per km
2
2
30,325 100m
68.75
72.75
31.27
217.35
0.95
External Wholesale rearrangements
1
1
1,391 circuits
412.87
1,231.07
1,172.18
2,344.92
0.34
9
8,539 circuits
1,103.64
540.91
409.16
891.45
2.04
22.80
10.40
6.07
26.45
2.19
92.88
26.11
22.22
51.59
3.56
Internal Wholesale standard CSI rental - fixed
9
Internal Wholesale standard CSI rentals - per km
6
6
Internal Wholesale intra-building circuits rentals
2
2
Roundings
1
-
1
18.000
37.000
55
TOTAL
258,305 km
21,886 circuits
70
Return Return on
excl. MCE excl.
Return
reval.
reval.
on
MCE adjs. (h)
adjs. (h)
£m
20.4 %
23.9 %
11
14.7 %
Section 8 - Review of Other Wholesale Markets
Section 8.5 - Technical areas (Interconnect Circuits)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Cost orientation
Revenue
£m
Volume Unit (b)
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Service
Customer Sited Interconnect (end to end circuit)
External Wholesale standard CSI connection (v)
External Wholesale standard CSI rental - fixed (v)
External Wholesale standard CSI rentals - per km (v)
2
8
5
970 circuits
6,748 circuits
204,127 km
1,790.74
1,196.52
22.80
6,130.81
639.54
5.56
5407.84
471.43
3.42
9905.54
964.19
12.17
0.29
1.87
4.10
In Span Interconnect with Interconnect Extension Circuit (end to end circuit)
External Wholesale IEC connections
External Wholesale IEC rentals
External Wholesale IEC rentals - per km
0
8
8
451 circuits
13,862 circuits
345,025 km
968.57
585.84
22.80
3,805.39
451.30
11.47
3217.59
379.75
6.34
5691.54
767.18
27.63
0.26
1.43
1.99
In Span Interconnect
External Wholesale intra-building circuits connections
External Wholesale intra-building circuits rentals
External Wholesale ISI rentals
3
3
0
3,842 circuits
34,320 circuits
7,954 100m
808.36
92.88
0.00
3,278.01
136.26
248.09
2740.39
114.23
205.33
4742.89
244.76
430.30
0.25
0.68
0.00
External Nominated ISI - per km
2
29,900 100m
68.75
62.98
27.49
175.27
1.09
External Wholesale rearrangements
1
2,906 circuits
412.87
1,201.05
1122.48
2173.31
0.34
10
9,134 circuits
1,103.64
503.28
357.20
719.43
2.39
22.80
5.56
3.42
12.17
4.10
92.88
89.07
74.67
160.00
1.04
Restated for the year ended 31 March 2010 (h)
Internal Wholesale standard CSI rental - fixed
Internal Wholesale standard CSI rentals - per km
6
Internal Wholesale intra-building circuits rentals
2
Roundings
1
TOTAL
(b)
(v)
(h)
276,152 km
18,278 circuits
59
See glossary for volume unit descriptors.
Revenues shown are prior to the 'revenue share' between BT and OCPs.
See Section 4 - Basis of Preparation.
71
Section 8 - Review of Other Wholesale Markets
Section 8.6 - Fixed call termination (Annex 13)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Fixed call termination
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
66
68
100
102
166
170
92
83
54
56
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
5
(55)
(1)
(4)
21
28
Total CCA
operating
Roundings
costs
£m
£m
-
171
108
Return
£m
(5)
62
MCE on
£m
380
388
Return Return on
excl. MCE excl.
Return
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
(1.2)%
15.8 %
23
5.9 %
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non- discrimination
Cost orientation
NCC traaffic - millions of minutes (mm)
Evening
Average NCC rates - pence per minute (ppm)
Weekend
ppm
Weighted
Average
ppm
0.108
0.108
0.085
0.085
0.237
0.108
2,737
0.145
197
0.145
Weekend 24 hours
Day
ppm
Evening
ppm
Revenue
£m
Day
57
100
19,440
32,302
5,725
13,526
5,853
10,577
31,018
56,405
0.237
0.237
5
2,142
152
150
2,444
Internal Wholesale call termination local exchange stick
3
1,572
569
596
Internal Wholesale call termination local exchange stick (ISDN)
0
177
10
10
20,034
33,443
8,918
14,234
6,881
10,984
35,833
58,661
0.230
0.230
0.105
0.105
FAC (see Unaudited
App 1.2)
(D)LRIC
Unaudited
Average
DSAC price/FAC
ppm
ppm
ppm
ppm
0.185
0.178
0.225
0.225
0.172
0.172
0.443
0.443
0.82
0.79
0.085
0.220
0.271
0.210
0.512
0.81
0.066
0.052
0.108
0.162
0.114
0.347
0.67
0.066
0.052
0.136
0.191
0.133
0.387
0.71
0.083
0.083
0.171
0.172
0.190
0.190
0.146
0.146
0.375
0.375
0.90
0.90
For the year ended 31 March 2011
Service
Internal Wholesale call termination local exchange segment
External Wholesale call termination local exchange segment
Internal Wholesale call termination local exchange segment (ISDN)
Roundings
1
166
Restated for the year ended 31 March 2010 (h)
Service
Internal Wholesale call termination local exchange segment
External Wholesale call termination local exchange segment
61
101
Internal Wholesale call termination local exchange segment (ISDN)
4
1,718
191
135
2,044
0.230
0.105
0.083
0.209
0.197
0.151
0.386
1.06
Internal Wholesale call termination local exchange stick
3
1,699
1,013
759
3,471
0.131
0.060
0.047
0.092
0.134
0.091
0.281
0.69
Internal Wholesale call termination local exchange stick (ISDN)
0
152
13
10
175
0.131
0.060
0.047
0.121
0.141
0.097
0.295
0.85
Roundings
1
TOTAL
(b)
(h)
170
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
72
Section 8 - Review of Other Wholesale Markets
Section 8.7 - Wholesale trunk segments (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disccrimination obligations
Wholesale trunk segments
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
94
141
14
23
108
164
19
24
30
31
Holding
(gain)/loss Supp. Dep.
£m
£m
4
(63)
(1)
(3)
Other adjs.
£m
9
26
Total CCA
operating
Roundings
costs
£m
£m
-
61
15
Return
£m
MCE
£m
47
149
212
247
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
Volume Unit (b)
£m
Cost orientation
Average
price
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
£
Average
price/FAC
For the year ended 31 March 2011
Service
Partial and Private circuits 2Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
44
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
Partial and Private circuits 34/45Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
9
19
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
Partial and Private circuits 140/155Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
Internal Partial and Private circuits 622Mbit/s - trunk
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
Roundings
TOTAL
1,048,321
km
40.80
1.61
42.41
24.89
16.21
57.45
1.70
9
219,243
km
40.80
1.61
42.41
24.89
16.21
57.45
1.70
km
377.95
2.41
380.36
230.21
149.86
529.69
1.65
230.21
149.86
529.69
1.65
19
3
11
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
44
0
17
2
1
48,813
3
8,871
km
377.95
2.41
380.36
11
52,797
km
201.24
4.13
205.37
251.29
143.30
627.96
0.82
251.29
143.30
627.96
0.82
1,263.84
699.57
3,209.60
0.74
0
1,734
km
201.24
4.13
205.37
17
18,780
km
929.62
2
1
(u3)
(u3)
1
1
2
94
14
108
(s5)
(s5)
73
Estimated cost of £1.1
Estimated cost of £0.4
Return on
Return Return excl. MCE excl.
on
reval.
reval.
MCE
adjs. (h)
adjs. (h)
£m
22.4 %
60.5 %
108
43.7 %
Section 8 - Review of Other Wholesale Markets
Section 8.7 - Wholesale trunk segments (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Revenue
Cost orientation
Average
price
Volume Unit (b)
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
Average
price/FAC
£
£
£
£
1,057,728 km
69.53
1.48
71.01
26.00
18.28
50.60
2.73
26.00
18.28
50.60
2.73
£m
Restated for the year ended 31 March 2010 (h)
Service
Partial and Private circuits 2Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
75
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
16
225,159 km
69.53
1.48
71.01
Partial and Private circuits 34/45Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
31
57,177 km
541.92
2.22
544.14
216.48
148.14
391.85
2.51
216.48
148.14
391.85
2.51
1.01
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
6
11,824 km
541.92
2.22
544.14
Partial and Private circuits 140/155Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
14
51,724 km
256.45
5.32
261.77
259.53
157.42
545.44
0
1,880 km
256.45
5.32
261.77
259.53
157.42
545.44
1.01
16
17,145 km
958.50
1,135.67
648.27
2,651.65
0.84
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
Internal Partial and Private circuits 622Mbit/s - trunk
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
Roundings
TOTAL
(b)
(sx)
(ux)
(h)
4
1
(u3)
(u3)
(s3)
(s3)
1
164
See glossary for volume unit descriptors.
This service comprises a number of individual prices as indicated by the value of x.
This service comprises a number of individual volumetrics as indicated by the value of x.
See Section 4 - Basis of Preparation.
74
Estimated total cost £1.1m
Estimated total cost £0.3m
Section 8 - Review of Other Wholesale Markets
Section 8.8 - Technical areas (Point of Handover)(Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disccrimination obligations
Technical Areas (Point of Handover)
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
-
8
12
8
12
6
5
8
7
Holding
(gain)/loss Supp. Dep. Other adjs.
£m
£m
£m
(2)
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
(7)
2
28
22
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
2,943.98
1,880.92
1,770.39
2,363.28
1.57
2,634.84
3,688.78
3,473.01
4,580.73
0.71
1,966.28
1,293.50
1,216.51
1,677.88
1.52
4,405.77
3,041.29
2,860.43
3,936.76
1.45
(1)
(1)
2
1
-
15
10
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Volume Unit (b)
Revenue
£m
Cost orientation
For the year ended 31 March 2011
Service
External Customer Sited Handover connection
0
0
External Customer Sited Handover rental
2
2
53 conns
576 lines
2 conns
External In Span Handover connection
0
0
External In Span Handover rental
2
2
External 3rd Party POH Rental 64Kbit/s
1
1
13,934 le
51.46
62.81
57.55
103.78
0.82
External 3rd Party POH Rental 2Mbit/s non CLZ
3
3
51,822 le
57.46
208.04
117.08
379.16
0.28
External 3rd Party POH Rental 2Mbit/s CLZ
0
0
4,006 le
68.12
219.78
112.54
404.89
0.31
External 3rd Party POH Rental 34/45Mbit/s
0
0
1,256 le
215.67
1,434.63
620.59
2,651.75
0.15
External 3rd Party POH Rental 155Mbit/s
0
0
133 le
402.63
2,439.61
1,592.92
4,063.30
0.17
Roundings
-
-
TOTAL
8
8
558 lines
75
Return Return on
excl. MCE excl.
Return
reval.
reval.
on
MCE adjs. (h)
adjs. (h)
£m
(24.8)%
7.1 %
1
2.3 %
Section 8 - Review of Other Wholesale Markets
Section 8.8 - Technical Areas (Point of Handover)(continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrim
mination
Volume Unit (b)
Revenue
£m
Cost orientation
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Restated for the year ended 31 March 2010 (h)
Service
External Customer Sited Handover connection
0
External Customer Sited Handover rental
2
External In Span Handover connection
3
External In Span Handover rental
0
External 3rd Party POH Rental 64Kbit/s
1
16,821 le
External 3rd Party POH Rental 2Mbit/s non CLZ
5
External 3rd Party POH Rental 2Mbit/s CLZ
130 conns
1,463.86
710.72
649.62
850.39
2.06
428.69
662.36
605.42
792.53
0.65
44,749.17
22,670.95
20,722.11
27,126.45
1.97
541.13
1,401.70
1,281.21
1,677.18
0.39
50.07
40.41
36.26
69.02
1.24
59,164 le
85.12
110.83
65.52
178.45
0.77
0
3,737 le
85.12
113.91
62.87
181.14
0.75
External 3rd Party POH Rental 34/45Mbit/s
1
1,437 le
430.58
837.69
409.24
1,346.76
0.51
External 3rd Party POH Rental 155Mbit/s
0
137 le
801.08
1,563.28
1,070.11
2,295.65
0.51
Roundings
-
TOTAL
(b)
(h)
4,866 lines
57 conns
483 lines
12
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
76
Section 8 - Review of Other Wholesale Markets
Section 8.9 - Wholesale Broadband Access: Market 1 (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Wholesale broadband access market 1 - BT only operator
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
201
-
165
-
366
-
199
-
125
-
5
-
Supp. Dep. Other adjs.
£m
£m
(6)
-
48
-
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
(5)
-
476
-
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
-
371
-
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrrimination
Revenue
£m
Volume Unit (b)
Cost orientation
Average price
£
For the year ended 31 March 2011
Service
Internal End user access connection Mkt 1
EOI
WBA Input
11
277,235 conns
38.64
38.64
4.45
43.09
38.64
3.80
42.44
38.64
10.77
49.41
0.90
38.64
38.64
4.45
43.09
38.64
3.80
42.44
38.64
10.77
49.41
0.90
External user access connection Mkt 1
EOI
WBA Input
5
128,031 conns
External Datastream End user access Rental Mkt 1
EOI
WBA Input
5
51,297 Rentals
89.30
26.76
54.79
81.55
26.76
42.74
69.50
26.76
83.62
110.38
1.09
90
1,142,602 Rentals
78.71
31.11
77.73
108.84
31.11
62.78
93.89
31.11
112.35
143.46
0.72
73
930,410 Rentals
78.60
26.76
77.72
104.48
26.76
62.77
89.53
26.76
112.32
139.08
0.75
1,226.42
0.00
422.22
422.22
0.00
295.29
295.29
0.00
2,205.87
2,205.87
2.90
0.00
80.57
80.57
0.00
472.38
472.38
1.06
0.00
89.83
89.83
0.00
561.76
561.76
0.97
Internal IPstream Connect End user access Rental Mkt 1
EOI
WBA Input
External IPstream Connect End user access Rental Mkt 1
EOI
WBA Input
External Datastream Virtual Paths Mkt 1
EOI
WBA Input
16
13,417 VP
Internal IPstream Connect Bandwidth Mkt 1
EOI
WBA Input
90
682,580 Bandwidth
131.98
0.00
124.36
124.36
59
442,579 Bandwidth
134.37
0.00
138.23
138.23
External IPstream Connect Bandwidth Mkt 1
EOI
WBA Input
77
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
(0.9)%
-
-
Section 8 - Review of Other Wholesale Markets
Section 8.9 - Wholesale Broadband Access: Market 1 (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrrimination
Revenue
£m
Volume Unit (b)
Cost orientation
Average price
£
For the year ended 31 March 2011
Internal Ancillary Charges and Other Mkt 1
EOI
WBA
0
11
(u1)
External Ancillary Charges and Other Mkt 1
EOI
WBA
0
6
(u1)
Roundings
-
TOTAL
366
For the year ended 31 March 2010
N/a
(h) See Section 4 - Basis of Preparation.
(un) This service comprises a number of individual volumetrics and prices as indicated by the value of n.
78
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Section 8 - Review of Other Wholesale Markets
Section 8.10 - Wholesale Broadband Access: Market 2 (Annex 11)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-disscrimination obligations
Wholesale broadband access market 2 - 2 to 3 principal operators
Summary
2011
2010
Internal
Revenue
£m
External
Revenue
£m
Revenue
(note 1)
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
139
-
101
-
240
-
114
-
57
-
3
-
Supp. Dep. Other adjs.
£m
£m
(3)
-
30
-
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
39
-
225
-
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
Average
price/FAC
-
201
-
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrrimination
Revenue
Volume Unit (b)
Cost orientation
Average price
£
£m
£
£
£
For the year ended 31 March 2011
Service
Internal End user access connection Mkt 2
EOI
WBA Input
8
211,423 conns
38.64
38.64
4.45
43.09
38.64
3.80
42.44
38.64
10.77
49.41
0.90
4
104,106 conns
38.64
38.64
4.45
43.09
38.64
3.80
42.44
38.64
10.77
49.41
0.90
External user access connection Mkt 2
EOI
WBA Input
External Datastream End user access Rental Mkt 2
EOI
WBA Input
4
47,513 Rentals
89.30
27.14
41.06
68.20
27.14
30.75
57.89
27.14
65.74
92.88
1.31
60
762,892 Rentals
78.93
30.77
54.18
84.95
30.77
42.20
72.97
30.77
81.68
112.45
0.93
43
543,767 Rentals
78.72
27.14
54.16
81.30
27.14
42.19
69.33
27.14
81.64
108.78
0.97
1,226.42
0.00
370.27
370.27
0.00
261.66
261.66
0.00
1,845.32
1,845.32
3.31
Internal IPstream Connect End user access Rental Mkt 2
EOI
WBA Input
External IPstream Connect End user access Rental Mkt 2
EOI
WBA Input
External Datastream Virtual Paths Mkt 2
EOI
WBA Input
11
8,856 VP
Internal IPstream Connect Bandwidth Mkt 2
EOI
WBA Input
60
455,744 Bandwidth
131.98
0.00
100.69
100.69
0.00
64.74
64.74
0.00
324.25
324.25
1.31
35
258,660 Bandwidth
134.37
0.00
106.48
106.48
0.00
68.67
68.67
0.00
360.05
360.05
1.26
External IPstream Connect Bandwidth Mkt 2
EOI
WBA Input
79
Return Return on
Return
excl. MCE excl.
on
reval.
reval.
MCE adjs. (h)
adjs. (h)
£m
17.7 %
-
-
-
Section 8 - Review of Other Wholesale Markets
Section 8.10 - Wholesale Broadband Access: Market 2 (continued)
Note 1: Comparison of average internal and external
charges with each other and with FAC
Non-discrrimination
Revenue
Volume Unit (b)
Cost orientation
Average price
£m
£
For the year ended 31 March 2011
Internal Ancillary Charges and Other Mkt 2
EOI
WBA
0
11
(u1)
External Ancillary Charges and Other Mkt 2
EOI
WBA
0
4
(u1)
Roundings
TOTAL
240
For the year ended 31 March 2010
N/a
(h) See Section 4 - Basis of Preparation.
(un) This service comprises a number of individual volumetrics and prices as indicated by the value of n.
80
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
Section 8 - Review of Other Wholesale Markets
Section 8.11 - Wholesale Broadband Access 2010 (Annex 12)
Market summary
Purpose of statement: to provide more detail on financial performance and first order tests of compliance with cost orientation and non-discriminnation obligations
Wholesale Broadband Access *
Summary
2010
Internal
Revenue
External
Revenue
£m
£m
570
405
Revenue (note
Roundings
1)
£m
£m
-
975
Operating
costs Depreciation
£m
£m
469
Holding
(gain)/loss
£m
Supp. Dep.
£m
Other adjs.
£m
(65)
(2)
19
336
Total CCA
operating
Roundings
costs
£m
£m
-
Non-discrimination
Note 1: Comparison of average internal and external charges
Revenue
Volume Unit (b)
£m
Average price
£
Wholesale Broadband Access Market 1 - BT only operator
For the year ended 31 March 2010
Service
Internal BT only IPstream end user access connection
External BT only IPstream end user access connection
Internal BT only IPstream end user access rental
External BT only IPstream end user access rental
Internal BT only Datastream end user access connection
External BT only Datastream end user access connection
Internal BT only Datastream end user access rental
External BT only Datastream end user access rental
14
7
121
101
1
14
388,043 conns
187,918 conns
1,444,378 lines
1,228,398 lines
693 conns
11,138 conns
9,115 lines
164,473 lines
36.16
36.09
83.80
82.42
36.01
35.92
86.47
86.47
Internal BT only backhaul circuits (excluding Virtual Paths) (m)
35
216,104 circuits
163.32
External BT only backhaul circuits (excluding Virtual Paths) (m)
39
237,453 circuits
163.32
219,324 conns
102,272 conns
36.11
36.06
834,687 lines
475,424 lines
84.14
83.54
Roundings
Total geographic revenue for Wholesale Broadband Access Market 1
(excludes non geographic revenues - see below)
332
Wholesale Broadband Access Market 2 - 2 to 3 principal operators
For the year ended 31 March 2010
Service
Internal 2-3 operators IPstream end user access connection
External 2-3 operators IPstream end user access connection
Internal 2-3 operators IPstream end user access rental
External 2-3 operators IPstream end user access rental
Internal 2-3 operators Datastream end user access connection
External 2-3 operators Datastream end user access connection
8
4
70
40
-
556 conns
9,044 conns
Internal 2-3 operators Datastream end user access rental
External 2-3 operators Datastream end user access rental
1
13
7,174 lines
151,936 lines
Internal 2-3 operators backhaul circuits (excluding Virtual Paths) (m)
External 2-3 operators backhaul circuits (excluding Virtual Paths) (m)
21
19
127,854 circuits
115,935 circuits
Roundings
Total geographic revenue for Wholesale Broadband Access Market 2
(excludes non geographic revenues - see below)
35.93
35.81
86.47
86.47
163.32
163.32
176
81
757
Return
Return
£m
MCE
£m
218
1,301
on
MCE
16.8 %
Return on
Return excl. MCE excl.
reval.
reval.
adjs. (h)
adjs. (h)
£m
178
13.7 %
Section 8 - Review of Other Wholesale Markets
Section 8.11 - Wholesale Broadband Access 2010 (continued)
Non-discrimination
Note 1: Comparison of average internal and external charges
Revenue
Volume Unit (b)
Average price
£m
£
Wholesale Broadband Access Market 3
(4 or more principal operators) and non geographic
For the year ended 31 March 2010
Service
Market 3 (excluding non-geographical)
Internal Virtual Paths handover (k)
External Virtual Paths handover (k)
250
0
4
(u5)
436 pipes
3,452 pipes
(s5)
571.93
1,103.14
Ancillary charges (migration, cessation, re-grades)
87
(u2)
(s2)
Internal Broadband conveyance in the UK
External Broadband conveyance in the UK
53
73
(u6)
(u6)
(s6)
(s6)
Roundings
467
WBA Total
* The market summary for the Wholesale Broadband Access Market includes geographical sub markets 1, 2 and 3.
(b) See glossary for volume unit descriptors.
(k) This service comprises a number of individual prices.
(m) Backhaul circuits represents the elements of IPStream Centrals and Datastream Virtual Paths which fall into the wholesale broadband access market.
(sx) This service comprises a number of individual prices as indicated by the value of x.
(ux) This service comprises a number of individual volumetrics as indicated by the value of x.
(h) See Section 4 Basis of Preparation for the CCA Revaluation Adjustment.
82
Section 9 - Reconciliation Statements
Section 9 - Reconciliation Statements
Section 9
Reconciliation Statements
83
Section 9 - Reconciliation Statements
Section 9.1 - BT Reconciliation Statements
Section 9.1.1 - BT Reconciliation Statement 2011 (Annex 19)
Consolidated Group Income Statement
For the year ended 31 March 2011
Revenue
£m
Return or
Operating Profit before
Costs
taxation
£m
£m
As in the Annual Report
20,076
17,871
1,717
Adjustments
Elimination of inter-market revenue and costs
Other operating income
Profits on disposal of property, plant and equipment
Share of post tax profits of associates and joint ventures
Profit on disposal of associate
Net short term interest
Long term interest payable
Total BT Markets (HCA)
5,110
25,186
5,110
(270)
(103)
(21)
56
22,643
(42)
868
2,543
Holding (gain)/loss
Supplementary depreciation
Other CCA adjustments
-
(10)
230
998
10
(230)
(998)
Adjustments
-
-
-
25,186
23,861
1,325
Total BT Markets (CCA) - Note 1
Note 1 - Agrees to Annex 3 Consolidated Performance Summary.
84
Section 9 - Reconciliation Statements
Section 9.1.2 - BT Reconciliation Statement 2010 (Restated)(Annex 19)
Consolidated Group Income Statement
Restated for the year ended 31 March 2010 (h)
Revenue
£m
Return or
Operating Profit before
Costs
taxation
£m
£m
As in the Annual Report
20,859
19,116
1,007
Adjustments
Elimination of inter-market revenue and costs
Other operating income
Profits on disposal of property, plant and equipment
Share of post tax profits of associates and joint ventures
Loss on disposal of associate
Net short term interest
Long term interest payable
Total BT Markets (HCA)
5,499
26,358
5,499
(305)
(75)
(54)
12
297
24,490
861
1,868
Holding (gain)/loss
Supplementary depreciation
Other CCA adjustments
-
(3,591)
192
980
3,591
(192)
(980)
Adjustments
-
-
-
26,358
22,071
4,287
Total BT Markets (CCA) - Note 1 (h)
CCA adjustments excluding revaluation adj. (h)
Total BT Markets (CCA) - Note 1 (excluding revaluation adj.) (h)
26,358
(540)
23,950
Note 1 - Agrees to Annex 3 Consolidated Performance Summary.
(h) See Section 4 - Basis of Preparation.
85
540
2,408
Section 9 - Reconciliation Statements
Section 9.1.3 - BT Reconciliation Statement MCE (Annex 20)
Mean capital employed of BT Markets
Consolidated mean capital employed
For the year ended 31 March 2011
2011
2010
£m
£m
Shareholders’ funds as in the 2011 Annual Report
1,925
(2,650)
CCA adjustments
2,518
3,736
4,443
1,086
(1,357)
(1,432)
Adjustments
Goodwill
Retirement benefit asset
Derivative financial instruments - assets
Deferred tax liabilities
(626)
1,212
(1,677)
1,456
Deferred tax assets
(461)
Current tax liabilities
221
320
266
3,260
9,371
9,522
Derivative financial instruments - liabilities
296
693
Other payables
831
804
26
24
1,830
7,864
Closing CCA capital employed at 31 March
16,052
19,724
Opening CCA capital employed at 1 April
19,724
16,465
Average CCA capital employed
17,888
18,095
-
1,096
17,888
19,191
Due in more than one year
Minority interests
Retirement benefit obligations
Daily averaging adjustment (a)
Total CCA mean capital employed
2010
Restated (h)
£m
£m
12,439
12,053
1,755
2,418
14,194
14,471
Wholesale residual activity (h)
1,875
1,304
Retail residual activity
1,819
3,416
Sub total residual activities
3,694
4,720
Wholesale markets
-
-
Retail markets & activities
-
-
Sub total roundings and other adjustments
-
-
17,888
19,191
Access markets
Other Wholesale markets (h)
Sub total BT Markets
Residual activities
(2,196)
Long term loans and other borrowings:
Due in less than one year
2011
Roundings and other adjustments
Total CCA mean capital employed
(a) Daily averaging adjustment is not reported in 2011.
(h) See Section 4 - Basis of Preparation.
86
Section 10 - Openreach Information
Section 10 - Openreach Information
Section 10
Openreach Information
87
Section 10 - Openreach Information
Section 10.1 - Openreach Income Statement 2011
For the year ended 31 March 2011
Wholesale analogue exchange
line services
Wholesale ISDN2 exchange line
services
Wholesale business ISDN30
exchange line services
Wholesale local access
Sub Total full SMP services
(excluding AISBO)
AISBO (up to and including
1Gbit/s)
Sub Total full SMP services
(including AISBO)
Other Openreach Markets &
Activities (with no SMP reporting
obligations)
Total: Openreach Services - by
regulated market
Openreach Services (by regulated market)
Full service provision
£m
£m
£m
£m
£m
£m
£m
£m
£m
1,708
75
195
0
1,978
317
2,295
‐ 2,295
Revenue (No Discounts)
Internal Revenue
‐service(s) which are also available externally
‐service(s) provided internally only
‐ e‐PPCs
‐ Internal LLU equivalent
‐ Other
External Revenue
Roundings
Total Revenue
HCA Operating Costs
Charges from Other BT Wholesale Markets
Operating Costs
Provision/Maintenance
Network Support
General Support
General Management
Finance and Billing
Accommodation
Bad Debts
Other Costs
Depreciation
- Land & Building
- Access
- Switch and Transmission
- Other related
Sub total Depreciation
Sub total HCA operating costs
CCA adjustments
Holding (gain)/loss
Supplementary depreciation
Other adjustments
Roundings
Total CCA Operating Costs
Return
Return on mean capital employed
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 322
322
449
449
276
276
570
59
124
636
1,389
237
1,626
83
1,709
2,278
134
319
636
3,367
554
3,921
1,130
5,051
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
157
135
195
303
13
144
0
(50)
6
5
8
12
0
13
0
(1)
6
6
14
23
1
21
0
1
81
37
67
89
4
56
0
(6)
250
183
284
427
18
234
0
(56)
6
22
45
94
2
17
0
7
256
205
329
521
20
251
0
(49)
214
79
131
263
8
191
0
(40)
470
284
460
784
28
442
0
(89)
16
450
49
76
591
2
14
5
4
25
2
13
22
7
44
18
86
8
34
146
38
563
84
121
806
2
55
62
76
195
40
618
146
197
1,001
19
83
220
91
413
59
701
366
288
1,414
1,488
68
116
474
2,146
388
2,534
1,259
3,793
(2)
5
14
1
0
17
(15)
41
70
(62)
212
415
‐ ‐ ‐ ‐ (78)
258
516
19
5
84
‐ ‐ (59)
263
600
‐ 2,053
85
134
570
2,842
496
3,338
225
49
185
66
525
58
583
2.9 %
18.8 %
67.1 %
4.1 %
5.3 %
4.5 %
(h) See Section 4 - Basis of Preparation.
88
5.2 %
25
(8)
210
‐ 1,486
(356)
(14.2)%
(34)
255
810
‐ 4,824
227
1.7 %
Section 10 - Openreach Information
Section 10.2 - Openreach Income Statement 2010
For the year ended 31 March 2010
ISDN2 exchange line
services
Business ISDN30
exchange line services
Wholesale local access
Sub Total full SMP
services (excluding
AISBO)
Alternative interface
symmetric broadband
origination (up to and
including 1Gbit/s)
Sub Total: Openreach full
SMP services (including
AISBO)
Other Openreach Markets
& Activiities (with no SMP
reporting obligations)
Total: Openreach
Services - by regulated
market
Openreach Services (by regulated market)
Analogue exchange line
services
Full service provision
£m
£m
£m
£m
£m
£m
£m
£m
£m
1,857
92
217
n/a
2,166
281
2,447
n/a
2,447
756
Revenue (No Discounts)
Internal Revenue
-service(s) which are also available externally
-service(s) provided internally only
- e-PPCs
-
-
-
-
-
-
-
756
- Internal LLU equivalent
-
-
-
-
-
-
-
375
- Other
375
-
-
-
-
-
-
-
350
350
563
59
103
439
1,164
208
1,372
0
1,372
-
-
-
-
0
-
0
2,420
151
320
439
3,330
489
3,819
1,480
5,299
n/a
n/a
n/a
n/a
0
n/a
0
n/a
0
Provision/Maintenance
170
6
9
65
250
8
258
210
468
Network Support
211
6
7
31
255
20
275
69
344
General Support
259
11
18
62
350
47
397
164
561
General Management
326
16
24
66
432
75
507
218
725
External revenue
Roundings
Total Revenue
HCA Operating Costs
Charges from Other BT Wholesale Markets
(1)
(1)
Operating Costs
Finance and Billing
Accommodation
Bad Debts
Other Costs
16
1
1
3
21
3
24
11
35
192
14
21
43
270
21
291
209
500
2
-
-
-
2
-
2
1
(48)
(1)
0
(3)
(52)
2
(50)
(59)
3
(109)
Depreciation
- Land & Building
- Access
- Switch and Transmission
18
2
2
13
35
1
36
21
57
465
15
14
50
544
53
597
79
676
27
6
111
- Other related
115
7
9
28
159
42
201
117
318
Sub total Depreciation
670
30
52
97
849
145
994
452
1,446
1,798
83
132
364
2,377
321
2,698
1,275
3,973
(2,357)
(65)
(40)
(236)
(2,698)
(217)
(2,915)
Sub total HCA operating costs
72
6
49
160
235
395
CCA adjustments
Holding (gain)/loss
(521)
(3,436)
Supplementary depreciation
185
4
-
23
212
6
218
(11)
207
Other adjustments
532
16
18
48
614
95
709
198
907
Roundings
-
-
-
-
0
-
0
-
0
158
38
110
199
505
205
710
941
1,651
Return
2,262
113
210
240
2,825
284
3,109
539
3,648
Return on mean capital employed
28.5 %
41.7 %
69.7 %
25.4 %
29.8%
25.4 %
29.4 %
20.3 %
27.6 %
(552)
(14)
(4)
(64)
(634)
(10)
(644)
(25)
(669)
186
5
0
23
214
5
219
(10)
209
(117)
-
(2)
-
5
-
(14)
-
(128)
-
21
-
(107)
-
20
-
Total CCA Operating Costs
CCA adjustments excl. reval. adj. (h)
Holding (gain)/loss
Supplementary depreciation
Other adjustments
Roundings
(87)
-
Total CCA Operating Costs excl. reval. adj.
1,315
72
133
309
1,829
337
2,166
1,260
3,426
Return excl. reval adj.
1,105
79
187
130
1,501
152
1,653
220
1,873
Return on mean capital employed excl. reval adj.
13.9 %
15.6 %
8.3 %
14.2 %
29.6 %
62.1 %
13.7 %
15.9%
13.5 %
(h) See Section 4 - Basis of Preparation.
89
Section 10 - Openreach Information
Section 10.3 - Openreach MCE Statement 2011
For the year ended 31 March 2011
Wholesale ISDN2
exchange line services
Wholesale business
ISDN30 exchange line
services
Wholesale local access
Sub Total full SMP
services (excluding
AISBO)
AISBO (up to and
including 1Gbit/s)
Sub Total full SMP
services (including
AISBO)
Other Openreach Markets
& Activities (with no SMP
reporting obligations)
Total: Openreach
Services - by regulated
market
Openreach Services (by regulated market)
Wholesale analogue
exchange line services
Full service provision
£m
£m
£m
£m
£m
£m
£m
£m
£m
118
3,610
(20)
3,395
144
189
309
15
102
(1)
98
21
7
18
16
11
81
68
12
53
26
160
713
(4)
615
17
32
136
309
4,436
56
4,176
194
281
489
14
0
378
424
0
268
255
323
4,436
434
4,600
194
549
744
206
132
479
931
24
684
387
529
4,568
913
5,531
218
1,233
1,131
Non-current Assets
Tangible fixed assets:
Land & Buildings
Access - Copper
Access - Fibre
Access - Duct
Switch and Transmission
- Switch
- Transmission
Other
Investments
Total Non-current assets
0
0
0
0
0
0
0
0
0
7,745
260
267
1,669
9,941
1,339
11,280
2,843
14,123
32
32
Current Assets
Stocks
Debtors
- Internal
- External
0
0
0
0
0
0
0
206
350
12
17
29
69
58
28
305
464
50
42
355
506
(53)
(31)
302
475
Total Current Assets
556
29
98
86
769
92
861
(52)
809
Liabilities falling due within one year
- Internal
- External
0
(513)
0
(24)
0
(83)
0
(100)
0
(720)
0
(118)
0
(838)
0
(194)
0
(1,032)
Total Liabilities falling due within one year
(513)
(24)
(83)
(100)
(720)
(118)
(838)
(194)
(1,032)
43
5
15
(14)
49
(26)
23
(246)
(223)
7,788
265
282
Net Current Assets/Liabilities
Total Assets less Current Liabilities
Provisions for liabilities and charges
(75)
(5)
(8)
1,655
(22)
9,990
(110)
1,313
(12)
11,303
(122)
2,597
(82)
13,900
(204)
Roundings
Mean capital employed
7,713
260
274
1,633
9,880
1,301
11,181
90
2,515
13,696
Section 10 - Openreach Information
Section 10.4 - Openreach MCE Statement 2010
Full service provision
ISDN2 exchange line services
Business ISDN30 exchange line
services
Wholesale local access
Sub Total full SMP services
(excluding AISBO)
Alternative interface symmetric
broadband origination (up to
and including 1Gbit/s)
Sub Total: Openreach full SMP
services (including AISBO)
Other Openreach Markets &
Activiities (with no SMP
reporting obligations)
Total: Openreach Services - by
regulated market
Openreach Services (by regulated market)
Analogue exchange line
services
For the year ended 31 March 2010
£m
£m
£m
£m
£m
£m
£m
£m
£m
153
3,667
3
3,266
195
310
385
16
102
92
27
9
21
17
12
95
65
10
70
28
125
405
313
15
18
98
311
4,186
98
3,736
247
407
532
16
378
374
n/a
246
125
327
4,186
476
4,110
247
653
657
237
159
363
912
29
758
488
564
4,345
839
5,022
276
1,411
1,145
n/a
n/a
n/a
n/a
0
n/a
0
n/a
0
7,979
267
297
974
9,517
1,139
10,656
2,946
13,602
Non-current Assets
Tangible fixed assets
Land & Buildings
Access-Copper
Access- Fibre
Access - Duct
Switch and Transmission
- Switch
- Transmission
Other
Investments
Total Non-current Assets
Current Assets:
Stocks
Debtors
- Internal
- External
n/a
n/a
n/a
n/a
0
n/a
0
34
34
285
86
18
3
38
1
52
10
393
100
58
1
451
101
2
82
453
183
Total Current Assets
371
21
39
62
493
59
552
118
670
Liabilities falling due within one year
- Internal
- External
n/a
(382)
n/a
(17)
n/a
(29)
n/a
(79)
0
(507)
n/a
(75)
0
(582)
n/a
(368)
0
(950)
Total Liabilities falling due within one year
(382)
(17)
(29)
(79)
(507)
(75)
(582)
(368)
(950)
(11)
4
10
(17)
(14)
(16)
(30)
(250)
(280)
271
307
957
Net Current Assets/Liabilities
Total Assets less Current Liabilities
Provisions for liabilities and charges
Roundings
Mean capital employed
7,968
(31)
7,937
(3)
268
(5)
302
(7)
950
9,503
(46)
9,457
1,123
(3)
1,120
10,626
(49)
10,577
91
2,696
(41)
2,655
13,322
(90)
13,232
Section 10 - Openreach Information
Section 10.5 - Reconciliation of Openreach Income Statement 2011
For the year ended 31 March 2011
Notes
(per 10.7)
Operating Return or
Cost
Profit
before
taxation
£m
£m
Revenue
£m
4,930
As in the Annual Report
Reconciliation differences:
Use of BT Operate assets
Northern Ireland (revenues and returns not subject to BT Undertakings)
Non-traded costs
Other trading differences
Total reconciliation differences
(b)
(c)
(e)
(d)
120
120
3,675
(181)
99
129
71
118
1,255
181
21
(129)
(71)
2
CCA adjustments
-
1,031
Adjustments
1
-
1
5,051
4,824
227
Regulatory entity (as per Section 10.1)
(h) See Section 4 - Basis of Preparation.
92
(1,031)
Section 10 - Openreach Information
Section 10.6 - Reconciliation of Openreach Income Statement 2010
For the year ended 31 March 2010
Notes
(per 10.7)
CCA adjustments
Regulatory entity (as per Section 10.2) including revaluation adjustment (h)
CCA adjustments excluding revaluation adjustment
Regulatory entity (as per Section 10.2) excluding revaluation adjustment (h)
Operating
Cost
£m
£m
5,164
As in the Annual Report
Reconciliation differences:
Use of BT Operate assets
Northern Ireland (revenues and returns not subject to BT Undertakings)
Other trading differences
Total reconciliation differences
Revenue
(b)
(c)
(d)
4,060
Return or
Profit before
taxation
£m
1,104
135
135
(179)
112
(20)
(87)
179
23
20
222
-
(2,322)
2,322
1,651
3,648
5,299
-
(547)
5,299
3,426
(h) See Section 4 - Basis of Preparation.
93
547
1,873
Section 10 - Openreach Information
Section 10.7
10.7 -- Openreach
Openreach Notes
Notes
Section
1. Openreach Statements
As noted within the ‘Regulation in the UK section’ of these accounts, on the 22 September 2005, BT
offered certain undertakings to Ofcom in lieu of a reference under the Enterprise Act 2002 (“the
Undertakings”). In accordance with section 5.31 of the Undertakings, with effect from the start of BT’s
2006/07 financial year, BT’s Regulatory Financial Statements need to separately present the financial
results of Openreach and include a reconciliation of Openreach’s revenue, operating profit (and other
items agreed between BT and Ofcom) with the financial information about Openreach as shown in BT
Group plc’s Annual Report.
The form, content and basis of preparation of the financial results of Openreach follow, to the fullest
extent possible, those used in the preparation of the Current Cost Financial Statements.
The Primary Accounting Documents outline the methodologies used to present the financial results of
Openreach within the Current Cost Financial Statements for 2011 (Openreach regulatory statement).
The reconciliation of that statement to the Openreach segmental financial information as shown in BT
Group plc’s Annual Report is shown for the Profit and Loss Account above.
BT’s Current Cost Financial Statements have been prepared in accordance with the Final Statements
and Notifications imposed on BT by Ofcom, where Ofcom has defined certain markets where BT is
deemed to have Significant Market Power (SMP) in the UK. However, the products sold by Openreach
do not align directly with these definitions of these economic markets.
The Primary Accounting Documents, dated 15 September 2011, detail how BT has disaggregated the
SMP definitions in order to show the Openreach regulatory statement and reconciliation of that to the
Openreach financial information as shown in BT Group plc’s Annual Report. For the sake of clarity of
presentation, within the Openreach regulatory statement, separate columns are contained for each
“Full Openreach market” and the remaining “Part Openreach market’”activities have been
consolidated into a single column.
The Openreach information includes comparative information for the year ended 31 March 2010
published on 28 July 2010 prepared in accordance with the Primary Accounting Documents dated 28
July 2010.
2. Access Markets Openreach Level Review
To assess the underlying performance of Openreach's markets on a like for like basis each year it is
necessary to adjust for a number of significant one off items which impact the operating profit in one
year and not in another. The return shown in these statements for total Openreach before these items
was 1.7% for the financial year 2010/11 and 27.6% for the financial year 2009/10 including non-SMP
activity and 5.3% in 2010/11 and 29.8% in 2009/10 excluding non-SMP results and Openreach
Ethernet services (AISBO market). If adjustments are made to these markets, for comparability
purposes, the return is £935m for 2010/11 and £714m for 2009/10 resulting in a ROCE of 9.7% and
7.7% respectively. The adjustments are as follows:
• Wholesale Local Access Co-location activity has been excluded. BT charges customers upfront
for the cost of equipment and the installation of its exchanges. Revenue is recognised and
received in the year of connection but the capitalised costs are depreciated over the life of the
94
asset. The non-matched element between revenue and costs of these items distorts the
reported return in the local access market.
• Remove the Current Cost Accounting (CCA) Holding Gains and losses from each year, as these
items are the change in valuation driven by price effects in the year and can swing significantly
in amount and direction from year to year.
• Remove Other CCA adjustments, as these items are principally due to methodology changes,
where any changes resulting from change or modification to the valuation methodology are
taken through the Profit and Loss account. The specific adjustments are not, in general,
expected to recur.
3. Reconciling Differences
The reconciling differences between the Openreach regulatory statement and the Openreach
segmental financial information reported in BT Group plc’s Annual Report fall into the following main
categories:
(a) Basis of preparation under Current Cost Accounting (CCA)
BT Group plc’s Annual Report has been prepared under the historical cost convention (‘HCA’), modified
for the revaluation of certain financial assets and liabilities at fair value. As directed by Ofcom through
the Explanatory Statement and Notification, BT’s Current Cost Financial Statements have been
prepared on a CCA basis, in accordance with the Primary Accounting Documents and the Detailed
Valuation Methods, all of which are annually updated. As such, a reconciliation entry has been made to
exclude the aggregated CCA adjustments included within the Openreach regulatory statement.
(b) Rental charge to Openreach for use of assets owned by BT Operate
Within the Openreach segmental financial information reported in BT Group plc’s Annual Report, the
results of BT Wholesale include a charge for an appropriate return on capital where assets are owned by
BT Operate (e.g. for line cards, electronics and network features) but are used by Openreach. The
Openreach regulatory statements do not include this charge, as the basis for attribution of costs and
assets to products in the regulatory accounts is actual costs and assets.
(c) Results relating to Northern Ireland operations
The Current Cost Financial Statements have been prepared in accordance with the Final Statements and
Notifications imposed on BT where Ofcom has defined certain markets in which BT is deemed to have
Significant Market Power (SMP) in the UK. This definition includes BT’s Northern Ireland operations.
The Openreach segmental financial information reported in BT Group plc’s Annual Report excludes BT’s
operations in Northern Ireland. Accordingly, the results of the access network element of BT’s Northern
Ireland operations form part of the reconciliation.
(d) Other Trading Differences
The Openreach segmental financial information reported in BT Group plc's Annual Report reflect the
internal charges between BT's lines of business rather than the allocation of actual costs and capital
employed as shown in the Current Cost Financial Statements. The other trading differences reflect the
total of these timing differences across the year.
Section 10 - Openreach Information
(e) Non-traded costs
Non-traded costs are shown separately from the Openreach segmented results in BT Group plc’s Annual
Report, and are included as a separate line to enable reconciliation between the accounts.
95
Appendix 1 - Other Information
Appendix 1 - Other Information
Appendix 1
Other Information
96
Appendix 1 - Other Information
Appendix 1.1 - Network Activity Statements (Annex 15)
Appendix 1.1.1 - Network Activity Statement - Consolidated 2011
Fully Allocated Cost (£m) (h)
Footnotes
for the year ended 31 March 2011
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
HCA operating cost
Supplementary
depreciation
Holding gain
and other CCA
adjustments
Total CCA
operating
costs
Applicable
CCA mean
rate of return
capital employed on capital %
Capital costs
Total of
operating
costs and
capital costs
relating to
current year
Volume (b)
Units
Average costs
per min/unit on a
current cost
basis relating to
current year
SMP Cost Accounting components
Local exchange concentrator
Local exchange processor
Remote - local transmission link
Remote - local transmission length
Product management policy & planning
Interconnect local end rental 2Mbit
Interconnect 2Mbit connection
Interconnect extension circuits (IEC) 2Mbit link
Customer Sited Interconnect cct (CSI) 2Mbit link
Interconnect extension circuits (IEC) 2Mbit per km
Customer Sited Interconnect cct (CSI) 2Mbit per km
In Span Interconnect circuits (ISI) transmission
Nominated In Span I/Connect cct (ISI) transmission
Intra Building Circuit (IBC) connection
Intra Building Circuit (IBC) rental
PC rental 2Mbit link per km distribution
PC rental 2Mbit link per km trunk
PC rental 34Mbit link per km distribution
PC rental 34Mbit link per km trunk
PC rental 140Mbit link per km distribution
PC rental 140Mbit link per km trunk
PC rental 622Mbit link per km trunk
Point of Handover electronics
PC rental 64Kbit link
PC rental 2Mbit link
PC rental 34Mbit link
PC rental 140Mbit link
PC rental 64Kbit link per km transmission
64Kbit PC link connection cct provision
2Mbit and above PC link connection cct provision
PC rental 64Kbit link local end
PC rental 34Mbit link local end
PC rental 140Mbit link local end
PC rental 2Mbit local end copper
PC rental 2Mbit local end fibre
PPC support services
Netstream equipment
Wholesale & LAN extension services electronics
Wholesale & LAN extension services fibre etc
Wholesale & LAN extension services BNS
Backhaul extension services electronics
Backhaul extension services fibre etc
Wholesale & LAN extension services BNS electronics
(a)
(b)
(c)
(h)
(c)
88
87
50
38
21
3
5
3
3
2
2
2
1
12
3
64
22
10
7
9
8
12
4
39
25
3
5
20
1
48
23
12
9
17
117
3
8
42
202
1
6
9
14
(3)
(2)
0
5
0
0
0
0
0
0
0
0
0
0
0
(1)
(1)
(1)
0
0
0
0
0
(1)
(1)
0
(1)
2
0
0
0
0
(1)
0
0
0
(2)
0
1
0
0
0
0
7
7
5
27
0
0
0
0
0
1
1
0
1
0
0
15
6
2
2
2
3
4
0
2
0
0
0
12
0
0
0
4
1
0
30
1
0
0
54
1
0
4
0
92
92
55
70
21
3
5
3
3
3
3
2
2
12
3
78
27
11
9
11
11
16
4
40
24
3
4
34
1
48
23
16
9
17
147
4
6
42
257
2
6
13
14
This component is attributed on a % basis so no volume or unit cost is derivable.
See glossary for volume unit descriptors.
Unit of length is 10 kilometres.
See Section 4 - Basis of Preparation.
97
152
139
52
332
9
6
1
4
6
8
12
2
7
11
4
244
96
36
31
38
44
64
4
45
66
5
13
151
0
9
32
46
22
20
389
18
14
79
765
6
10
44
24
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
17
15
6
37
1
1
0
0
1
1
1
0
1
1
0
27
11
4
3
4
5
7
0
5
7
1
1
17
0
1
4
5
2
2
43
2
2
9
84
1
1
5
3
109
107
61
107
22
4
5
3
4
4
4
2
3
13
3
105
38
15
12
15
16
23
4
45
31
4
5
51
1
49
27
21
11
19
190
6
8
51
341
3
7
18
17
175,850
173,172
142,892
257,671
171,360
15,646
505
12,149
15,646
302,389
473,292
7,954
30,325
3,214
77,087
2,313,836
1,673,694
42,694
57,684
27,677
67,154
18,780
3,887,906
281,809
210,960
2,849
1,951
8,604,747
1,374
30,718
110,901
4,161
1,157
36,843
234,297
(a)
(a)
133,963
122,859
1,259
17,900
9,472
45,255
mm
mm
mm
mm
mm
circuits
circuits
circuits
circuits
km
km
100m
100m
circuits
circuits
km
km
km
km
km
km
km
eq
links
links
links
links
km
circuits
circuits
le
le
le
le
le
le
le
circuits
le
le
circuits
£0.06
£0.06
£0.04
£0.04
£0.01
£243.38
£10,400.10
£242.17
£244.51
£9.85
£9.37
£287.85
£70.01
£4,167.39
£47.92
£45.32
£22.69
£360.31
£211.53
£537.54
£242.45
£1,231.29
£0.97
£160.16
£148.06
£1,047.11
£3,103.45
£5.95
£1,646.50
£1,583.41
£235.39
£4,928.11
£10,219.28
£510.92
£811.27
(a)
(a)
£381.37
£2,778.28
£1,922.81
£378.94
£1,918.77
£374.61
Appendix 1 - Other Information
Appendix 1.1.1 - Network Activity Statement - Consolidated 2011 (continued)
Fully Allocated Cost (£m) (h)
Footnotes
for the year ended 31 March 2011
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
HCA operating cost
Supplementary
depreciation
Holding gain
and other CCA
adjustments
Total CCA
operating
costs
Applicable
rate of return
CCA mean
capital employed on capital %
Capital costs
Total of
operating
costs and
capital costs
relating to
current year
Average costs
per unit on a
current cost
basis relating to
current year
Volume (b)
SMP Cost Accounting components
Ethernet main links
SG & A private circuits
SG & A partial private circuits
National OA non chargeable
Emergency OA (999) non chargeable
SDSL connections
Wholesale Access specific
Routeing & records
MDF Hardware jumpering
Software jumpering
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
Local exchanges general frames current
PSTN line test equipment
Dropwire capital & PSTN NTE
Business PSTN drop maintenance
Residential PSTN drop maintenance
ISDN2 drop maintenance
PSTN line cards
ISDN2 line cards
Pair gain
ISDN2 NTE
Broadband line testing systems
DSLAM capital/maintenance
ADSL connections
External WLR SG & A
Internal WLR SG & A
SG & A other access
Local Loop Unbundling room build
Local Loop Unbundling hostel rentals
Local Loop Unbundling hostel rentals power & vent
Local Loop Unbundling tie cables
Local Loop Unbundling systems development
Directories
Service assurance Retail
Service Centres - Provision
Sales product management
Service Centres - Assurance
Combi Card voice
Combi Card broadband
29
19
48
0
8
0
5
15
238
3
123
59
553
169
69
52
4
363
19
85
4
144
22
1
5
46
261
3
4
1
73
0
26
37
13
2
38
0
98
26
49
8
67
6
0
0
0
0
0
0
0
0
0
23
0
205
0
0
0
0
37
0
0
0
(4)
(1)
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
(1)
(7)
26
0
0
0
0
0
0
0
0
0
38
0
414
0
(22)
0
0
(32)
0
0
0
12
2
0
0
0
0
0
0
0
0
0
0
0
(1)
0
0
0
0
0
0
8
83
61
19
48
0
8
0
5
15
238
3
184
59
1,172
169
47
52
4
368
19
85
4
152
23
1
5
46
261
3
4
1
73
0
26
37
14
2
38
0
98
26
49
15
143
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptors.
(h) See Section 4 - Basis of Preparation.
98
322
9
4
1
3
0
16
0
0
0
861
0
7,041
1
34
2
12
1,097
1
3
0
241
42
19
9
206
422
14
2
1
84
1
70
77
69
4
(4)
0
5
(14)
5
23
174
11.0
11.0
11.0
11.0
11.0
11.0
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
11.0
10.1
11.0
10.1
11.0
10.5
11.0
11.1
11.0
11.0
11.0
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.5
10.1
10.2
10.1
11.0
35
1
0
0
0
0
2
0
0
0
87
0
711
0
3
0
1
111
0
0
0
24
5
2
1
22
46
2
0
0
9
0
7
8
7
0
0
0
0
(1)
0
2
19
96
20
48
0
8
0
7
15
238
3
271
59
1,883
169
50
52
5
479
19
85
4
176
28
3
6
68
307
5
4
1
82
0
33
45
21
2
38
0
98
25
49
17
162
415,633
(a)
(a)
66,808
80,117
2,926
4,660,136
2,292,170
9,841,401
10,003,026
25,089,941
29,569,469
25,089,941
29,569,469
40,092,933
39,926,931
23,562,145
24,995,266
5,313,408
19,110,988
1,141,741
20,691,709
1,141,741
289,565
1,141,741
23,087,063
(a)
2,015,836
(a)
(a)
(a)
1,527
12,845
12,845
41,134
(a)
(a)
(a)
(a)
(a)
(a)
20,691,709
7,948,112
fibre km
mm
mm
conns
trans
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
channels
lines
channels
eq
channels
lines
conns
rooms
hostels
hostels
cables
lines
lines
£230.30
(a)
(a)
£0.00
£0.01
£0.51
£1.47
£6.74
£24.22
£0.33
£10.83
£1.98
£75.05
£5.71
£1.25
£1.30
£0.21
£19.17
£3.63
£4.45
£3.40
£8.51
£23.77
£8.62
£5.97
£2.92
(a)
£2.29
(a)
(a)
(a)
£56.14
£2,564.75
£3,477.28
£496.95
(a)
(a)
(a)
(a)
(a)
(a)
£0.84
£20.48
Appendix 1 - Other Information
Appendix 1.1.1 - Network Activity Statement - Consolidated 2011 (continued)
Fully Allocated Cost (£m) (h)
Footnotes
for the year ended 31 March 2011
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
HCA operating cost
Supplementary
depreciation
Holding gain
and other CCA
adjustments
Total CCA
operating
costs
Applicable
CCA mean
rate of return
capital employed on capital %
Capital costs
Total of
operating
costs and
capital costs
relating to
current year
Average costs
per unit on a
current cost
basis relating to
current year
Volume (b)
SMP Cost Accounting components
Access Cards (ISDN2 services)
Core/Metro (voice)
Border gateway & signalling firewall
MSAN-POSI Voice Link
Access Cards (other services)
MSAN-METRO Connectivity Link
Core/Metro connectivity
Edge Ethernet ports
iNode (call set up and features)
ATM customer interface 2Mbit
ATM customer interface 34Mbit
ATM customer interface > 155Mbit
ATM network interface
ATM network switching
Inter ATM transmissions
Internal LLU Tie Cables
Broadband backhaul circuits (excl Virtual Paths)
Special Fault Investigation
MSAN-BRAS Broadband Link
Core/Metro (broadband)
Geographic broadband adjustments
Low Tisbo Equipment Depn
High Tisbo Equipment Depn
Very High Tisbo Equipment Depn
Low Tisbo Excess Construction
AISBO Excess Construction
Main exchange switching
ISDN30 connections
ISDN30 access
ISDN30 line cards
Access Cards (ISDN30 services)
0
8
0
0
16
23
74
12
16
1
3
12
6
36
37
9
47
72
74
102
0
31
5
0
3
4
0
3
0
0
9
12
29
4
0
0
0
0
0
0
8
(1)
8
0
70
38
0
0
0
0
0
0
0
11
0
0
24
34
100
15
16
1
3
12
6
36
43
9
52
72
138
135
0
31
5
0
3
4
0
18
0
0
22
65
171
25
61
0
2
7
4
29
144
47
154
(2)
201
224
0
0
0
0
0
0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
10.1
11.0
11.0
11.0
11.2
0.0
0.0
0.0
0.0
0.0
0.0
0
2
0
0
2
7
19
3
7
0
0
1
0
3
16
5
17
0
22
25
0
0
0
0
0
0
0
13
0
0
26
41
119
18
23
1
3
13
6
39
59
14
69
72
160
160
0
31
5
0
3
4
Residual components
Roundings
Total
1,141,741
1,559,624
810,969
816,356
(a)
(a)
(a)
(a)
(a)
4,077
1,452
17,564
12,374
4,246,569
1,157,155
7,936,433
100
425,115
4,854,652
4,854,652
1
(a)
(a)
(a)
1
(a)
channels
mm
mm
mm
ports
ports
ports
ports
usage
usage
cables
circuits
misc
circuits
circuits
misc
misc
£0.01
£0.00
£0.00
£0.00
(a)
(a)
(a)
(a)
(a)
£160.14
£2,124.10
£699.15
£490.19
£9.27
£50.85
£1.80
£692,509.31
£0.02
£32.97
£33.07
£1.00
(a)
(a)
(a)
£2,874,202.00
(a)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
SMP Accounting Separation components
(a)
(b)
(h)
(n)
0
0
0
0
(1)
(1)
(3)
(1)
0
0
0
0
0
0
(2)
1
(3)
0
(6)
(5)
0
0
0
0
0
0
122
0
16
138
293
32
170
n/a
n/a
2,407
(1)
70
2,476
684
75
2,551
n/a
n/a
0
(2)
2
0
3
2
2
n/a
n/a
988
8,187
16,069
1,680
9,867
6,969
230
This component is attributed on a % basis so no volume or unit cost is derivable.
See glossary for volume unit descriptors.
See Section 4 - Basis of Preparation.
Accounting Separation components require no costs to be disclosed.
99
Appendix 1 - Other Information
Appendix 1.1.2 - Network Activity Statement - Consolidated 2010 (Restated)
Restated for the year ended 31 March 2010
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
Fully Allocated Cost (£m) (h)
HCA operating
cost
Supplementary
depreciation
Holding
(gain)/loss and
other CCA
adjustments
Total CCA
operating
costs
CCA mean
capital
employed
Applicable
rate of return
on capital %
Capital
costs
Total of
operating
costs and
capital costs
relating to
current year
Volume (b)
Average costs
per min/unit on
a current cost
basis relating to
current year
SMP Cost Accounting components
Local exchange concentrator
Local exchange processor
Main exchange switching
Remote - local transmission link
Remote - local transmission length (c)
Local - tandem transmission link
Local - tandem transmission length (c)
Product management policy & planning
Interconnect local end rental 2Mbit
Interconnect 2Mbit connection
Interconnect extension circuits (IEC) 2Mbit link
Customer Sited Interconnect cct (CSI) 2Mbit link
Interconnect extension circuits (IEC) 2Mbit per km
Customer Sited Interconnect cct (CSI) 2Mbit per km
In Span Interconnect circuits (ISI) transmission
Nominated In Span I/Connect cct (ISI) transmission
Intra Building Circuit (IBC) connection
Intra Building Circuit (IBC) rental
PC rental 2Mbit link per km distribution
PC rental 2Mbit link per km trunk
PC rental 34Mbit link per km distribution
PC rental 34Mbit link per km trunk
PC rental 140Mbit link per km distribution
PC rental 140Mbit link per km trunk
PC rental 622Mbit link per km trunk
Point of Handover electronics
PC rental 64Kbit link
PC rental 2Mbit link
PC rental 34Mbit link
PC rental 140Mbit link
PC rental 64Kbit link per km transmission
64Kbit PC link connection cct provision
64Kbit PC link connection cct rearrangements
2Mbit and above PC link connection cct provision
PC rental 64Kbit link local end
PC rental 34Mbit link local end
PC rental 140Mbit link local end
PC rental 2Mbit local end copper
PC rental 2Mbit local end fibre
PPC support services
Netstream equipment
Low Tisbo equipment depreciation
High Tisbo equipment depreciation
78
86
20
48
33
25
9
38
3
6
3
3
2
2
2
1
16
9
68
25
13
9
9
9
10
5
41
25
3
6
19
2
1
63
28
16
10
18
123
4
7
38
7
(4)
(4)
0
(3)
4
(1)
1
0
0
0
0
0
0
0
0
0
0
0
(4)
(2)
(1)
(1)
(1)
0
0
(1)
(2)
(2)
(1)
(1)
1
0
0
0
0
(1)
(1)
0
(1)
0
(2)
0
0
10
9
0
1
3
0
1
0
0
0
0
0
0
0
0
0
0
0
5
2
0
0
1
1
1
0
1
1
0
0
2
0
0
0
0
1
1
0
5
0
0
0
0
84
91
20
46
40
24
11
38
3
6
3
3
2
2
2
1
16
9
69
25
12
8
9
10
11
4
40
24
2
5
22
2
1
63
28
16
10
18
127
4
5
38
7
156
162
54
62
309
28
84
1
8
2
5
7
14
9
3
8
12
6
279
111
50
42
41
51
66
7
57
67
8
14
149
0
0
14
51
65
29
25
434
22
14
0
0
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptions.
(c) Unit of length is 10 kilometres.
(h) See Section 4 Basis of Preparation.
100
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
17
18
6
7
34
3
9
0
1
0
1
1
1
1
0
1
1
1
31
12
5
5
5
6
7
1
6
7
1
2
16
0
0
1
6
7
3
3
48
2
2
0
0
101
109
26
53
74
27
20
38
4
6
4
4
3
3
2
2
17
10
100
37
17
13
14
16
18
5
46
31
3
7
38
2
1
64
34
23
13
21
175
6
7
38
7
194,979
191,003
161,496
158,295
280,486
87,614
352,158
196,777
15,882
621
13,862
15,882
345,025
480,279
7,954
29,900
5,263
73,208
2,176,325
1,649,596
50,065
69,019
22,715
62,150
17,145
6,697,643
335,231
219,341
3,397
1,811
9,729,372
2,399
580
38,363
113,977
4,803
1,132
40,378
241,785
(a)
(a)
(a)
(a)
mm
mm
mm
mm
mm
mm
mm
mm
circuits
circuits
circuits
circuits
km
km
100m
100m
circuits
circuits
km
km
km
km
km
km
km
eq
links
links
links
links
km
circuits
circuits
circuits
le
le
le
le
le
0.052p
0.056p
0.016p
0.033p
0.026p
0.031p
0.006p
0.019p
£241.23
£10,422.64
£273.00
£220.01
£11.47
£5.56
£248.09
£62.98
£3,253.45
£124.48
£45.80
£22.63
£359.18
£198.46
£587.63
£247.47
£1,064.32
£0.79
£137.44
£144.16
£1,183.43
£3,752.49
£3.95
£1,042.55
£1,014.09
£1,683.66
£297.25
£4,941.61
£11,677.25
£517.63
£722.52
(a)
(a)
(a)
(a)
Appendix 1 - Other Information
Appenidix 1.1.2 - Network Activity Statement - Consolidated 2010 (continued)
For the year ended 31 March 2010
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
Fully Allocated Cost (£m) (h)
HCA operating
cost
Supplementary
depreciation
Holding
(gain)/loss and
other CCA
adjustments
Total CCA
operating
costs
CCA mean
capital
employed
Applicable
rate of return
on capital %
Capital
costs
Total of
operating
costs and
capital costs
relating to
current year
Volume (b)
Average costs
per unit on a
current cost
basis relating to
current year
SMP Cost Accounting components
Very High Tisbo equipment depreciation
Low Tisbo ECC equipment depreciation
AISBO ECC equipment depreciation
Wholesale & LAN extension services electronics
Wholesale & LAN extension services fibre etc
Wholesale & LAN extension services BNS
Backhaul extension services electronics
Backhaul extension services fibre etc
Wholesale & LAN extension services BNS electronics
Ethernet main links
SG & A private circuits
SG & A partial private circuits
National OA non chargeable
Emergency OA (999) non chargeable
SDSL connections
Wholesale Access specific
Routeing & records
MDF Hardware jumpering
Software jumpering
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
Local exchanges general frames current
PSTN line test equipment
Dropwire capital & PSTN NTE
Business PSTN drop maintenance
Residential PSTN drop maintenance
ISDN2 drop maintenance
PSTN line cards
ISDN2 line cards
Pair gain
ISDN2 NTE
Broadband line testing systems
DSLAM capital/maintenance
ADSL connections
External WLR SG & A
Internal WLR SG & A
SG & A other access
Local Loop Unbundling room build
Local Loop Unbundling hostel rentals
Local Loop Unbundling hostel rentals power & vent
Local Loop Unbundling tie cables
0
3
3
70
116
1
12
10
9
23
32
74
1
8
0
30
22
249
4
122
80
634
228
83
69
10
370
24
98
4
141
20
1
8
41
283
12
4
2
18
0
18
13
12
0
0
0
0
1
0
0
0
0
4
0
0
0
0
0
0
0
0
0
17
0
168
0
8
0
0
29
0
0
0
(7)
(1)
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
7
0
0
0
0
3
0
0
0
0
0
0
0
0
0
(123)
0
(613)
0
0
0
0
(44)
0
0
0
16
3
0
0
0
(6)
0
0
0
0
0
0
0
(11)
0
3
3
70
124
1
12
10
9
30
32
74
1
8
0
30
22
249
4
16
80
189
228
91
69
10
355
24
98
4
150
22
1
8
41
277
12
4
2
18
0
18
13
4
0
0
0
135
541
4
23
46
17
293
8
3
1
2
0
69
5
15
1
758
11
6,475
27
38
17
31
1,127
2
7
1
300
48
13
10
108
524
9
1
1
1
0
51
62
59
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptions.
(h) See Section 4 Basis of Preparation.
101
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
10.9
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.1
10.4
11.0
11.0
10.1
10.1
11.0
10.1
10.1
10.1
10.1
0
0
0
15
60
0
3
5
2
32
1
0
0
0
0
7
1
1
0
77
1
654
3
4
2
3
114
0
1
0
30
5
1
1
11
58
1
0
0
0
0
5
6
6
0
3
3
85
184
1
15
15
11
62
33
74
1
8
0
37
23
250
4
93
81
843
231
95
71
13
469
24
99
4
180
27
2
9
52
335
13
4
2
18
0
23
19
10
(a)
(a)
(a)
37,012
116,230
876
4,451
9,876
1
316,108
(a)
(a)
55,125
93,631
1,976
6,596,446
1,816,070
13,114,617
11,769,545
26,152,110
29,607,602
26,152,110
29,607,602
39,515,018
39,288,658
25,379,230
25,031,937
5,293,410
19,115,731
1,245,591
22,199,030
1,245,591
307,437
1,245,591
14,178,794
8,034,887
2,036,072
(a)
(a)
(a)
632
10,091
10,091
26,373
le
le
circuits
le
le
circuits
fibre km
mm
mm
conns
trans
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
lines
channels
lines
channels
eq
channels
lines
lines
conns
rooms
hostels
hostels
cables
(a)
(a)
(a)
£2,285.39
£1,583.42
£1,595.96
£3,244.72
£1,549.65
£11,034,494.00
£199.23
(a)
(a)
0.003p
0.008p
£5.19
£5.62
£12.37
£19.10
£0.35
£3.51
£2.73
£32.23
£7.78
£2.41
£1.79
£0.53
£18.71
£4.58
£5.16
£3.56
£8.13
£21.18
£6.52
£7.02
£3.69
£41.66
£6.17
(a)
(a)
(a)
£254.37
£2,284.35
£1,899.25
£328.66
Appendix 1 - Other Information
Appendix 1.1.2 - Network Activity Statement - Consolidated 2010 (continued)
For the year ended 31 March 2010
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are cost accounting obligations)
Fully Allocated Cost (£m) (h)
HCA operating
cost
Supplementary
depreciation
Holding
(gain)/loss and
other CCA
adjustments
Total CCA
operating
costs
CCA mean
capital
employed
Applicable
rate of return
on capital %
Total of
operating
costs and
capital costs
relating to
current year
Capital
costs
Volume (b)
Average costs
per unit on a
current cost
basis relating to
current year
SMP Cost Accounting components
Local Loop Unbundling systems development
Directories
Service assurance Retail
Service assurance Global services
Service Centres - Provision
Sales product management
Service Centres - Assurance
Combi Card voice
Combi Card broadband
Access Cards (ISDN2 services)
Core/Metro (voice)
Border gateway & signalling firewall
MSAN-POSI Voice Link
Access Cards (other services)
MSAN-METRO Connectivity Link
Core/Metro connectivity
Edge Ethernet ports
iNode (call set up and features)
ATM customer interface 2Mbit
ATM customer interface 34Mbit
ATM customer interface > 155Mbit
ATM network interface
ATM network switching
Inter ATM transmissions
ISDN30 connections
ISDN30 access
ISDN30 line cards
Internal LLU Tie Cables
Broadband backhaul circuits (excl Virtual Paths)
Special Fault Investigation
MSAN-BRAS Broadband Link
Core/Metro (broadband)
Access Cards (ISDN30 services)
Geographic broadband adjustments
SMP Accounting Separation components
Residual components
Roundings
Total
17
40
0
0
100
27
50
47
20
1
13
0
5
8
50
107
30
16
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
17
40
0
0
100
27
50
47
20
1
13
0
5
8
50
107
30
16
40
(6)
2
0
(3)
(6)
3
140
55
2
29
1
14
19
118
239
66
47
10.1
10.1
11.0
11.0
10.1
11.0
10.1
10.1
11.0
10.1
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
4
(1)
0
0
0
(1)
0
14
6
0
3
0
2
2
13
26
7
5
21
39
0
0
100
26
50
61
26
1
16
0
7
10
63
133
37
21
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
414
2,446
(2)
7,294
(a)
(a)
(a)
(a)
(a)
(a)
(a)
22,199,030
8,034,887
1,245,591
371,275
194,866
194,979
(a)
(a)
(a)
(a)
(a)
lines
lines
channels
mm
mm
mm
(a)
(a)
(a)
(a)
(a)
(a)
(a)
£2.77
£3.22
£0.57
0.004p
0.000p
0.003p
(a)
(a)
(a)
(a)
(a)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(n)
(5)
4
(1)
193
7
416
984
107
523
n/a
n/a
(20)
2,430
664
68
2,498
n/a
n/a
(3)
8
8
n/a
n/a
15,775
1,651
8,405
3
(733)
6,754
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptions.
(h) See Section 4 - Basis of Preparation.
(n) Accounting Separation components require no costs to be disclosed.
102
Appendix 1 - Other Information
Appendix 1.2 - Calculation of FAC based on component costs and usage factors (Annex 16)
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011
for the year ended 31 March 2011
Components
£
£
£
£
£
£
£
£
£
£
£/trans
1.47
1.47
1.47
1.47
Routeing & records
£/line
6.74
6.73
6.73
6.73
MDF Hardware jumpering
£/line
24.22
24.22
24.22
24.22
Software jumpering
£/line
0.33
0.33
0.33
0.33
E side copper capital
£/line
10.83
1.47
1.47
0.33
10.75
10.75
10.75
0.73
0.73
5.15
5.19
12.11
12.11
0.16
0.16
0.73
0.16
0.16
28.85
34.29
22.59
0.33
0.33
0.33
0.19
0.19
0.07
0.18
0.15
1.92
1.92
0.09
37.00
MPF Ceases
MPF Buk Migrations
£
£
£
6.42
34.97
22.59
5.65
0.12
0.33
0.33
0.05
0.05
0.09
0.08
0.02
1.92
1.92
1.92
1.92
0.09
0.03
0.09
0.09
0.01
25.27
8.61
37.40
25.01
7.65
6.76
34.70
5.41
10.75
0.73
0.33
5.41
10.83
E side copper current
£/line
1.98
1.98
1.98
2.38
2.38
1.76
1.47
2.47
D side copper capital
£/line
75.05
74.51
74.51
74.51
74.51
37.53
37.53
75.05
D side copper current
£/line
5.71
5.71
5.71
6.85
6.85
5.08
4.23
7.12
1.03
Local exchanges general frames capital
£/line
1.25
1.25
1.25
1.25
1.25
0.31
0.31
2.49
1.25
Local exchanges general frames current
£/line
1.30
1.30
1.30
1.30
1.30
0.33
0.33
2.60
1.30
PSTN line test equipment
£/line
0.21
0.25
0.21
0.21
0.21
0.17
0.17
£/line
19.17
19.17
19.17
19.17
19.17
9.58
9.58
3.63
3.63
4.45
4.45
3.40
3.40
8.51
8.51
8.51
8.51
23.77
23.77
0.10
0.10
0.17
0.17
5.97
5.97
Business PSTN drop maintenance
£/line
3.63
Residential PSTN drop maintenance
£/line
4.45
ISDN2 drop maintenance
£/channel
3.40
PSTN line cards
£/line
8.51
ISDN2 line cards
£/channel
Pair gain
£/eq
8.62
ISDN2 NTE
£/channel
5.97
Broadband line testing systems
£/line
2.92
ADSL connections
£/conn
2.29
Local Loop Unbundling room build
£/room
56.14
0.36
19.17
4.45
23.77
3.31
3.32
0.19
56.14
Local Loop Unbundling hostel rentals
£/hostel rental
2,564.75
2,564.75
Local Loop Unbundling hostel rentals power & vent
£/hostel rental
3,477.28
3,477.28
Local Loop Unbundling tie cables
£/cable
Combi Card voice
£/line
0.84
Access Cards (ISDN2 services)
£/channel
0.01
496.95
496.95
0.84
Service Centres - Assurance (q)
%
£49m
Sales product management (q)
%
£25m
0.11
0.11
0.11
Service Centres - Provision (q)
%
£98m
8.00
8.00
8.00
Service assurance Retail (q)
%
0.84
0.84
0.84
1.29
1.29
1.29
1.29
0.20
0.20
0.22
0.22
0.01
0.01
1.00
1.00
7.92
7.92
8.13
8.18
1.29
1.29
0.92
0.92
0.87
0.05
0.05
0.15
7.94
7.93
1.96
0.33
115.36
0.87
0.87
17.96
2.16
3.73
0.87
0.18
0.07
1.95
-
Directories (q)
%
£38m
Local Loop Unbundling systems development (q)
%
£2m
Internal WLR SG & A (q)
%
£1m
External WLR SG & A (q)
%
£4m
DSLAM capital/maintenance (q)
%
£307m
Fully Allocated Costs (£)
£
Unit (d)
Wholesale Access specific
Dropwire capital & PSTN NTE
MPF Single Migrations
£
SMPF Ceases
£
SMPF Bulk Migrations
£
SMPF Single Migrations
£
SMPF Rentals
£
SMPF New Provides
Wholesale ISDN2 external service
connections
£
MPF Tie Cables
Wholesale ISDN2 internal service
connections
£
MPF Hostel Rentals
Wholesale premium analogue external
service transfers
£
MPF Room Build
Wholesale premium analogue internal
service takeovers
£
MPF Rentals
Wholesale premium analogue external
service rentals
£
MPF New Provides
Wholesale premium analogue internal
service rentals
£
Wholesale ISDN2 external service
transfers
Wholesale basic analogue external
service rentals
£
Wholesale ISDN2 internal service
takeovers
Wholesale basic analogue internal
service rentals
£
Wholesale local access
Wholesale ISDN2 external service
rentals
Wholesale premium analogue external
service connections
£
Wholesale ISDN2 internal service rentals
Wholesale premium analogue internal
service connections
Fully Allocated Cost (£) (h)
Wholesale ISDN2 exchange line services
Wholesale basic analogue internal
service connections
Average cost per unit (from annex 15)
Wholesale analogue exchange line services
1.83
1.83
1.83
1.83
0.09
0.06
2.32
0.63
0.06
0.09
0.13
43.99
128.75
177.55
6,061.49
500.04
31.59
10.28
0.29
0.11
0.01
0.02
1.95
40.86
40.86
40.86
132.14
132.10
132.91
132.91
9.40
9.73
27.57
27.48
95.52
(d) ppm = pence per minute; £/2Mbit cct = £ per 2 Mbit/s circuit; £/km = £ per kilometre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hosstel rental; % = % utilisation;
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equ
uipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fi bre km = £ per fibre km.
103
94.39
8.88
8.89
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
Unit (d)
PC rental 2Mbit link per km distribution
£/km
45.32
PC rental 2Mbit link per km trunk
£/km
22.69
PC rental 64Kbit link
£/link
160.16
PC rental 2Mbit link
£/link
148.06
PC rental 64Kbit link per km transmission
£/km
5.95
£
£
£
£
£
160.16
148.06
5.95
5.97
1,646.50
1,646.50
£/circuit
1,646.50
2Mbit and above PC link connection cct provision
£/circuit
1,583.41
PC rental 64Kbit link local end
£/le
235.39
PC rental 2Mbit local end copper
£/le
510.92
58.84
PC rental 2Mbit local end fibre
£/le
811.27
635.74
SDSL connections
£/conn
1,586.33
£/line
6.74
MDF Hardware jumpering
£/line
24.22
Software jumpering
£/line
0.33
10.83
10.83
81,185.00
129.93
176.69
1,711.50
81,361.69
2.55
E side copper current
£/line
1.98
1.98
0.16
D side copper capital
£/line
75.05
75.05
17.71
D side copper current
£/line
5.71
5.71
0.47
1.25
0.29
Local exchanges general frames capital
£/line
1.25
Local exchanges general frames current
£/line
1.30
Dropwire capital & PSTN NTE
£/line
19.17
Residential PSTN drop maintenance
£/line
4.45
Broadband line testing systems
£/line
Low Tisbo Equipment Depn (q)
%
£31m
Edge Ethernet ports (q)
%
£18m
9.09
Core/Metro connectivity (q)
%
£119m
59.51
MSAN-METRO Connectivity Link (q)
%
£41m
9.02
0.12
Service Centres - Assurance (q)
%
£49m
Sales product management (q)
%
£25m
Service Centres - Provision (q)
%
£98m
SG & A other access (q)
%
£82m
DSLAM capital/maintenance (q)
%
£307m
SG & A partial private circuits (q)
%
£48m
9.91
4.98
0.06
0.11
7.40
98.15
21.98
2.19
23.55
SG & A private circuits (q)
%
£20m
6.63
5.43
0.05
0.09
19.52
33.31
11.52
1.20
18.79
PPC support services (q)
%
£6m
1,663.04
170.57
6.06
6.17
356.60
1,717.79
259.18
48.83
758.10
Fully Allocated Costs (£)
1,581.57
234.86
0.51
Routeing & records
£/line
£
45.32
64Kbit PC link connection cct provision
E side copper capital
Netstream 16 LL 2Mbit/s connection
£
Radio Backhaul Service - 2 Mbit/s
connection
Partial and Private Circuits 2Mbit/s connection
£
Partial and Private Circuits 2Mbit/s - local
end
Radio Backhaul Service - sub 2 Mbit/s
connection
£
Partial and Private Circuits 2Mbit/s distribution
Partial and Private Circuits 64Kbit/s local end
£
Partial and Private Circuits 2Mbit/s - link
Partial and Private Circuits 64Kbit/s trunk
£
Partial and Private Circuits 64Kbit/s distribution
£
Components
Partial and Private Circuits 64Kbit/s - link
Fully Allocated Cost (£) (h)
Partial and Private Circuits 64Kbit/s connection
Average cost per unit (from annex 15)
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
2.92
50.97
1,697.47
m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % utilisation;
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
(y) Unit costs calculated as a weighted average of the 64Kbit PC link connection cct provision & 64Kbit PC link connection cct rearrangements.
104
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
Components
Unit (d)
PC rental 2Mbit link per km trunk
£/km
22.69
PC rental 34Mbit link per km distribution
£/km
360.31
PC rental 34Mbit link per km trunk
£/km
211.53
PC rental 140Mbit link per km distribution
£/km
537.54
PC rental 140Mbit link per km trunk
£/km
PC rental 622Mbit link per km trunk
£/km
1,231.29
PC rental 34Mbit link
£/link
1,047.11
PC rental 140Mbit link
£/link
3,103.45
Partial and Private Circuits 140/155Mbit/s link
Partial and Private Circuits 140/155Mbit/s distribution
Internal Partial and Private Circuits
140/155Mbit/s - local end
£
£
£
£
£
Partial and Private circuits 622Mbit/s trunk
Partial and Private Circuits 140/155Mbit/s connection
£
Partial and Private circuits 140/155Mbit/s trunk
Partial and Private Circuits 34/45Mbit/s local end
£
Partial and Private circuits 34/45Mbit/s trunk
Partial and Private Circuits 34/45Mbit/s distribution
£
Wholesale trunk segments
Partial and Private circuits 2Mbit/s - trunk
Partial and Private Circuits 34/45Mbit/s link
Fully Allocated Cost (£) (h)
Traditional interface symmetric
broadband origination (above
45Mbit/s up to and including
155Mbit/s)
Partial and Private Circuits 34/45Mbit/s connection
Average cost per unit (from annex 15)
Traditional interface symmetric
broadband origination (above
8Mbit/s up to and including
45Mbit/s)
£
£
£
£
22.69
360.31
211.53
537.84
242.45
2Mbit and above PC link connection cct provision
£/circuit
1,583.41
PC rental 34Mbit link local end
£/le
4,928.11
PC rental 140Mbit link local end
£/le
£10,219m
242.45
1,231.29
1,047.11
3,012.76
1,585.37
1,587.35
4,837.70
10,155.95
High Tisbo Equipment Depn (q)
%
£5m
Edge Ethernet ports (q)
%
£18m
154.50
Core/Metro connectivity (q)
%
£119m
1,011.60
MSAN-METRO Connectivity Link (q)
%
£41m
153.28
0.12
636.19
4,165.40
631.16
0.12
0.02
0.12
0.12
Access Cards (other services) (q)
%
£26m
SG & A partial private circuits (q)
%
£48m
134.62
122.93
13.49
72.87
115.90
60.87
2.57
120.59
0.75
5.24
0.62
SG & A private circuits (q)
%
£20m
14.37
82.78
14.67
77.16
30.90
376.19
19.26
362.41
1.43
13.32
8.10
32.43
PPC support services (q)
%
£6m
1,734.36
2,572.20
388.59
6,315.02
1,734.15
8,882.57
559.79 10,638.95
24.89
230.21
251.29
1,263.84
Fully Allocated Costs (£)
0.12
1,327.29
er hostel rental; % = % utilisation;
m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ pe
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units; £/le = £ per local end; £/con
nn = £ per connection; £/channel = £ per channe
el; £/fibre km = £ per fibre km.
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
105
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
Unit (d)
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
ppm
Local exchange concentrator
ppm
0.062
0.071
0.059
0.080
0.059
0.084
0.060
0.059
0.084
Local exchange processor
ppm
0.062
0.071
0.060
0.081
0.061
0.082
Remote - local transmission link
ppm
0.042
0.034
0.034
0.034
0.034
0.034
0.034
0.034
0.034
0.034
Remote - local transmission length
ppm (per 10km)
0.042
0.061
0.061
0.061
0.061
0.061
0.061
0.061
0.061
0.061
Product management policy & planning
ppm
0.013
0.008
0.012
0.009
0.012
0.008
0.012
0.162
0.191
0.225
0.271
0.162
0.191
National OA non chargeable
ppm
0.001
Emergency OA (999) non chargeable
ppm
0.010
Core/Metro (voice)
ppm
0.001
Border gateway & signalling firewall
ppm
0.000
MSAN-POSI Voice Link
ppm
0.000
iNode (call set up and features) (q)
%
£23m
Edge Ethernet ports (q)
%
£18m
SG & A other access (q)
%
£82m
Fully Allocated Costs (ppm)
0.082
Internal Wholesale call termination local exchange
stick (ISDN)
Retail Sticks
Internal Wholesale call termination local exchange
stick
Call Termination
basket
Internal Wholesale call termination local exchange
segment (ISDN)
Internal Wholesale call origination local exchange
Stick (ISDN)
Retail Sticks
Internal Wholesale call origination local exchange
Stick
PPP
Basket
Internal and External Wholesale PPP
Internal Wholesale call originating local exchange
segment (ISDN) (incl OA)
Internal and External Wholesale call originating local
exchange segment (incl Operator Assistance)
Internal and External Wholesale call originating local
exchange segment PSTN and ISDN (excl OA)
Fully Allocated Cost (£) (h)
Components
Average cost per unit (from annex 15)
Call Origination Basket (ad)
Fixed call termination
Wholesale call termination local exchange segment
Call origination on fixed public narrowband
networks
0.013
0.001
0.001
0.010
0.010
0.011
0.010
0.008
0.011
0.257
0.233
0.279
0.013
p 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; %
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m = £ per
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equ
uipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
(ad) Does not include the service Wholesale Call originating local exchange segment (ISDN) (excl. Ope
erator Assistance) due to immaterial volumes.
106
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
Technical areas (Interconnect Circuits)
Technical Areas (Point of Handover)
Interconnect Specific Basket
£
Components
Unit (d)
Interconnect local end rental 2Mbit
£/circuit
243.38
Interconnect 2Mbit connection
£/circuit
10,400.10
Interconnect extension circuits (IEC) 2Mbit link
£/circuit
242.17
Customer Sited Interconnect cct (CSI) 2Mbit link
£/circuit
244.51
Interconnect extension circuits (IEC) 2Mbit per km
£/km
9.85
Customer Sited Interconnect cct (CSI) 2Mbit per km
£/km
9.37
In Span Interconnect circuits (ISI) transmission
£/100m
£
£
£
£
£
£
£
£
£
243.38
£
£
£
£
£
£
£
£
£
£
£
External 3rd Party POH Rental 155Mbit/s
External 3rd Party POH Rental 34/45Mbit/s
External 3rd Party POH Rental 2Mbit/s CLZ
External 3rd Party POH Rental 2Mbit/s non CLZ
External 3rd Party POH Rental 64Kbit/s
In Span Handover rental
In Span Handover connection
Customer Sited Handover rental
Customer Sited Handover connection
Internal Wholesale intra-building circuits rentals
Internal Wholesale standard CSI rentals - fixed
External Wholesale rearrangements
External Nominated ISI - per km
£
Internal Wholesale standard CSI rentals - per km
Internal Interconnect
External Wholesale ISI rentals
External Wholesale intra-building circuits rentals
In span Interconnect
External Wholesale intra-building circuits
connections
External Wholesale IEC rentals - per km
External Wholesale IEC rentals - fixed
External Wholesale IEC connections
External Wholesale standard CSI rental - fixed
External Wholesale standard CSI connection
Average cost per unit (from annex 15)
Fully Allocated Cost (£) (h)
In Span Interconnect with
Interconnect Extension Circuit
(end to end circuit)
External Wholesale standard CSI rentals - per km
Customer Sited Interconnect
(end to end circuit)
£
243.38
2,829.98
461.53
1,189.37
242.17
244.51
244.51
9.85
9.37
9.37
287.85
287.85
70.01
Nominated In Span I/Connect cct (ISI) transmission
£/100m
70.01
Intra Building Circuit (IBC) connection
£/circuit
4,167.39
Intra Building Circuit (IBC) rental
£/circuit
47.92
Point of Handover electronics
£/eq
PC rental 64Kbit link local end
£/le
235.39
PC rental 34Mbit link local end
£/le
4,928.11
PC rental 140Mbit link local end
£/le
10,219.28
PC rental 2Mbit local end copper
£/le
510.92
24.91
PC rental 2Mbit local end fibre
£/le
811.27
177.28
212.84
5.20
5.85
6.94
21.97
41.02
62.81
208.04
219.78
1,434.63
2,439.61
4,167.39
58.04
4,167.39
58.04
58.04
22.41
1,818.96
0.97
E side copper capital
£/line
E side copper current
£/line
1.98
D side copper capital
£/line
75.05
D side copper current
£/line
5.71
3,604.06
1,215.00
2,862.35
57.61
1,412.66
2,398.59
10.83
Local exchanges general frames capital
£/line
Edge Ethernet ports (q)
%
£18m
MSAN-METRO Connectivity Link (q)
%
£41m
SG & A partial private circuits (q)
%
£48m
SG & A private circuits (q)
%
£20m
Fully Allocated Costs (£)
4,167.39
1.25
43.57
90.42
7,131.36
362.13
9.02
0.12
120.83
2.30
675.78
11.79
141.65
9.02
48.91
5,039.96
9.38
81.63
19.66
0.91
338.27
10.76
9.38
4,390.67
67.42
287.85
72.75
1,231.07
m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % utilisation;
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
107
9.02
0.12
44.00
0.91
3.70
61.96
84.72
78.50
178.94
540.91
10.40
26.11
1,880.92
3,688.78
1,293.50
3,041.29
41.70
2.74
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
£
£
£
£
£
£
£
£
Components
Unit (d)
Wholesale & LAN extension services electronics
£/le
381.37
337.69
374.31
912.92
Wholesale & LAN extension services fibre etc
£/le
2,778.28
2,037.08
2,055.18
2,094.76
Backhaul extension services electronics
£/le
378.94
882.49
Backhaul extension services fibre etc
£/le
1,918.77
1,924.55
Ethernet main links
£/fibre km
MSAN-BRAS Broadband Link
£/circuit
8.28
9.90
%
£4m
£41m
Access Cards (other services) (q)
%
£26m
36.84
79.31
596.96
543.82
Service Centres - Assurance (q)
%
£49m
36.01
36.01
36.01
36.01
Sales product management (q)
%
£25m
28.11
37.16
98.38
£375m
Wholesale & LAN extension services BNS (q)
£/circuit
£1,923m
Ethernet Access Direct rental
Ethernet Access Direct connection
469.80
3,343.51
45.60
101.44
230.30
%
%
£
14,021.90
MSAN-METRO Connectivity Link
£/circuit
£
77.87
32.97
Wholesale & LAN extension services BNS electronics (q)
£
27.52
234.90
230.30
Service Centres - Provision (q)
Main link rental charges
Ethernet Backhaul Direct rental
£
24.79
AISBO Excess Construction
Fully Allocated Costs (£)
Ethernet Backhaul Direct connection
Backhaul extension services 1000Mbit/s rental
Wholesale extension services 100Mbit/s connection
Wholesale extension services 10Mbit/s connection
Wholesale extension services 1000Mbit/s rental
Wholesale extension services 100Mbit/s rental
Wholesale extension services 10Mbit/s rental
Average cost per unit (from annex 15)
Fully Allocated Cost (£) (h)
Wholesale extension services 1000Mbit/s connection
Alternative interface symmetric broadband origination (up to and inclluding 1Gbit/s)
92.57
£98m
2,475.73
2,581.97
3,739.03
14.25
17.04
42.80
782.69
782.69
782.69
805.22
809.63
850.28
9.80
183.41
72.03
72.03
9.59
21.33
0.94
1,215.71 14,216.70
401.68
1,617.25
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m
m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel renntal; % = % utilisation;
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km
m = £ per fibre km.
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
108
12.09
1,113.64
1,160.52
3,631.57
6.29
3,611.04
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2011 (continued)
for the year ended 31 March 2011
£
£
£
£
£
External IPstream Connect Bandwidth Mkt 2
£
Internal IPstream Connect Bandwidth Mkt 2
£
External Datastream Virtual Paths Mkt 2
External Datastream End user access Rental Mkt 2
External user access connection Mkt 2
Internal End user access connection Mkt 2
£
External IPstream Connect End user access Rental
Mkt 2
£
External IPstream Connect Bandwidth Mkt 1
Internal IPstream Connect Bandwidth Mkt 1
£
External Datastream Virtual Paths Mkt 1
£
Wholesale broadband access market 2 - 2 to 3 principal operators
Internal IPstream Connect End user access Rental Mkt
2
£
External IPstream Connect End user access Rental
Mkt 1
£
Internal IPstream Connect End user access Rental Mkt
1
£
Components
External Datastream End user access Rental Mkt 1
Fully Allocated Cost (£) (h)
External user access connection Mkt 1
Average cost per unit (from annex 15)
Internal End user access connection Mkt 1
Wholesale broadband access market 1 - BT only operator
£
£
Unit (d)
MDF Hardware jumpering
£/line
24.22
Software jumpering
£/line
0.33
E side copper current
£/line
1.98
D side copper current
£/line
5.71
Local exchanges general frames capital
£/line
1.25
Local exchanges general frames current
£/line
1.30
Broadband line testing systems
£/line
ADSL connections
£/conn
Combi Card broadband
£/line
2.92
2.29
1.84
2.51
2.40
2.40
20.48
20.48
20.48
1.84
20.48
1.84
2.40
2.40
20.48
20.48
£/port
160.14
ATM customer interface 34Mbit
£/port
2,124.10
0.09
0.19
0.24
ATM customer interface > 155Mbit
£/port
699.15
12.57
3.14
3.94
ATM network interface
£/port
490.19
7.67
0.98
1.24
8.58
0.87
ATM network switching
£/use
9.27
34.05
8.54
10.72
29.05
4.69
5.89
Inter ATM transmissions
£/use
50.85
90.71
11.95
15.01
93.44
11.45
14.38
ATM customer interface 2Mbit
0.04
2.51
20.48
1.84
0.05
10.73
1.72
2.16
1.10
Internal LLU Tie Cables
£/cable
1.80
Broadband backhaul circuits (excl Virtual Paths)
£/circuit
692,509.31
114.68
28.00
34.85
69.20
11.59
12.35
MSAN-BRAS Broadband Link
£/circuit
32.97
36.09
30.03
30.51
32.91
28.88
28.93
Core/Metro (broadband)
£/circuit
33.07
28.68
28.68
28.68
28.68
28.68
28.68
Geographic broadband adjustments
%
£1m
Special Fault Investigation (q)
%
£0m
2.57
2.57
2.57
2.57
2.57
2.57
95.11
10.24
10.42
95.11
10.24
10.42
370.27
100.69
106.48
%
£18m
Service Centres - Assurance (q)
%
£49m
Sales product management (q)
%
£25m
Service Centres - Provision (q)
%
£98m
Local Loop Unbundling systems development (q)
%
SG & A other access (q)
%
£82m
DSLAM capital/maintenance (q)
%
£307m
Edge Ethernet ports (q)
Fully Allocated Costs (£)
£2m
2.61
4.45
2.61
4.45
6.04
5.32
5.31
25.76
49.53
49.53
54.79
77.73
77.72
422.22
124.36
138.23
2.61
4.45
2.61
4.45
6.04
5.34
5.32
12.03
25.96
25.96
41.06
54.18
54.16
er kilometre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental == £ per hostel rental; % = % utilisation;
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ pe
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per chhannel; £/fibre km = £ per fibre km.
(h) See Section 4 - Basis of Preparation.
(q) This is the total cost not unit cost for this component.
109
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)
Restated for the year ended 31 March 2010 (h)
Components
Unit (d)
E side copper capital
£/line
£
£
£
3.51
£
3.67
£
3.67
£
3.49
£
£
£
£
£
3.49
£
£
1.75
1.75
£
£
£
£
£
£
£
SMPF Rentals
SMPF Connections
MPF Tie Cables
MPF Room Build
MPF Rentals
MPF Connections
£
MPF Hostel Rentals
Wholesale local access
Wholesale ISDN2 external service
transfers
Wholesale ISDN2 internal service
takovers
Wholesale ISDN2 external service
rentals
Wholesale ISDN2 internal service rentals
Wholesale ISDN2 external service
connections
Wholesale ISDN2 internal service
connections
Wholesale premium analogue external
service transfers
Wholesale ISDN2 exchange line
services
Wholesale premium analogue internal
service takeovers
Wholesale premium analogue external
service rentals
Wholesale premium analogue internal
service rentals
Wholesale basic analogue external
service rentals
Wholesale basic analogue internal
service rentals
Wholesale premium analogue external
service connections
Wholesale premium analogue internal
service connections
Fully Allocated Cost (£) (h)
Wholesale basic analogue internal
service connections
Average cost per unit (from annex 15)
Wholesale analogue exchange line
services
£
3.51
E side copper current
£/line
2.73
2.73
2.73
2.73
2.73
1.60
1.60
3.55
D side copper capital
£/line
32.23
33.69
33.69
32.02
32.02
16.04
16.04
32.23
D side copper current
£/line
7.78
7.78
7.78
7.78
7.78
4.55
4.55
10.11
2.33
Local exchanges general frames capital
£/line
2.41
2.41
2.41
2.41
2.41
1.20
1.20
4.81
2.41
Local exchanges general frames current
£/line
1.79
1.79
1.79
1.79
1.79
0.90
0.90
3.59
1.79
PSTN line test equipment
£/line
0.53
0.61
0.53
0.53
0.53
0.42
0.42
£/line
18.71
18.71
18.71
9.35
9.35
4.58
4.58
18.71
18.71
Business PSTN drop maintenance
£/line
4.58
Residential PSTN drop maintenance
£/line
5.16
5.16
5.16
PSTN line cards
£/line
8.13
8.13
8.13
8.13
8.13
0.08
0.08
0.13
0.13
Dropwire capital & PSTN NTE
Pair gain
£/eq
6.52
0.82
18.71
5.16
Routeing & records
£/line
12.37
12.26
12.26
12.26
9.18
9.36
0.32
MDF Hardware jumpering
£/line
19.10
19.10
19.10
19.10
9.55
9.55
23.08
22.07
Software jumpering
£/line
0.35
0.35
0.35
0.35
0.35
0.18
0.18
0.18
0.18
0.31
0.26
Wholesale Access specific
£/trans
5.62
5.62
5.62
5.62
5.62
2.81
2.81
2.81
2.81
ISDN2 drop maintenance
£/channel
3.56
£/channel
21.18
ISDN2 line cards
ISDN2 NTE
£/channel
7.02
Combi Card voice
£/line
2.77
Access Cards (ISDN2 services)
£/channel
0.57
Broadband line testing systems
£/lineline
3.69
DSLAM capital/maintenance
£/lineline
41.66
ADSL connections
£/lineconn
Local Loop Unbundling room build
£/linerooms
2.77
2.77
2.77
3.56
3.56
21.18
21.18
7.02
7.02
0.57
0.57
2.77
2.16
2.17
1.48
6.17
1.01
254.37
Local Loop Unbundling hostel rentals
£/hostel rental
2,284.35
Local Loop Unbundling hostel rentals power & vent
£/hostel rental
1,899.25
Local Loop Unbundling tie cables
£/linecables
Local Loop Unbundling systems development (q)
%
£21m
Directories (q)
%
£39m
254.37
2,284.35
1,899.25
328.66
328.66
0.73
1.76
Service assurance Retail (q)
%
0.00
0.00
Service assurance Global services (q)
%
£0m
Service Centres - Provision (q)
%
£100m
5.86
5.86
5.86
Sales product management (q)
%
£26m
0.05
0.04
0.04
Service Centres - Assurance (q)
%
£50m
External WLR SG & A (q)
%
£4m
Internal WLR SG & A (q)
%
£2m
Fully Allocated Costs (£)
5.62
-
1.76
0.01
1.76
9.31
5.99
0.76
0.61
27.20
5.06
0.15
0.62
0.73
1.22
1.76
0.00
0.00
0.60
0.00
0.00
0.00
0.00
0.06
0.06
0.06
0.06
1.01
1.01
1.01
1.01
0.00
0.00
0.00
0.00
5.80
5.80
15.39
15.71
0.00
0.00
1.00
0.99
0.95
1.92
29.33
0.00
0.93
15.38
15.38
4.65
5.56
0.06
0.05
0.43
0.45 131.10
1.92
0.61
1.53
0.09
1.19
0.00
11.74
43.24
43.23
43.23
90.37
90.28
87.90
87.90
11.42
11.77
49.85
67.93
71.01
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilom
metre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/rroom = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment unitss;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
110
70.99
18.43
18.42
29.52
85.49 400.34 4,217.41 335.21
25.63
13.50
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)(continued)
Restated for the year ended 31 March 2010 (h)
£
£
£
£
£
£
£
SDSL
£
Netstream 16 LL 2Mbit/s connection
£
Radio Backhaul Service - 2 Mbit/s
rentals
Partial and Private Circuits 2Mbit/s connection
£
Radio Backhaul Service - 2 Mbit/s
connection
Radio Backhaul Service - sub 2 Mbit/s
rentals
£
Partial and Private Circuits 2Mbit/s - local
end
Radio Backhaul Service - sub 2 Mbit/s
connection
£
Partial and Private Circuits 2Mbit/s distribution
Partial and Private Circuits 64Kbit/s external local end
£
Partial and Private Circuits 2Mbit/s - link
Partial and Private Circuits 64Kbit/s internal local end
£
Partial and Private Circuits 64Kbit/s trunk
£
Partial and Private Circuits 64Kbit/s distribution
Partial and Private Circuits 64Kbit/s - link
Fully Allocated Cost (£) (h)
Partial and Private Circuits 64Kbit/s connection
Average cost per unit (from annex 15)
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
Components
Unit (d)
E side copper capital
£/line
3.51
4.55
4.55
4.55
1.15
7.68
£
E side copper current
£/line
2.73
2.73
2.73
2.73
0.24
1.58
3.55
D side copper capital
£/line
32.23
41.75
41.75
41.75
10.52
70.38
32.23
3.51
D side copper current
£/line
7.78
7.78
7.78
7.78
0.67
4.50
10.11
Local exchanges general frames capital
£/line
2.41
2.41
2.41
2.41
0.61
4.06
4.81
Local exchanges general frames current
£/line
1.79
3.59
Dropwire capital & PSTN NTE
£/line
18.71
18.71
Residential PSTN drop maintenance
£/line
5.16
5.16
Routeing & records
£/line
12.37
12.37
MDF Hardware jumpering
£/line
19.10
18.35
Software jumpering
£/line
64Kbit PC link connection cct provision (y)
£/circuit
PC rental 64Kbit link
£/link
PC rental 64Kbit link per km transmission
£/km
PC rental 64Kbit link local end
£/le
2Mbit and above PC link connection cct provision
£/circuit
PC rental 2Mbit link
£/link
PC rental 2Mbit link per km distribution
£/km
0.35
1,287.73
0.02
1,287.73
137.44
1,287.73
137.44
3.95
137.44
3.95
3.95
297.25
3.95
310.04
257.99
198.43
1,683.66
1,686.01
144.16
1,682.01
144.16
45.80
1,681.70
144.16
45.80
45.80
PC rental 2Mbit local end copper
£/le
517.63
69.11
57.19
PC rental 2Mbit local end fibre
£/le
722.52
573.56
759.44
PC rental 2Mbit link per km trunk
£/km
22.63
22.63
Broadband line testing systems
£/line
3.69
2.74
DSLAM capital/maintenance
£/line
41.66
41.03
SDSL connections
£/conn
5.19
5.19
Combi Card broadband
£/line
3.22
3.22
Service Centres - Provision (q)
%
£100m
5.60
Sales product management (q)
%
£26m
3.73
Service Centres - Assurance (q)
%
£50m
SG & A private circuits (q)
%
£33m
94.43
11.71
0.19
0.19
148.08
9.07
0.16
0.16
0.66
27.10
282.03
98.78
14.81
0.57
54.85
192.29
20.08
3.52
48.17
SG & A partial private circuits (q)
%
£74m
SG & A other access (q)
%
£18m
MSAN-METRO Connectivity Link (q)
%
£63m
42.04
42.04
Core/Metro connectivity (q)
%
£133m
28.99
28.99
Edge Ethernet ports (q)
%
£37m
Fully Allocated Costs (£)
62.36
134.68
336.57
435.50
322.01
12.47
5.55
1,530.24
158.22
4.30
4.30
396.36
379.57
1,569.76
497.82 2,012.98
255.63
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometrre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibrre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
(y) Unit costs calculated as a weighted average of the 64Kbit PC link connection cct provision & 64Kbit PC link connection cct rearrangements.
111
5.55
49.89
758.88 2,018.58 1,629.50 2,003.71
187.05
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)(continued)
Restated for the year ended 31 March 2010 (h)
PC rental 34Mbit link per km distribution
£/km
PC rental 34Mbit link local end
£/le
4,941.61
PC rental 140Mbit link
£/links
3,752.49
PC rental 140Mbit link per km distribution
£/km
PC rental 140Mbit link local end
£/le
PC rental 2Mbit link per km trunk
£/km
22.63
PC rental 34Mbit link per km trunk
£/km
198.46
PC rental 140Mbit link per km trunk
£/km
247.47
PC rental 622Mbit link per km trunk
£/km
1,064.32
£
£
£
£
£
£
1,684.81
1,687.29
359.18
5,613.97
£
£
1,784.00
3,431.49
3,641.58
587.63
587.63
11,677.25
11,795.85 11,818.55
22.63
198.46
247.47
1,064.32
%
£26m
%
£33m
32.53
84.29
10.92
SG & A partial private circuits (q)
%
£74m
260.81
203.87
19.04
180.74
1,400.38
747.73
£10m
78.19
482.63
17.41
214.52
116.43
5.34
%
£63m
714.60
2,942.46
Core/Metro connectivity (q)
%
£133m
492.89
2,029.54
Edge Ethernet ports (q)
%
£37m
94.34
388.44
1,978.15 2,773.42
389.14
6,542.44
270.68
1.94
11.49
10.69
299.00
1.43
6.53
1.37
610.38 12,066.53 14,501.69 2,083.00
26.00
216.48
2,683.14
71.35
747.73
MSAN-METRO Connectivity Link (q)
Fully Allocated Costs (£)
£
359.18
SG & A private circuits (q)
%
£
1,183.43
Sales product management (q)
Access Cards (other services) (q)
£
Partial and Private circuits 622Mbit/s trunk
£
Partial and Private circuits 140/155Mbit/s trunk
£
Partial and Private circuits 34/45Mbit/s trunk
Partial and Private Circuits 140/155Mbit/s external local end
£
Wholesale trunk segments
Partial and Private circuits 2Mbit/s - trunk
Partial and Private Circuits 140/155Mbit/s internal local end
£
Netstream 16 LL 155Mbit/s connection
Partial and Private Circuits 140/155Mbit/s distribution
1,183.43
Partial and Private Circuits 140/155Mbit/s link
1,683.66
£/links
Partial and Private Circuits 140/155Mbit/s connection
£/circuit
PC rental 34Mbit link
Partial and Private Circuits 34/45Mbit/s external local end
2Mbit and above PC link connection cct provision
Partial and Private Circuits 34/45Mbit/s internal local end
Unit (d)
Partial and Private Circuits 34/45Mbit/s distribution
Components
Partial and Private Circuits 34/45Mbit/s link
Fully Allocated Cost (£) (h)
Traditional interface symmetric broadband
origination (above 45Mbit/s up to and including
155Mbit/s)
Partial and Private Circuits 34/45Mbit/s connection
Average cost per unit (from annex 15)
Traditional interface symmetric
broadband origination (above 8Mbit/s up
to and including 45Mbit/s)
5,579.60 1,980.00
9,601.08
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometrre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/room
m = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibrre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
(am) See Section 4.1 – Introduction to the Basis of Preparation.
112
259.53 1,135.67
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)(continued)
Restated for the year ended 31 March 2010 (h)
ppm
ppm
ppm
0.052
0.052
0.052
0.052
0.052
0.052
0.052
0.052
Local exchange processor
ppm
0.056
0.056
0.056
0.056
0.000
0.000
0.056
0.056
0.000
0.000
Remote - local transmission link
ppm
0.033
0.027
0.027
0.027
0.027
0.027
0.027
0.027
0.027
0.027
0.038
0.038
0.038
0.038
0.038
0.038
0.038
0.038
0.038
0.003
0.003
0.026
Emergency OA (999) non chargeable
ppm
0.008
0.008
0.008
0.008
ppm
Wholesale call termination local exchange stick
(ISDN)
0.052
0.003
ppm
Wholesale call termination local exchange stick
0.052
ppm (per 10km)
ppm
Wholesale call termination local exchange segment
(ISDN)
Wholesale call origination local exchange Stick
(ISDN)
Unit (d)
ppm
ppm
ppm
Retail Sticks
Local exchange concentrator
National OA non chargeable
ppm
Call Termination
basket
Components
Remote - local transmission length
ppm
Retail Sticks
Wholesale call origination local exchange Stick
PPP
Basket
Wholesale PPP
Wholesale call originating local exchange segment
(ISDN) (incl OA)
Wholesale call originating local exchange segment
(incl Operator Assistance)
Fully Allocated Cost (£) (h)
Wholesale call originating local exchange segment
PSTN and ISDN (excl OA)
Average cost per unit (from annex 15)
Call Origination Basket (ad)
Fixed call termination
Wholesale call termination local exchange segment
Call origination on fixed public narrowband
networks
ppm
Main exchange switching
ppm
0.016
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Local - tandem transmission link
ppm
0.031
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Local - tandem transmission length
ppm (per 10km)
0.006
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Product management policy & planning
ppm
0.019
Core/Metro (voice)
ppm
0.004
0.008
0.007
0.010
0.007
0.010
0.007
0.010
0.007
0.010
Border gateway & signalling firewall
ppm
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.019
MSAN-POSI Voice Link
ppm
0.003
0.004
0.003
0.004
0.003
0.004
0.003
0.004
0.003
0.004
Edge Ethernet ports (q)
%
£37m
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
iNode (call set up and features) (q)
%
£21m
0.008
0.007
0.010
0.007
0.010
0.007
0.010
0.007
0.010
0.201
0.201
0.208
0.134
0.141
0.190
0.197
0.134
0.141
Fully Allocated Costs (ppm)
0.019
0m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/room = £ perr room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
excl. Operator Assistance) due to immaterial volumes.
(ad) Does not include the service Wholesale Call originating local exchange segment (ISDN) (e
(ae) Does not include the service Wholesale Single transit segment (ISDN) due to immaterial volumes.
v
113
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)(continued)
Restated for the year ended 31 March 2010 (h)
Technical areas (Interconnect Circuits)
Technical Areas (Point of Handover)
Interconnect Specific Basket
Components
Unit (d)
Interconnect local end rental 2Mbit
£/2Mbit cct
241.23
241.23
Customer Sited Interconnect cct (CSI) 2Mbit link
£/2Mbit cct
220.01
220.01
Customer Sited Interconnect cct (CSI) 2Mbit per km
£/km
Interconnect 2Mbit connection
£/2Mbit cct
10,422.64
Intra Building Circuit (IBC) rental
£/2Mbit cct
124.48
Intra Building Circuit (IBC) connection
£/2Mbit cct
3,253.45
Interconnect extension circuits (IEC) 2Mbit link
£/2Mbit cct
£
5.56
£
£
£/km
In Span Interconnect circuits (ISI) transmission
£/100m
248.09
Nominated In Span I/Connect cct (ISI) transmission
£/100m
62.98
Point of Handover electronics
£/eq
0.79
E side copper capital
£/line
3.51
E side copper current
£/line
2.73
D side copper capital
£/line
32.23
D side copper current
£/line
£
£
£
£
£
£
£
£
£
£
£
£
£
£
£
£
External 3rd Party POH Rental 155Mbit/s
External 3rd Party POH Rental 34/45Mbit/s
External 3rd Party POH Rental 2Mbit/s CLZ
External 3rd Party POH Rental 2Mbit/s non CLZ
External 3rd Party POH Rental 64Kbit/s
In Span Handover rental
In Span Handover connection
Customer Sited Handover rental
Customer Sited Handover connection
Internal Wholesale intra-building circuits rentals
Internal Wholesale standard CSI rental - fixed
External Wholesale rearrangements
External Nominated ISI - per km
£
Internal Wholesale standard CSI rentals - per km
Internal Interconnect
External Wholesale ISI rentals
External Wholesale intra-building circuits rentals
External Wholesale intra-building circuits
connections
External Wholesale IEC rentals - per km
External Wholesale IEC rentals - fixed
£
In span Interconnect
£
241.23
220.01
5.56
2,857.76
5.56
466.06
136.26
1,201.05
136.26
3,253.45
136.26
3,253.45
273.00
Interconnect extension circuits (IEC) 2Mbit per km
89.07
3,253.45
273.00
11.47
11.47
248.09
62.98
710.72
662.36 22,670.95
1,401.70
7.78
Local exchanges general frames capital
£/line
PC rental 64Kbit link local end
£/le
297.25
PC rental 34Mbit link local end
£/le
4,941.61
PC rental 140Mbit link local end
£/le
11,677.25
PC rental 2Mbit local end copper
£/le
517.63
PC rental 2Mbit local end fibre
£/le
722.52
SG & A partial private circuits (q)
%
£74m
MSAN-METRO Connectivity Link (q)
%
£63m
Edge Ethernet ports (q)
%
£37m
Fully Allocated Costs (£)
£
External Wholesale IEC connections
External Wholesale standard CSI rental - fixed
External Wholesale standard CSI connection
Average cost per unit (from annex 15)
Fully Allocated Cost (£) (h)
In Span Interconnect with
Interconnect Extension
Circuit (end to end circuit)
External Wholesale standard CSI rentals - per km
Customer Sited
Interconnect (end to end
circuit)
2.41
36.52
733.12
1,359.27
10.47
42.04
42.04
19.60
6,130.81
85.88
639.54
5.56 3,805.39
86.15
99.56
3.89
14.21
14.35
104.57
204.01
40.41
110.83
113.91
837.69
1,563.28
42.04
24.56
451.30
11.47 3,278.01
136.26
248.09
62.98 1,201.05
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilom
metre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/ro
oom = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
114
503.28
5.56
89.07
710.72
662.36 22,670.95
1,401.70
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2010 (Restated)(continued)
Restated for the year ended 31 March 2010 (h)
£/le
2,285.39
£
Wholesale & LAN extension services fibre etc
£/le
1,583.42
Wholesale & LAN extension services BNS
£/circuit
1,595.96
£
1,571.37 1,582.74 1,632.63
£
£
£
£
£
£
£
£
£
£
£
1,595.96
(r) 11,744.07 10,445.50
£/le
3,244.72
£/le
1,549.65
Wholesale & LAN extension services BNS electronics
£/circuit
Ethernet main links
£/fibre km
Sales product management (q)
%
£26m
Service Centres - Provision (q)
%
£100m
Service Centres - Assurance (q)
%
£50m
59.17
59.17
59.17
59.17
58.05
58.05
(r)
2.85
28.49
284.87
67.51
28.49
284.86
(r)
1,537.57 1,565.76
(r)
(r)
11,034,494.00
199.23
%
£10m
MSAN-METRO Connectivity Link (q)
%
£63m
Core/Metro connectivity (q)
%
£133m
Edge Ethernet ports (q)
%
£37m
£
1,586.32
Backhaul extension services fibre etc
Access Cards (other services) (q)
Main link rental charges
Backhaul network services all bandwidth rental
Backhaul network services all bandwidth connection
Backhaul extension services other bandwidth connection
Backhaul extension services 1000Mbit/s connection
£
(r)
Backhaul extension services electronics
Fully Allocated Costs (£)
Backhaul extension services 100Mbit/s connection
Backhaul extension services other bandwidth rental
Backhaul extension services 1000Mbit/s rental
Backhaul extension services 100Mbit/s rental
8,296.02
£
Wholesale extension services other bandwidth
connection
2,209.61 2,285.39
Wholesale extension services 10Mbit/s connection
Wholesale extension services 1000Mbit/s rental
£
Wholesale extension services 1000Mbit/s connection
Unit (d)
Wholesale & LAN extension services electronics
Wholesale extension services 100Mbit/s connection
Components
Wholesale extension services 100Mbit/s rental
Wholesale extension services 10Mbit/s rental
Average cost per unit (from annex 15)
Fully Allocated Cost (£) (h)
Wholesale extension services other bandwidth rental
Alternative interface symmetric broadband origination (up to and including 1Gbit/s)
199.23
42.02
49.42
120.95
18.71
22.42
25.62
95.12
(r)
1,090.56
913.46
876.70
(r)
9.85
26.19
(r)
(r)
12.53
(r)
2,682.50
(r)
39.43
2.47
58.05
117.34
1,675.41 1,719.82 2,097.62
1,731.71
3,322.59 3,224.47
9,267.84
(r) 1,633.96 1,934.86
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/10
00m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit;
£/ hostel rental = £ per hostel rental; % = % utilisation; £/line = £ per line; £/room = £ pe
er room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per equipment units;
£/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(h) See Section 4 Basis of Preparation.
(q) This is the total cost not unit cost for this component.
(r) De-minimus services with turnover of less than £1m.
115
(r)
(r) 14,439.10 10,445.50
(r) 1,693.44
319.04
Appendix 1 - Other Information
Appendix 1.3 - BT Network Services Reconciliation (Annex 17)
Appendix 1.3.1 - BT Network Services Reconciliation 2011
Non cost accounting, roundings
and residual
Residual
AS SMP Components
Wholesale broadband access
market 2 - 2 to 3 principal
operators
Wholesale broadband access
market 1 - BT only operator
Alternative interface symmetric
broadband origination (up to and
including 1Gbit/s)
Technical Areas (Point of
Handover)
Technical areas (Interconnect
Circuits)
Fixed call termination
14
3
8
10
-
Call origination on fixed public
narrowband networks
Traditional interface symmetric
broadband origination (above
45Mbit/s up to and including
155Mbit/s)
15
3
21
-
Wholesale trunk segments
Traditional interface symmetric
broadband origination (above
8Mbit/s up to and including
45Mbit/s)
Traditional interface symmetric
broadband origination (up to and
including 8Mbit/s)
Wholesale local access
Wholesale analogue exchange
line services
Total (from annex 15)
Fully Allocated Cost (£m) (h)
Wholesale ISDN2 exchange line
services
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Components
Local exchange concentrator
Local exchange processor
Remote - local transmission link
Remote - local transmission length
Product management policy & planning
Interconnect local end rental 2Mbit
Interconnect 2Mbit connection
Interconnect extension circuits (IEC) 2Mbit link
Customer Sited Interconnect cct (CSI) 2Mbit link
Interconnect extension circuits (IEC) 2Mbit per km
Customer Sited Interconnect cct (CSI) 2Mbit per km
In Span Interconnect circuits (ISI) transmission
Nominated In Span I/Connect cct (ISI) transmission
Intra Building Circuit (IBC) connection
Intra Building Circuit (IBC) rental
PC rental 2Mbit link per km distribution
PC rental 2Mbit link per km trunk
PC rental 34Mbit link per km distribution
PC rental 34Mbit link per km trunk
PC rental 140Mbit link per km distribution
PC rental 140Mbit link per km trunk
PC rental 622Mbit link per km trunk
Point of Handover electronics
PC rental 64Kbit link
PC rental 2Mbit link
PC rental 34Mbit link
PC rental 140Mbit link
PC rental 64Kbit link per km transmission
64Kbit PC link connection cct provision
2Mbit and above PC link connection cct provision
PC rental 64Kbit link local end
PC rental 34Mbit link local end
PC rental 140Mbit link local end
PC rental 2Mbit local end copper
PC rental 2Mbit local end fibre
108
107
60
107
22
4
5
3
4
3
4
2
2
13
4
105
38
15
12
18
17
23
4
45
31
3
8
51
1
49
26
23
11
19
190
-
-
-
105
9
45
31
51
1
48
25
18
180
29
12
13
23
-
116
52
50
29
51
22
-
56
55
31
56
-
4
5
3
4
3
4
2
2
13
4
-
4
1
2
1
10
-
-
-
2
4
1
1
1
-
Appendix 1 - Other Information
Appendix 1.3.1 - Network Services Reconciliation 2011 (continued)
Non cost accounting, roundings
and residual
Residual
AS SMP Components
Wholesale broadband access
market 2 - 2 to 3 principal
operators
Wholesale broadband access
market 1 - BT only operator
Alternative interface symmetric
broadband origination (up to and
including 1Gbit/s)
Technical Areas (Point of
Handover)
Technical areas (Interconnect
Circuits)
Fixed call termination
2
1
2
2
-
Call origination on fixed public
narrowband networks
Traditional interface symmetric
broadband origination (above
45Mbit/s up to and including
155Mbit/s)
1
1
1
-
Wholesale trunk segments
Traditional interface symmetric
broadband origination (above
8Mbit/s up to and including
45Mbit/s)
Traditional interface symmetric
broadband origination (up to and
including 8Mbit/s)
Wholesale local access
Wholesale ISDN2 exchange line
services
Wholesale analogue exchange
line services
Fully Allocated Cost (£m) (h)
Total (from annex 15)
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Components
PPC support services
Netstream equipment
Wholesale & LAN extension services electronics
Wholesale & LAN extension services fibre etc
Wholesale & LAN extension services BNS
Backhaul extension services electronics
Backhaul extension services fibre etc
Wholesale & LAN extension services BNS electroni
Ethernet main links
SG & A private circuits
SG & A partial private circuits
National OA non chargeable
Emergency OA (999) non chargeable
SDSL connections
Wholesale Access specific
Routeing & records
MDF Hardware jumpering
Software jumpering
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
Local exchanges general frames current
PSTN line test equipment
Dropwire capital & PSTN NTE
Business PSTN drop maintenance
Residential PSTN drop maintenance
ISDN2 drop maintenance
PSTN line cards
ISDN2 line cards
Pair gain
ISDN2 NTE
Broadband line testing systems
DSLAM capital/maintenance
6
8
51
346
2
7
18
17
96
20
48
8
7
15
238
3
272
59
1,883
169
50
52
5
479
19
85
4
176
27
2
7
67
307
7
11
39
1
222
43
1,541
124
26
27
5
397
19
68
176
2
-
1
6
2
43
5
11
4
27
7
-
4
107
1
40
10
279
30
14
14
71
17
24
7
1
7
11
40
2
14
1
-
1
4
1
-
117
8
-
-
1
2
-
-
47
338
2
6
18
17
88
-
13
1
2
3
3
12
108
11
1
2
2
8
37
1
4
8
1
8
1
2
67
1
2
3
6
6
5
6
23
155
Appendix 1 - Other Information
Appendix 1.3.1 - Network Services Reconciliation 2011 (continued)
Non cost accounting, roundings
and residual
Residual
AS SMP Components
Wholesale broadband access
market 2 - 2 to 3 principal
operators
Wholesale broadband access
market 1 - BT only operator
Alternative interface symmetric
broadband origination (up to and
including 1Gbit/s)
Technical Areas (Point of
Handover)
Technical areas (Interconnect
Circuits)
Fixed call termination
Call origination on fixed public
narrowband networks
Wholesale trunk segments
Traditional interface symmetric
broadband origination (above
45Mbit/s up to and including
155Mbit/s)
Traditional interface symmetric
broadband origination (above
8Mbit/s up to and including
45Mbit/s)
Traditional interface symmetric
broadband origination (up to and
including 8Mbit/s)
Wholesale local access
Wholesale analogue exchange
line services
Total (from annex 15)
Fully Allocated Cost (£m) (h)
Wholesale ISDN2 exchange line
services
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Components
ADSL connections
SG & A other access
Local Loop Unbundling room build
Local Loop Unbundling hostel rentals
Local Loop Unbundling hostel rentals power & vent
Local Loop Unbundling tie cables
Local Loop Unbundling systems development
Directories
Service assurance Retail
Service Centres - Provision
Sales product management
Service Centres - Assurance
Combi Card voice
Combi Card broadband
Access Cards (ISDN2 services)
Core/Metro (voice)
Border gateway & signalling firewall
MSAN-POSI Voice Link
Access Cards (other services)
MSAN-METRO Connectivity Link
Core/Metro connectivity
Edge Ethernet ports
iNode (call set up and features)
ATM customer interface 2Mbit
ATM customer interface 34Mbit
ATM customer interface > 155Mbit
ATM network interface
ATM network switching
Inter ATM transmissions
Internal LLU Tie Cables
Broadband backhaul circuits (excl Virtual Paths)
Special Fault Investigation
MSAN-BRAS Broadband Link
Core/Metro (broadband)
Geographic broadband adjustments
Low Tisbo Equipment Depn
High Tisbo Equipment Depn
Very High Tisbo Equipment Depn
Low Tisbo Excess Construction
AISBO Excess Construction
5
82
33
45
20
2
38
99
24
50
17
163
13
26
41
119
18
23
1
3
12
6
39
59
14
65
72
160
161
31
2
38
36
4
27
17
-
1
1
1
-
33
45
20
1
8
2
6
-
2
13
2
31
-
5
3
2
2
11
2
-
-
5
7
-
6
8
-
-
-
38
6
6
19
35
19
-
1
27
1
1
2
44
3
4
1
11
16
4
34
14
35
33
-
1
17
1
1
1
28
2
1
1
4
10
2
9
9
22
21
-
3
38
1
14
9
7
91
2
2
2
92
9
8
1
3
7
4
24
33
8
22
49
84
107
-
1
3
4
-
-
-
3
-
-
1
-
-
-
-
-
-
4
-
-
-
SMP Accounting Separation components
Residual components
Roundings
175
2,550
4
TOTAL
9,869
175
2,550
118
Appendix 1 - Other Information
Appendix 1.3.2 - BT Network Services Reconciliation 2010 (Restated)
Consolidation Statement (a summary of all wholesale markets where there are cost accountin
ng obligations)
Fully Allocated Cost (£m) (h)
Total (from
annex 15)
Wholesale analogue
exchange line services
Wholesale ISDN2 exchange line
services
Non cost
accounting,
roundings and
residual
Wholesale local access
Components
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
Local exchanges general frames current
PSTN line test equipment
Dropwire capital & PSTN NTE
Business PSTN drop maintenance
Residential PSTN drop maintenance
PSTN line cards
Pair gain
Routeing & records
MDF Hardware jumpering
Software jumpering
ADSL connections
Wholesale Access specific
ISDN2 drop maintenance
ISDN2 line cards
ISDN2 NTE
Directories
Service assurance Retail
Service assurance Global services
Service Centres - Provision
Sales product management
Service Centres - Assurance
External WLR SG & A
Internal WLR SG & A
Broadband line testing systems
DSLAM capital/maintenance
Local Loop Unbundling room build
Local Loop Unbundling hostel rentals
Local Loop Unbundling hostel rentals power & vent
Local Loop Unbundling tie cables
Local Loop Unbundling systems development
Combi Card voice
Access Cards (ISDN2 services)
93
81
843
231
95
71
13
469
24
99
180
2
23
250
4
13
37
4
27
9
39
0
0
100
26
50
4
2
52
335
0
23
19
10
21
61
1
81
60
739
172
53
39
13
415
24
87
181
2
21
33
1
2
2
20
6
1
1
1
12
36
1
4
26
9
39
0
0
37
1
22
8
11
71
31
20
15
41
11
1
1
0
1
93
1
2
0
0
4
1
2
1
2
12
3
6
13
6
0
23
19
9
9
62
1
119
1
7
3
20
20
16
(1)
1
0
1
(1)
0
0
123
2
11
0
0
1
0
0
0
0
15
13
13
3
0
39
329
0
0
0
1
12
(1)
0
Appendix 1 - Other Information
Appendix 1.3.2 - Network Services Reconciliation 2010 (continued)
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Fully Allocated Cost (£m) (h)
Total (from
annex 15)
Call origination on fixed
public narrowband
networks
Local-tandem conveyance and
transit on fixed public
narrowband networks
Single transit on fixed public
narrowband networks
Non cost
accounting,
roundings and
residual
Fixed call
termination
Components
National OA non chargeable
Emergency OA (999) non chargeable
Local exchange concentrator
Local exchange processor
Remote - local transmission link
Remote - local transmission length (c)
Product management policy & planning
Main exchange switching
Local - tandem transmission link
Local - tandem transmission length (c)
Core/Metro (voice)
Border gateway & signalling firewall
MSAN-POSI Voice Link
Edge Ethernet ports
iNode (call set up and features)
1
8
101
109
53
74
38
26
27
20
16
0
7
37
21
1
8
49
51
26
36
37
7
0
3
0
7
1
0
13
27
20
0
0
3
1
0
0
0
0
2
120
52
54
27
38
7
0
3
0
8
0
0
0
3
0
0
1
10
0
0
1
0
1
35
4
Appendix 1 - Other Information
Appendix 1.3.2 - Network Services Reconciliation 2010 (continued)
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Traditional interface
Traditional interface symmetric Traditional interface symmetric
symmetric broadband
broadband origination (above broadband origination (above
origination (up to and
8Mbit/s up to and including
45Mbit/s up to and including
Total (from
annex 15)
including 8Mbit/s)
45Mbit/s)
155Mbit/s)
Fully Allocated Cost (£m) (h)
Wholesale trunk
segments
Non cost
accounting,
roundings and
residual
Components
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
Local exchanges general frames current
Dropwire capital & PSTN NTE
Residential PSTN drop maintenance
Routeing & records
MDF Hardware jumpering
Software jumpering
Service Centres - Provision
Sales product management
Service Centres - Assurance
SG & A other access
PC rental 2Mbit link per km distribution
PC rental 2Mbit link per km trunk
PC rental 34Mbit link per km distribution
PC rental 34Mbit link per km trunk
PC rental 140Mbit link per km distribution
PC rental 140Mbit link per km trunk
PC rental 622Mbit link per km trunk
PC rental 64Kbit link
PC rental 2Mbit link
PC rental 34Mbit link
PC rental 140Mbit link
PC rental 64Kbit link per km transmission
64Kbit PC link connection cct provision
64Kbit PC link connection cct rearrangements
2Mbit and above PC link connection cct provision
PC rental 64Kbit link local end
PC rental 34Mbit link local end
PC rental 140Mbit link local end
PC rental 2Mbit local end copper
PC rental 2Mbit local end fibre
PPC support services
Low Tisbo equipment depreciation
Low Tisbo ECC equipment depreciation
Netstream equipment
High Tisbo equipment depreciation
Very High Tisbo equipment depreciation
SG & A private circuits
SG & A partial private circuits
Broadband line testing systems
DSLAM capital/maintenance
SDSL connections
Combi Card broadband
Access Cards (other services)
MSAN-METRO Connectivity Link
Core/Metro connectivity
Edge Ethernet ports
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
18
100
37
17
13
17
16
18
46
31
3
9
38
2
1
64
34
23
13
21
175
6
38
3
7
7
0
33
74
(ab)
(ab)
0
26
10
63
133
(aa)
1
1
10
2
1
0
0
0
0
0
0
0
0
0
0
100
8
29
18
0
14
14
2
13
18
46
32
38
3
1
64
33
4
0
10
0
0
23
12
20
169
1
38
3
6
2
2
1
1
7
24
63
0
0
0
0
9
6
1
1
3
0
1
1
3
2
2
0
8
6
1
121
5
2
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
(ah)
18
0
0
(1)
(1)
3
1
0
0
(1)
(1)
(1)
0
(1)
0
0
1
(1)
1
0
1
0
0
0
0
0
0
2
4
(ab)
(ab)
0
26
2
6
119
(aa)
Appendix 1 - Other Information
Appendix 1.3.2 - Network Services Reconciliation 2010 (continued)
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Fully Allocated Cost (£m) (h)
Total (from
annex 15)
Alternative interface symmetric
broadband origination (up to
and including 1Gbit/s)
Technical areas
(Interconnect Circuits)
Technical Areas (Point of
Handover)
AS SMP
Components
Residual
Non cost
accounting,
roundings and
residual
Components
E side copper capital
E side copper current
D side copper capital
D side copper current
Local exchanges general frames capital
PC rental 64Kbit link local end
PC rental 34Mbit link local end
PC rental 140Mbit link local end
PC rental 2Mbit local end copper
PC rental 2Mbit local end fibre
SG & A partial private circuits
Interconnect local end rental 2Mbit
Interconnect 2Mbit connection
Interconnect extension circuits (IEC) 2Mbit link
Customer Sited Interconnect cct (CSI) 2Mbit link
Interconnect extension circuits (IEC) 2Mbit per km
Customer Sited Interconnect cct (CSI) 2Mbit per km
In Span Interconnect circuits (ISI) transmission
Nominated In Span I/Connect cct (ISI) transmission
Intra Building Circuit (IBC) connection
Intra Building Circuit (IBC) rental
Point of Handover electronics
Wholesale & LAN extension services electronics
Wholesale & LAN extension services fibre etc
Wholesale & LAN extension services BNS
Backhaul extension services electronics
Backhaul extension services fibre etc
Wholesale & LAN extension services BNS electronics
Ethernet main links
AISBO ECC equipment depreciation
Service Centres - Provision
Sales product management
Service Centres - Assurance
Access Cards (other services)
MSAN-METRO Connectivity Link
Core/Metro connectivity
Edge Ethernet ports
SMP Accounting Separation components
Residual components
Roundings
TOTAL
(ah)
(ah)
(ah)
(ah)
(ah)
(x)
(ag)
(ai)
(x)
(x)
(x)
4
6
4
4
3
3
2
2
17
10
5
85
184
1
15
15
11
62
3
(ah)
(ah)
(ah)
(ag)
(x)
(x)
(aa)
0
0
0
0
0
0
1
0
1
5
1
(ah)
(ah)
(ah)
(ah)
(ah)
(x)
(ag)
(ai)
(x)
(x)
(x)
0
0
0
1
(1)
0
0
0
0
1
0
5
0
0
1
0
0
(1)
0
(ah)
(ah)
(ah)
(ag)
(x)
(x)
(aa)
4
6
4
3
4
3
2
2
17
9
5
1
80
184
1
14
15
11
63
3
32
8
7
5
37
0
518
518
2,498
2,498
8
8,405
(c) Unit of length is 10 kilometres.
(h) See Section 4 Basis of Preparation.
(x) Total for this component is shown under the Traditional interface symmetric broadband origination (up to & including 8Mbit/s) market abo
ove.
(aa) Total for this component is shown under the Fixed call termination market above.
(ab) Total for this component is shown under the Wholesale local access market above.
(ag) Total for this component is shown under the Traditional interface symmetric broadband origination (above 8Mbit/s up to and including 4
45Mbit/s) market above.
(ah) Total for this component is shown under the Wholesale residential analogue exchange line services market above.
(ai) Total for this component is shown under the Traditional interface symmetric broadband origination (above 45Mbit/s up to and including 155Mbit/s) market above.
122
Appendix 2 - Price Control Statements
Appendix 2 - Price Control Statements
Appendix 2
Price Control Statements
123
Appendix 2 - Price Control Statements
Appendix 2.1 - Price Controls in Access and Other Wholesale Markets (Annex 24)(Unaudited)
This Appendix shows an extract from the most recent price control submissions to Ofcom to meet BT's price control obligations.
Price Control summary of calls information submitted to Ofcom for the year from 1 October 2009 to 30 September 2010.
Basket
Call Termination
Call Origination
Interconnect Specific
PPP Basket
RPI between
June 2009 &
June 2010 Charge Control
-1.60%
-1.60%
-1.60%
-1.60%
RPI + 3.75%
RPI + 2.75%
RPI + 3.75%
RPI + 1.5%
Controlling %
Actual Basket
Yield
2.15%
1.15%
2.15%
-0.10%
£2.54m
£1.56m
£0m
£0m
Price Control summary of PPC information submitted to Ofcom for the year from 1 October 2009 to 30 September 2010.
Basket
TI Basket
Equipment
Ancillary
RPI between
June 2009 &
June 2010 Charge Control
-1.60%
-1.60%
-1.60%
RPI - 3.25%
RPI - 0%
RPI - 0%
Controlling %
Actual Basket
Yield
-4.85%
-1.60%
-1.60%
-5.02%
-1.30%
0.00%
Price Control summary of WLR information submitted to Ofcom for the year from 23 November 2009 to 31 March 2010.
Cap
WLR Basic Rental
WLR Transfer
WLR Connection
Fixed Ceiling to 31
March 2010
Actual Price
31 March 2010
£100.68
£3.00
£67.00
£100.68
£3.00
£67.00
Price Control summary of Wholesale Local Access information submitted to Ofcom for the year from 22 May 2009 to 31 March 2010.
Cap
MPF Rental
SMPF Rental
Fixed Ceiling to 31
March 2010
Actual Price
31 March 2010
£86.40
£15.60
£86.40
£15.60
124
Appendix 2 - Price Control Statements
Appendix 2.1 - Price Controls in Wholesale Markets (Annex 24)(continued)
Basket
MPF Ancillary
SMPF Ancillary
Co-Mingling
Sub Cap
MPF Transfer
MPF New Provide - from 22 May 2009 to 31 August 2009
MPF New Provide - from 1 September 2009 to 31 March 2010
SMPF Connection
Sub Cap
MPF Cease
SMPF Cease
Controlling % to 31
March 2010
Price Change to
31 March 2010
3.00%
3.00%
3.00%
0.84%
2.18%
3.96%
Fixed Ceiling to 31
March 2010
Actual Price
31 March 2010
£38.00
£99.95
£76.00
£38.00
£38.00
£99.95
£76.00
£38.00
Controlling % to 31
March 2010
Price Change to
31 March 2010
3.00%
3.00%
2.86%
2.86%
Price Control summary of AISBO information submitted to Ofcom for the year 1 October 2009 to 30 September 2010.
Basket
Ethernet core services
Accommodation products
Accommodation fee
Ethernet ancillary services
Sub-cap
BES
Controlling % to 30
September 2010
Price Change to
30 September
2010
RPI - 7%
3.00%
RPI - 0%
RPI - 0%
-£41.45m
£0.69m
-2.00%
-£0.71m
Controlling % to 30
September 2010
Price Change to
30 September
2010
RPI - 0%
-£4.22m
125
Glossary
Glossary
Glossary
126
Glossary
Glossary (continued)
Glossary
21CN
21st Century Network.
Accounting
Documents
The Primary Accounting Documents, DAM, DVM, LRIC: R&P and Wholesale
Catalogue.
Accounting
Separation
Accounting separation requirements arise where there is an obligation to
not unduly discriminate and/or there is a reasonable concern that a Dominant Provider may make cross-subsidies, e.g. the means by which a margin
squeeze may be funded.
Cost accounting
Cost accounting obligations are to meet the requirements where there is an
obligation in relation to:
Price controls.
Cost orientation.
Cost recovery.
CP
Communications Provider.
CPS
Carrier Pre-Selection.
ADSL
Asymmetric Digital Subscriber Line.
CSH
Customer Sited Handover.
AISBO
Alternative Interface Symmetric Broadband Origination.
CSI
Customer Sited Interconnect.
Annual Report
BT Group plc's Consolidated Group Financial Statements for the year ended
31 March. These are available on the BT website at http://www.bt.com.
ASBO
Asymmetric Broadband Orgination.
Current Cost
Accounting
("CCA") adjustments
ATM
Asynchronous Transfer Mode.
The change to historical costs arising from the revaluation of assets on a current cost basis. In the statements for individual markets the adjustments
comprise the holding gains or losses arising from changes in asset values,
together with the effect on asset values and depreciation of the appropriate
allocation of current cost asset values between markets, Technical Areas and
Wholesale services.
Baskets
Baskets are collections of services not considered to be competitive and for
which prices are subject to specific charge controls.
Cust
Customers.
BES
Backhaul Extension Services.
DAM
BNS
Backhaul Network Services.
The Detailed Attribution Methods. This sets out the detailed processes by
which revenues and costs are attributed to the markets, Technical Areas and
Wholesale services.
ca
Cables.
DLRIC
LRIC plus a share of common costs.
cct
Circuits.
DSAC
Stand alone cost (SAC) excluding a share of core common costs.
CELA
Central and East London Area.
D-side
Distribution side.
chann
Channels.
DSL
Digital Subscriber Line.
CLZ
Central London Zone.
DSLAM
Digital Subscriber Line Access Multiplexer.
Components
Within these Statements, the term components includes both network components and network parts.
DVM
The Detailed Valuation Methodology. This sets out the methodology by
which current cost valuations are obtained.
conn
Connections.
EAD
Ethernet Access Direct.
EBD
Ethernet Backhaul Direct.
EBITDA
Earning before interest, tax, depreciation and amortisation.
127
Glossary
Glossary (continued)
eq
Equipment units.
EOI
Equivalence of Input.
E-side
Exchange side.
FPN
Fixed public narrowband.
FRIACO
Flat Rate Internet Access Call Origination.
HCA
Historic Cost Accounting.
IEC
Interconnection Extension Circuit.
ISH
In-Span Handover.
ISI
In-Span Interconnect.
ITC
Glossary (continued)
Mean capital
employed
(“MCE”)
Mean capital employed is defined as total assets less current liabilities,
excluding corporate taxes and dividends payable, and provisions other than
those for deferred taxation. The mean is computed from the start and end
values for the period.
MEA
Modern Equivalent Asset.
mm
Millions of minutes.
MPF
Metallic Path Facilities.
ms
Million seconds.
n/a
Not applicable.
The basis on which interconnect charges have been set with effect from 1
October 1997.
Inter-Tandem Conveyance.
Network Charge
Control regime
("NCC")
ITT
Inter-Tandem Transit.
NGA
Next Generation Access.
km
Kilometres.
NTS
Number Translation Services.
le
Local ends.
Ofcom
Office of Communications.
Line
Lines.
lk
Links.
Other communications providers
Other telecommunication companies operating in the UK, which purchase
telecommunication services from BT.
LLCS
Local Lines Costing Study.
PADS
LLMR
Leased Lines Market Review.
Primary Accounting Documents which set out the framework within which
the Current Cost Financial Statements are prepared.
LLU
Local Loop Unbundling.
PECN
Public Electronic Communications Network.
Long Run Incremental Cost
("LRIC")
Defined as the cost caused by the provision of a defined increment of output
given that costs can, if necessary, be varied and that some level of output is
already produced.
PIPeR
Physical Inventory for Planning and eRecords.
PoH
Point of Handover.
LTC
Local-tandem conveyance.
PPC
Partial Private Circuit.
LTT
Local-tandem transmission.
PPM
Pence per Minute.
m
Metres.
PPP
Product management, policy and planning.
PRS
Premium Rate Services.
128
Glossary
Glossary (continued)
r
Rooms.
RBS
Radio Base Station Backhaul.
Relationships
and Parameters
("R&P")
The BT publication "Long Run Incremental Cost Model: Relationships and
Parameters" describes in detail how BT has applied the principles contained
within the LRIC Methodology section of the Accounting Documents to construct cost volume relationships and to calculate LRIC. The R&P also contains
appendices which detail the relationships and parameters used within the
model.
reval. adj.
CCA Revaluation Adjustment. See Section 4 - Basis of Preparation.
SDH
Synchronous Digital Hierarchy.
SDSL
Symmetric Digital Subscriber Line.
Stand alone cost
("SAC")
The stand alone cost of an activity or subset of activities is the cost incurred
in providing that activity or activities of services by itself. Stand alone cost
will include all direct variable, activity specific fixed costs, common fixed
costs and joint costs associated with the activity or subset of activities in
question.
SG&A
Sales, General and Administration.
SMP
Significant Market Power.
SMPF
Shared Metallic Path Facilities.
TDM
Time Division Multiplexing.
TISBO
Traditional Interface Symmetric Broadband Orgination.
tover
Takeovers.
Trans
Transactions.
VIC
Virtual Interconnect Circuit.
VoIP
Voice over IP.
Usage Factors
Usage Factors refer to the usage of any network component, including conveyance components.
WES
Wholesale Extension Services.
Glossary (continued)
129
Wholesale cost
accounting
Cost accounting in Wholesale markets deals with products and services sold
to Communications Providers.
WLR
Wholesale Line Rental.
-
A numerical value of zero.
zero
A numerical value of <£0.5m and >£(0.5)m.
<1
A value of below £1m.
Additional Information
Additional Information
Additional Information
130
Additional Information
Hard copy versions of the published Current Cost Financial Statements, Primary Accounting
Documents, Detailed Attribution Methods, Detailed Valuation Methodology and Long Run Incremental
Cost Model: Relationships and Parameters can be obtained from:
Shareholder helpline
Tel: Freefone 0808 100 4141
Fax: 01903 833371
Textphone: Freefone 0800 169 6907
From outside the UK:
Tel: +44 121 415 7178
Fax: +44 1903 833371
Textphone: Freephone +44 121 415 7028
E-mail: [email protected]
Website: www.shareview.co.uk
The Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
Website: www.equiniti.com
Electronic copies of the above documents are also available from the following website:
www.btplc.com/Thegroup/RegulatoryandPublicaffairs/Financialstatements/index.htm
131