Current Cost Financial Statements for 2012
including Openreach Undertakings
Ofcom Statement on BT’s Current Cost Financial Statements 2011/12
Introduction
Change of accounting methodology for scrap copper sales
Relevant, reliable and timely regulatory 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 previously offset income from sales of scrap copper against depreciation from access
cables. BT has explained that it now has access to more detailed information which has
established that 97% of scrap copper revenue comes from redundant core rather than access
cables. BT has therefore allocated other operating income relating to copper cable sales to
Residual Activities. Around 3% of the value is still apportioned against access depreciation.
This methodology change impacted the Wholesale Local Access and Wholesale Analogue
Exchange Line Services markets the most, although below the threshold that would trigger a
restatement.
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.
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.
Notwithstanding this, Ofcom believes that we can be helpful to users of the accounts by
drawing attention to several important aspects of BT’s 2011/12 RFS.
Technical Areas (Interconnect Circuits) restatement
In Section 4.1, BT has explained that in the Technical Areas (Interconnect Circuits) Market
the 2010/11 comparative figures have been restated following a change in the attribution
of costs.
As a result we observe that this has moved £6m of costs from the Technical Areas
(Interconnect Circuits) Market for 2010/11 with the difference reflected in Wholesale
Residual.
Current Cost Accounting – valuation of assets
In 2011/12, a number of factors resulted in a decrease in the valuation of assets by £0.2bn
compared to the decrease of £1.2bn in 2010/11. In Section 4.1 BT describes how these
values were derived and the assumptions and estimates used to calculate access network
asset valuation. BT has explained that one part of the valuation that has changed due to the
use of a new management system is the average surface mix. BT has stated that further
verification of the new system of estimating surface mix is required to ensure its reliability.
PricewaterhouseCoopers LLP has included an ‘emphasis of matter’ paragraph in relation to
this in their audit report.
Partial Private Circuit (PPC) volumes
During 2011/12, BT reviewed the database that supports the system used to calculate PPC
volumes. BT explained that the review of the database reflected new and improved data and
resulted in some changes in the pointing of circuits to services. BT has explained that, as the
information was based on the new data, it would not have been able to produce the
numbers for 2010/11, making a restatement for these changes in 2010/11 not practicable.
Review of Co-Mingling costs
BT reviewed co-mingling costs and concluded that insufficient power equipment costs were
attributed to co-mingling services. BT also said that those costs were incorrectly apportioned
between room build and hostel rental services. This change is below the threshold that
would trigger a restatement of market results but affects both Fully Allocated Cost (FAC) and
Distributed Stand Alone Costs (DSAC) calculations for those services, with room build FAC
being significantly higher in 2011/12 than it was in 2010/11.
For tie cable services, previously costs were recorded for rental and connections whilst
volumes and rentals corresponded to connections alone. These have now been changed to
include rentals and connections.
Cost Volume Relationships
As explained by BT in Section 3.4 of the “Long Run Incremental Cost Model: Relationships
and Parameters” 2012 document, BT has updated some Cost Volume Relationships (CVRs)
and other assumptions to be consistent with the Long Run Incremental Cost (LRIC) principles
of a minimum network. The changes have resulted in BT identifying a greater proportion of
its costs to be Fixed Common Costs (FCC). BT has explained that CVRs and dependencies will
continue to be reviewed.
Audit opinions
BT has stated in Section 4.1 that the revenues and costs for the TISBO (above 8Mbit/s up to
an including 45Mbit/s), TISBO (above 45Mbit/s up to an including 155Mbit/s) and
Wholesale Trunk segments markets have declined such that the ‘fairly presents’ audit
Ofcom Statement on BT’s Current Cost Financial Statements 2011/12 (continued)
requirement cannot be met for these markets as it is not practical to determine the
objectivity of cost attribution methodologies or the accuracy of supporting data at the
required level of granularity. As a result the audit requirement in respect of these markets
has been modified by agreement with Ofcom from ‘fairly presents’ to ‘properly prepared’.
We expect that WBA markets 1 and 2 will be audited to the ‘fairly presents’ standard in the
2012/13 RFS.
A fundamental review of the reporting framework
We believe it is important that our 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 work with BT to improve the 2012/13 RFS, for example to reflect our
market review decisions and technological developments.
As proposed in our Statement on BT’s 2010/11 Current Cost Financial Statements, we are
now conducting a fundamental review of the regulatory reporting framework to ensure that
it is fit for purpose, provides good quality data and provides an effective basis for monitoring
compliance. Following our Request for Inputs from users of the Financial Statements,
published in November 2011, we now expect to publish the first of two consultations on
BT’s regulatory financial reporting requirements later this summer.
Ofcom
31 July 2012
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 1.1 - Introduction: Regulation in the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 1.2 - Regulatory Financial Reporting Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 1.3 - Regulatory Financial Overview (Annex 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 1.4 - Regulatory Financial Review (Annex 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 8.1 - Financial Performance in Other Wholesale Markets (Annex 8) . . . . . . . . . . . . . . . . . . . . . .58
Section 8.2 - Review of Other Wholesale Markets (Annex 10 & 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Section 8.2.1 - Market Group Level Review (Annex 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Section 8.2.2 - Market Level Financial Review of Other Wholesale SMP Markets (Annex 14) . . . . .60
Section 8.3 - Call origination on fixed public narrowband networks (Annex 13) . . . . . . . . . . . . . . . . . . .65
Section 8.4 - Single transit on fixed public narrowband networks (Annex 13) . . . . . . . . . . . . . . . . . . . . .67
Section 8.5 - Technical areas (Interconnect Circuits)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.6 - Fixed call termination (Annex 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Section 8.7 - Wholesale trunk segments (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Section 8.8 - Technical areas (Point of Handover)(Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
Section 8.9 - Wholesale Broadband Access: Market 1 (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
Section 8.10 - Wholesale Broadband Access: Market 2 (Annex 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
Section 2 - Statement of Responsibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.1 - Statement of Responsibility (Annex 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 3 - Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.1 - Report of the Independent Auditors (Annex 23). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4 - Basis of Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.1 - Introduction to the Basis of Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.2 - Other Aspects to the Basis of Preparation (Annex 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5 - Summary of Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.1 - Consolidated Performance Summary (Annex 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed . . . . . . . . . . . . . . . . . . . 21
Section 6.1 - Attribution of Wholesale Current Costs 2012 (Annex 5A) . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.1.1 - Notes on Wholesale sector costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.2 - Attribution of Wholesale Current Costs 2011 (Annex 5A) . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.3 - Attribution of Wholesale Current Cost Mean Capital Employed 2012 (Annex 6A) . . . . . .
Section 6.3.1 - Notes on Wholesale MCE sector costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 6.4 - Attribution of Wholesale Current Cost Mean Capital Employed 2011 (Annex 6A) . . . . . .
22
23
24
25
26
27
Section 7 - Review of Access Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
30
30
31
36
38
40
41
47
49
51
55
1
Section 9 - Reconciliation Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 9.1 - BT Reconciliation Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 9.1.1 - BT Reconciliation Statement 2012 (Annex 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 9.1.2 - BT Reconciliation Statement 2011 (Annex 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
Section 9.1.3 - BT Reconciliation Statement MCE (Annex 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Section 10 - Openreach Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.1 - Openreach Income Statement 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Section 10.2 - Openreach Income Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Section 10.3 - Openreach MCE Statement 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
Section 10.4 - Openreach MCE Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Section 10.5 - Reconciliation of Openreach Income Statement 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 10.6 - Reconciliation of Openreach Income Statement 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Section 10.7 - Openreach Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92
Appendix 1 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Appendix 1.1 - Network Activity Statements (Annex 15). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95
Appendix 1.1.1 - Network Activity Statement - Consolidated 2012 . . . . . . . . . . . . . . . . . . . . . . . . . .95
Appendix 1.1.2 - Network Activity Statement - Consolidated 2011 . . . . . . . . . . . . . . . . . . . . . . . . . .98
Appendix 1.2 - Calculation of FAC based on component costs and usage factors (Annex 16). . . . . . . .101
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 . . . . . . . .101
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 . . . . . . . .108
Appendix 1.3 - BT Network Services Reconciliation (Annex 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Appendix 1.3.1 - BT Network Services Reconciliation 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Appendix 1.3.2 - BT Network Services Reconciliation 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
Contents
Current Cost Financial Statements
Page
Appendix 2 - Price Control Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Appendix 2.1 - Price Controls in Access and Other Wholesale Markets (Annex 24)(Unaudited) . . . . . 122
Glossary and Footnotes List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
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:
Introduction: Regulation
Regulation in
in the
the UK
UK
Section
Where a provider has SMP, the Communications Act enables Ofcom to impose one or more obligations
in relation to each market, including:
The UK telecoms industry is regulated through various European directives, the Communications Act
2003 (the Communications Act), Ofcom (the UK’s independent regulator), and other regulations and
recommendations.
The Communications Act
The Communications Act gives Ofcom legal powers and sets out the legal requirements for how
electronic communications services should be regulated in the UK. It includes the conditions imposed
by the European directives. The Government is currently reviewing our sector’s regulatory regime which
will result in a new framework in 2015. The review is focusing on how growth and innovation can be
encouraged and on removing unnecessary regulation and barriers to growth.
Ofcom
Ofcom is the independent regulator and competition authority for the whole UK communications
market. Its main duties are:
• to further the interests of citizens in relation to communications matters
• to further the interests of consumers in relevant markets, where appropriate by promoting
competition.
• 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 CPs such as the provision of network access, the use of the network
and the availability of various facilities. Obligations may include price 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 we have complied with our cost
accounting and accounting separation obligations. Ofcom also imposes certain audit
requirements in respect of the published Financial Statements.
Impact of Ofcom regulation
Ofcom sets out conditions under the Communications Act and directions under these conditions. Some
conditions apply to all Communications Providers (CPs). Others apply to certain individual providers
Ofcom has decided are “universal service providers” or have Significant Market Power (SMP) in a
particular market. Anyone can appeal against Ofcom’s regulatory decisions through a number of legal
processes including the Competition Appeal Tribunal.
The general conditions that apply to all CPs are mainly about protecting consumer general access and
interconnection, planning for emergencies, providing information to Ofcom, and telephone numbers.
We are the designated universal service provider for the UK (excluding the Hull area where KCOM Group
is the designated provider) and so we have certain universal service obligations. This is an important
responsibility that we take very seriously. Our primary obligation is to make sure that basic fixed-line
services are available at an affordable price to all citizens and consumers in the UK. We are also required
to provide public payphones.
SMP designations
The European directives require Ofcom to review relevant communications markets regularly, usually
every three years, and to decide whether any CP has SMP in those markets. If Ofcom decides that a CP
has SMP, it may impose appropriate controls, typically on the prices which the CP can charge. Where
Ofcom decides a company has SMP it will also generally make sure that charges are reasonably based
on costs plus an appropriate return on the capital invested.
Where Ofcom finds that a provider has SMP, it must impose appropriate remedies that may include
price controls. At 31 March 2012, as a result of previous market reviews, we were deemed to have SMP
in a number of markets. These markets are listed in Section 1.2 - Regulatory Financial Reporting
Obligations.
4
Around 90% of Openreach’s revenue comes from products that are regulated by Ofcom. The main
exception is Ethernet services at speeds above 1Gbit/s. In addition, while fibre broadband is a regulated
service, it is not currently subject to explicit price regulation by Ofcom, and is instead priced on a
commercial basis in order to encourage investment.
There have been a number of regulatory decisions and outcomes of appeals in 2012 that will impact us
in the future. In particular, the charge controls imposed on our Wholesale Line Rentals (WLR) and Local
Loop Unbundling (LLU) pricing, which we are appealing, have reduced the prices we can charge for
these products with effect from April 2012. There are also ongoing disputes and appeals that could
impact us.
Ofcom are reviewing the Business Connectivity Market (covering products such as Ethernet and leased
lines) and the Leased Line Charge Control during 2012/13 and have issued their consultations on 18
June 2012 and 5 July 2012 respectively. Ofcom is also expected to carry out a review of the
narrowband market (covering wholesale calls) in 2012/13. Where we are found to have SMP Ofcom will
carry out consultations on setting controls that could reduce or change the prices we charge for these
products.
See the Ofcom website at www.ofcom.org.uk for further details on regulation.
SMP Charge Controls
As a result of SMP designations, the charges we can make for a number of wholesale services are subject
to charge controls. Details of charge controls are provided in the Market Financial Reviews at Section
7.2.2 and Section 8.2.2.
Section 1 - Introduction to the Current Cost Financial Statements
BT’s Undertakings
In response to Ofcom’s 2005 strategic review of telecommunications, we put forward some legally
binding undertakings under the Enterprise Act 2002. These Undertakings (which included creating
Openreach) came into force in September 2005. They set out to give clarity and certainty to the UK
telecommunications industry about the way BT provides ‘upstream’ regulated products. This in turn
supports effective and fair competition in related ‘downstream’ markets. Most of the commitments in
the Undertakings have been delivered.
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 we will continue to work with Ofcom as these
plans develop.
One of the most important things BT is doing is building a fibre broadband network throughout the UK.
We are investing £2.5bn on a commercial basis to make fibre broadband available to around two-thirds
of UK premises by the end of 2014. Looking beyond this, we believe that Broadband Delivery UK
(BDUK) funds, together with funds from local government and other sources, as well as further private
investment, could see around 90% of UK premises having access to fibre broadband in approximately
the next five years. We have indicated that we would be willing to invest further funds of around £1bn
should we win a sufficient share of the public funds being made available through competitive tenders
to support fibre roll-out. We are competing for BDUK funds and have won the bid in Lancashire and are
the preferred supplier for Rutland. We are also rolling out fibre in Cornwall and the Isles of Scilly and
Northern Ireland, funded by public private partnerships.
5
Section 1 - Introduction to the Current Cost Financial Statements
Section 1.2
1.2 -- Regulatory
Regulatory Financial
Financial Reporting
Reporting Obligations
Obligations
Section
The form and content of these Current Cost Financial Statements is based on the reporting obligations
set out by Ofcom. We refer to these obligations as “the Final Statements and Notifications”, which
consists of:
• “The Regulatory Financial Reporting Obligations on BT and Kingston Communications” issued
22 July 2004
• “Changes to BT’s Regulatory Financial Reporting Framework” issued 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
• “Changes to BT and KCOM’s regulatory and financial reporting 2011/12 update” issued 17 April
2012
We are also required by Ofcom to provide additional detailed information to enable them to regulate
effectively and efficiently. This additional information is not published by either party, nor is it subject
to any independent examination.
In the Current Cost Financial Statements for 2012, we are obliged to report on the following SMP
markets:
Wholesale Access markets
•
•
•
•
•
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*
Other Wholesale markets (including technical areas)
• Call origination on fixed public narrowband networks*
6
•
•
•
•
•
•
•
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)*
The markets marked with * in the list above have both cost accounting and accounting separation
requirements. For these markets, we report within these Current Cost Financial Statements details of
costs and charges for individual services within each market. The remaining markets have accounting
separation requirements only.
Openreach
We are also required by the Undertakings (section 5.31) 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. We have included this information in Section 10.
Section 1 - Introduction to the Current Cost Financial Statements
Section 1.3
1.3 -- Regulatory
Regulatory Financial
Financial Overview
Overview (Annex 4)
Section
Section 1.4
1.4 -- Regulatory
Regulatory Financial
Financial Review
Review (Annex
Section
(Annex 4)
4)
This section provides an overview summarising this year’s underlying returns on Mean Capital Employed
(MCE) derived from the Current Cost Financial Statements. We are required to revalue our assets each
year under the Financial Capital Maintenance (FCM) concept of Current Cost Accounting (CCA). In
2011/12 the CCA valuation of assets resulted in a net increase in the operating costs in SMP Markets
and Technical Areas of £242m, compared to £1,200m in 2010/11 (see Section 4.1). A significant
change in the CCA valuation significantly impacts the published returns on MCE making it difficult to
compare returns year on year on a consistent basis.
To help a user of the Current Cost Financial Statements understand the changes in products and services
in each market, we are required to prepare “regulatory financial reviews”. These are included in Section
7 and 8 at the grouped market level, as defined by Ofcom, and at the individual SMP market level to
explain:
To allow comparison year to year on a more consistent basis we show the key overall results below
excluding all CCA holding gain/losses (duct, copper, etc.) and other adjustments while including
supplementary depreciation. The reason for making these changes is to put underlying returns for
2010/11 and 2011/12 on a comparable basis. The numbers below, which exclude all CCA holding gain/
losses and other adjustments but continue to include supplementary depreciation, are not published
elsewhere in these Statements.
• Overall Access market returns on MCE have remained flat at 11% excluding all CCA holding gain/
losses and other adjustments. This compares to an increase from 6% to 11% including these
items (see Section 7.1).
• Overall Other Wholesale market returns on MCE have increased from 14% in 2010/11 to 20% in
2011/12 excluding all CCA holding gain/losses and other adjustments. This is driven by lower
depreciation costs for ageing assets in these markets. This compares to an increase from 5% to
20% including CCA holding gains/losses and other adjustments (see Section 8.1).
7
• The main factors and influences that underlie each market or groups of markets.
• New products and services.
Section 2 - Statement of Responsibility
Section 2 - Statement of Responsibility
Section 2
Statement of Responsibility
8
Section 2 - Statement of Responsibility
Section
of Responsibility
Responsibility (Annex
(Annex 2)
2)
Section 2.1
2.1 -- Statement
Statement of
The Undertakings require us to report the financial results of Openreach, including the following:
British Telecommunications plc (the “Company”) is required to prepare Current Cost Financial
Statements in accordance with the Final Statements and Notifications as described in Section 1.2.
Under the Financial Capital Maintenance (FCM) concept of Current Cost Accounting we have revalued
our assets in 2012. The approach taken in the Current Cost Financial Statements is described in Section
4.1.
The Current Cost Financial Statements include comparative information for the year ended 31 March
2011 first published on 15 September 2011 subject to certain restatements and re-presentations
detailed in Section 4.1.
We have prepared the Current Cost Financial Statements in accordance with the Primary Accounting
Documents and Secondary Accounting Documents (these are the Detailed Attribution Methods; the
Detailed Valuation Methodology; the Long Run Incremental Cost Model: Relationships and Parameters
and the Wholesale Catalogue). If there are any inconsistencies in the Primary and Secondary Accounting
Documents, 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.
We reconcile the Current Cost Financial Statements to BT Group plc’s Annual Report and we explain any
differences.
We confirm that the Current Cost Financial Statements for the year ended 31 March 2012 have been
prepared in accordance with the requirements of the Final Statements and Notifications and the
Primary and Secondary Accounting Documents dated 31 July 2012.
We confirm that the Current Cost Financial Statements for the year ended 31 March 2011 have been
prepared in accordance with the requirements of the Final Statements and Notifications and the
Primary and Secondary Accounting Documents dated 15 September 2011 subject to certain
restatements and re-presentations as detailed in Section 4.1.
We confirm that the Detailed Attribution Methods, the Detailed Valuation Methodology, the Long Run
Incremental Cost Model: Relationships and Parameters and the Wholesale Catalogue all dated 31 July
2012 are appropriate to implement the principles contained in the Primary Accounting Documents
dated 31 July 2012, including the Transparency Principle.
Openreach
We are also required in accordance with the Undertakings to separately report the financial results of
Openreach within our Current Cost Financial Statements as explained in Sections 1.1 and 1.2. The
Undertakings are attached to Annex A of Part 2 of Ofcom’s “Final Statements on the Strategic Review
of Telecommunications, and undertakings in lieu of a reference under the Enterprise Act 2002”, issued
on 22 September 2005.
9
• 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 revenues, separately identified payments to other parts of the Company 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 us and Ofcom) with information about Openreach shown in BT Group plc’s
Annual Report.
The Openreach Financial Statements can be found in Section 10 and include comparative information
for the year ended 31 March 2011.
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 as described above, except where differences
are agreed with Ofcom.
We confirm that the Openreach Financial Statements for the year ended 31 March 2012, which have
been prepared in accordance with the Primary Accounting Documents dated 31 July 2012, comply with
the requirements of the Undertakings dated 22 September 2005.
Warren Clements
Group Controller
31 July 2012
Section 3 - Audit Report
Section 3 - Audit Report
Section 3
Audit Report
10
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 2012 (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
Statements and Notifications entitled “Changes to BT’s regulatory financial reporting
framework” issued by Ofcom on 31 August 2005, “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, “Changes to BT and KCOM’s regulatory financial
reporting 2010/11 update” issued by Ofcom on 2 June 2011 and “Changes to BT and KCOM’s
regulatory financial reporting 2011/12 update” issued by Ofcom on 17 April 2012 (together
the “Final Statements and Notifications”);
• the Primary Accounting Documents;
• the Secondary Accounting Documents, namely the Detailed Attribution Methods; and
• the Detailed Valuation Methodology and the Wholesale Catalogue.
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 Statements and Notifications entitled “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,
“Changes to BT and KCOM’s regulatory financial reporting 2010/11 update” issued by Ofcom on
2 June 2011 and “Changes to BT and KCOM’s regulatory financial reporting 2011/12 update”
issued by Ofcom on 17 April 2012 (together the “Openreach Final Statement and
Notifications”); and
• the Primary Accounting Documents.
4. The Market Financial Statements comprise the following statements for the year ended 31 March
2012 for the Markets and Technical Areas listed on page 6:
11
• The Consolidated Performance Summary on page 20;
• The Statements of Attribution of Wholesale Current Costs and Mean Capital Employed on pages
22, 24; 25 and 27;
• The Statement of Financial Performance in Access Markets on page 29;
• The Market Summary statements for Access Markets on pages 36 to 56;
• The Statement of Financial Performance in Other Wholesale Markets on pages 58;
• The Market Summary Statements for Other Wholesale Markets on pages 65 to 80; and
• the related notes set out in Sections 4, 7, 8 and 9 on pages 15 to 18, 30 to 35, 59 to 64 and 82
to 84, and Appendix 1 on pages 95 to 120 other than the LRIC Floors and LRIC ceilings.
5. The Openreach Information comprises the following information for the year ended 31 March
2012 on pages 86 to 91:
• 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 2011 first published on 15 September 2011 which have
been restated and re-presented as described in “Comparability of current and prior year results”
on page 16. All comparative information for the year ended 31 March 2011 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 15 September 2011 as
amended, where applicable, in accordance with “Comparability of current and prior year results”
on page 16.
Management’s responsibility for the Financial Statements
7. As described on page 9 Management is responsible for preparing and approving the Financial
Statements.
Auditor’s Responsibility
8. 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.
9. Our responsibility is to examine 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
Section 3 - Audit Report
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.
10. We report our opinions as to whether:
• the Market Financial Statements as a whole;
• each of the market group statements comprising the statement of financial performance in
Access Markets on page 29 and the statement of financial performance in Other Wholesale
Markets on page 58 (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 36;
o
Wholesale business ISDN30 exchange line services on page 40;
o
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
on page 41;
o
Alternative interface symmetric broadband origination on page 51;
o
Wholesale local access on page 55;
o
Call Origination on fixed public narrowband networks on page 65; and
o
Fixed call termination on page 70
• the Openreach Information on pages 86 to 93.
Documents have not been properly applied in the preparation of the Market Summary Statements
for the PPIA Markets.
12. We report our opinions as to whether the restated Market Financial Statements as a whole for the
year ended 31 March 2011 are fairly presented in accordance with the Primary Accounting
Documents dated 15 September 2011 subject to the changes described in “Comparability of
current and prior year results” on page 16, and comply with the requirements of the Final
Statements and Notifications.
13. 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.
14. We read the financial and non-financial information presented with the Financial Statements to
identify material inconsistencies with the Financial Statements. If we become aware of any
apparent material misstatements or inconsistencies we consider the implications for our report.
The other information comprises the Regulatory Financial Review on page 7, the Access Markets
Review on pages 30 to 35, the Review of Other Wholesale Markets on pages 59 to 64, the Price
Control Statements on page 122, the Openreach Notes on pages 92 and 93 and the Glossary and
Footnote List and Additional Information on pages 124 to 129.
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.
11. We also report our opinion as to whether each of the Market Summary Statements for the selected
markets listed below (the “PPIA Markets”)
o
Traditional interface symmetric broadband origination (above 8Mbit/s up to and inc.
45Mbit/s) on page 47;
o
Traditional interface symmetric broadband origination (above 45Mbit/s up to and inc.
155Mbit/s) on page 49;
o
Technical areas (interconnect circuits) on page 68;
o
Wholesale trunk segments on page 71;
o
Wholesale broadband access market 1 on page 75 and
o
Wholesale broadband access market 2 on page 78.
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
12
Basis for opinions
15. As explained in "Basis of Preparation" on pages 15 to 18, 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 2012 and 31 March 2011 ("the Statutory Financial
Statements").
16. PricewaterhouseCoopers LLP audited the Statutory Financial Statements on which they expressed
unqualified audit opinions. Their audit report on the Statutory Financial Statements describes the
scope of their audit of those Statutory Financial Statements.
17. In conducting our subsequent examination of the Financial Statements, and in providing the
opinions in paragraph 20 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.
18. Having regard to the above:
(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;
Section 3 - Audit Report
(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
whole, each of the Market Group Statements, the Market Summary Statements for the 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 the Market Summary Statements for the
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.
19. 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 13 and 14 of the Primary
Accounting Documents.
[d] the Market Summary Statements for each of the PPIA Markets for the year ended 31 March
2012 have been properly prepared in accordance with the procedures, if any, defined in the
Primary and Secondary Accounting Documents all dated 31 July 2012 and complies with the
requirements of the Final Statements and Notifications;
[e] the restated Market Financial Statements as a whole for the year ended 31 March 2011 are
fairly presented in accordance with the Primary Accounting Documents dated 15 September
2011, 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 16;
[f] the Openreach Information for the year ended 31 March 2012, which has been prepared in accordance with the Primary Accounting Documents dated 31 July 2012, fairly presents in accordance with the Primary Accounting Documents dated 31 July 2012 the results, mean capital
employed and costs incurred by the Company and complies with the requirements of the Undertakings and the Openreach Final Statement and Notifications; and
[g] In the context of (a) and (b) and (c) above, the Secondary Accounting Documents all dated 31
July 2012 are appropriate to implement the principles contained in the Primary Accounting
Documents dated 31 July 2012.
Emphasis of matter – valuation of access network assets
21. In forming our opinions on the Financial Statements, which are not modified, we have considered
the adequacy of the disclosures made by the Company in “Access Network Valuation” on page 16
of the Financial Statements concerning the nature of data used in the preparation by the Company
of current cost valuations of assets in the access network. The potential impact on the Financial
Statements of any change in the valuation of these assets as a result of changes to source data
cannot be accurately determined.
Opinions
20. In our opinion:
[a] the Market Financial Statements as a whole for the year ended 31 March 2012, which have
been prepared in accordance with the Primary Accounting Documents dated 31 July 2012,
fairly present in accordance with the Primary Accounting Documents dated 31 July 2012 the
results, mean capital employed and costs incurred by the Group and comply with the requirements of the Final Statements and Notifications;
[b] each of the Market Group Statements for the year ended 31 March 2012, fairly presents in accordance with the Primary Accounting Documents dated 31 July 2012 the results, mean capital
employed and costs incurred by the Market Group and complies with the requirements of the
Final Statements and Notifications;
[c] the Market Summary Statements for the each of the FPIA Markets for the year ended 31 March
2012, fairly presents in accordance with the Primary Accounting Documents dated 31 July
2012 the results, mean capital employed and costs incurred by each of the markets and complies with the requirements of the Final Statements and Notifications;
13
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London, 31 July 2012
Section 4 - Basis of Preparation
Section 4 - Basis of Preparation
Section 4
Basis of Preparation
14
Section 4 - Basis of Preparation
Section 4.1
4.1 -- Introduction
Introduction to
to the
the Basis
Basis of
of Preparation
Preparation
Section
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.
BT Group plc’s Annual Report dated 9 May 2012 details the basis of preparation and explains the
accounting policies adopted by the Group. BT’s Annual Report for 2012, 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 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.
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:
• Regulatory Accounting Principles - the principles we apply or use in the preparation of the
Current Cost Financial Statements, for example, that all costs should be fully allocated.
• Attribution Methods - a high level summary of the practices we use to attribute revenue
(including appropriate Transfer Charges), costs (including appropriate Transfer Charges), assets
and liabilities to activities or, where 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 - the approach used by our system 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 - the way we apply the requirements of the Companies Act 2006, Article 4
of the International Accounting Standards (IAS) Regulation, and our accounting policies,
whenever not superseded by the Regulatory Accounting Principles, 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 - the long run incremental cost principles,
procedures and processes which form the framework we use to decide what the long run
incremental costs are. This document sets out the principles followed to derive the long run
incremental network costs.
Where 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 Secondary Accounting Documents consists of the Detailed Attribution Methods (DAM), the
Detailed Valuation Methodology (DVM), the Long Run Incremental Costs Model: Relationships and
Parameters (R&P) and the Wholesale Catalogue. These documents contain 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.
15
The economic Markets defined by Ofcom’s Final Statements and Notifications do not correspond to
how 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.
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. This system uses apportionment bases that reflect, as far as possible, the causality
of the revenue, cost, asset or liability.
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, that are employed in the
production of these Current Cost Financial Statements, we have had to make certain estimates and
exercise our judgement. We do this with regard to the regulatory accounting principles, including cost
causality and objectivity, in order to comply with the requirements of the Primary Accounting
Documents.
However, in some cases, when preparing financial statements at a very granular level a directly cost
causal and objective method of apportionment cannot be determined or implemented and the
Company adopts the most appropriate basis practically available.
We seek 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. We review and update 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 require significant detail in the Current Cost Financial
Statements. When preparing financial statements at such a granular level it is not always possible to
develop a directly cost causal and objective method of cost apportionment and so these Financial
Statements have been prepared on the basis of the methodologies we consider to be the most
appropriate.
In respect of the very small wholesale services within certain wholesale markets, we are aware that, in
following the generic methodologies for attribution of common costs set out in the DAM, anomalies
may exist in the year on year cost trends in some services. Costing methodologies and non-financial
data sources are kept under review and, where appropriate, improvements are made.
Our costing systems used in the preparation of the Current Cost Financial Statements to attribute
revenues, costs, assets and liabilities to SMP Markets use the general ledgers of the Group as their
starting point. These ledgers are maintained to the nearest penny and this level of detail is maintained
throughout the costing process. However, for consistency 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
Access Network Valuation
The valuation of access network duct assets requires data in respect of the type and length of duct as
well as the information regarding the type of surface under which the duct is situated. The average
surface mix used in the valuation has previously been based on information from management
information systems and site surveys carried out in 1997. A new management system (PIPeR - Physical
Inventory for Planning and eRecords) has been implemented which now provides the majority of the
data supporting the duct valuation. Accordingly, the surface mix used in the valuation of duct assets at
31 March 2012 has been based on reports drawn from the PIPeR system overlaid by Ordnance Survey
data. This new systematic basis of estimating surface mix, which is reliant on the precision of both the
PIPeR and Ordnance Survey records, requires further sampling and verification to ensure its reliability.
The exercise will commence in the 2012/13 financial year. Until this additional sampling and
verification is complete there remains uncertainty over the accuracy of this surface mix data.
Areas (Interconnect Circuits) Market was considered significant, prior year comparatives have been
restated to reflect the updated cost attribution. The change has an immaterial impact on the TISBO (up
to and including 8Mbit/s) Market and therefore comparatives for this market have not been restated
with the difference being reflected in Wholesale Residual.
There were no other restatements or re-presentations.
Current Cost Accounting (CCA) adjustments
(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.
We summarise below the treatment of 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.
• A supplementary depreciation adjustment on fixed assets arising from differences between
historic cost accounting (HCA) and 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.
• 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
prepared. 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.
Management believes that despite the uncertainty the revised systematic methodology for the
determination of surface mix is an improvement on the previous methodology and is the most
appropriate approach to the valuation of the duct assets based upon the currently available
information.
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 28 day period (2010/11: 33 days) as other operators.
The Network Activity Statements show component unit costs on a 24-hour basis. Charges to Retail
Residual and other CPs for call conveyance services vary by the time of day at 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:
• Improved disclosure of services in the Alternative interface symmetric broadband origination
(AISBO) Market.
(b) The average debtor days have reduced from 33 days (for 2010/11) to 28 days (for 2011/12) due to
improved billing and collection procedures.
(c) The prior year comparatives have also been restated for the Technical Areas (Interconnect Circuits)
Market to reflect an update in the allocation of costs.
During 2011/12 we reviewed the attribution of costs in the Technical Areas (Interconnect Circuits)
Market. This resulted in a change in the attribution methodology which resulted in £6m of costs moving
from the Technical Areas (Interconnect Circuits) Market to the Traditional interface symmetric
broadband origination (TISBO) (up to and including 8Mbit/s) Market. As the impact on the Technical
16
(b) The CCA valuation of assets is affected by external factors such as changes in market prices and
changes to our CCA policies and practices. For the year ended 31 March 2012, this resulted in a net
increase in the operating costs in SMP Markets and Technical Areas in these Financial Statements of
approximately £242m, which is mainly attributed to:
• The valuation of the duct assets having decreased due to a change in the surface type reporting.
• The valuation of the copper access network assets having increased following the use of
updated engineering job time estimates offset by decreases to copper prices.
• The valuation of 21 Century Network assets having decreased due to a combination of combicards being valued as broadband cards and a reduction in technology costs.
Regulatory Valuation of Copper-Based Local Access Network Assets
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 we use to produce the Current Cost Financial Statements.
Section 4 - Basis of Preparation
• Wholesale broadband access market 1; and
• Wholesale broadband access market 2.
As agreed with Ofcom, the Ofcom methodologies have not been implemented in the Current Cost
Financial Statements for 2012 and therefore the value of copper assets has not been adjusted to
Ofcom’s assessed Regulatory Asset Valuation.
Requirement for independent assurance
The Current Cost Financial Statements are required to have an independent audit, including separate
opinions in respect of the Market Summary Statements for certain individual economic markets. These
audit opinions are in the form “fairly presents in accordance with the Primary Accounting Documents”
(FPIA) or “properly prepared in accordance with the procedures, if any, defined in the Primary and
Secondary Accounting Documents” (PPIA) as determined annually by Ofcom.
As explained above, when preparing financial statements at a very granular level, in some cases, a
directly cost causal and objective method of apportionment cannot be determined or implemented. In
this regard, where the total costs, revenues, asset or liabilities of a market are very small in the context
of BT as a whole the evidence available to our independent auditors, PricewaterhouseCoopers LLP, is
insufficient to provide them with reasonable assurance that the Market Summary Statements for a small
market are fairly presented in accordance with the principles set out on pages 13 to 14 of the Primary
Accounting Documents. Consequently, as agreed with Ofcom, the audit requirement in respect of such
markets may be modified from that originally requested by Ofcom.
Between 2010/11 and 2011/12 total costs and revenues in the 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), and Wholesale trunk
segments markets have declined such that the audit requirement in these markets has been amended
to PPIA.
Following these amendments to Ofcom’s original requirements the audit requirements in respect of
individual Market Summary Statements for the year ended 31 March 2012 are:
FPIA
•
•
•
•
•
•
•
Wholesale analogue exchange line services;
Wholesale business ISDN30 exchange line services;
Traditional interface symmetric broadband origination (up to and including 8Mbit/s);
Alternative interface symmetric broadband origination;
Wholesale local access;
Call Origination on fixed public narrowband networks; and
Fixed call termination.
PPIA
• 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);
• Technical areas (interconnect circuits);
• Wholesale trunk segments;
17
Section 4 - Basis of Preparation
Section 4.2
4.2 –- Other
Section
Other Aspects
Aspects to
to the
the Basis
Basis of
of Preparation
Preparation (Annex
(Annex 22)
22)
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 2011/12 update” issued 17 April 2012 that impact the Current Cost
Financial Statements for the year ended 31 March 2012.
Improved disclosure of services in the AISBO Market
• Ethernet Access Direct rentals and connections have been disclosed separately by bandwidth.
• Wholesale Extension Service connections have been amalgamated.
The prior year has not been re-presented for either change in disclosure.
18
Section 5 - Summary of Financial Performance
Section 5 - Summary of Financial Performance
Section 5
Summary of Financial Performance
19
Section 5 - Summary of Financial Performance
Section 5.1 - Consolidated Performance Summary (Annex 3)
For the year ended 31 March 2012
Markets
Access Markets
Other Wholesale Markets
Residual Activities
Wholesale residual activities
Retail residual activities
Roundings
Total Markets & Activities
For the year ended 31 March 2011 (h)
Markets
Access Markets
Other Wholesale Markets (h)
Residual Activities
Wholesale residual activities (h)
Retail residual activities
Roundings
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
4,687
1,140
5,827
3,324
848
4,172
1,363
292
1,655
11,940
1,485
13,425
11.4 %
19.7 %
12.3 %
2,773
15,252
18,025
2,525
14,277
16,802
248
975
1,223
1,869
392
2,261
13.3 %
248.7 %
54.1 %
23,852
Revenue
£m
-
-
20,974
CCA
operating
costs
£m
2,878
CCA return
before
taxation
£m
15,686
MCE
£m
n/a
18.3 %
Return
on MCE
%
Supporting
information
Section 7
Section 8
4,703
1,136
5,839
3,947
1,045
4,992
756
91
847
12,439
1,755
14,194
6.1 %
5.2 %
6.0 %
3,083
16,264
19,347
3,195
15,675
18,870
(112)
589
477
1,875
1,819
3,694
(6.0)%
32.4 %
12.9 %
25,186
(1)
1
23,861
1,325
(h) See Section 4 - Basis of Preparation for explanation of restatement.
20
17,888
n/a
7.4 %
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6
Attribution of Wholesale Current Costs and Mean Capital Employed
21
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6.1 - Attribution of Wholesale Current Costs 2012 (Annex 5A)
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
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 broadband
access - Market 1
Wholesale broadband
access - Market 2
Total Other Wholesale &
SMP Markets
Wholesale Residual
Total Markets
Total CCA Operating Costs
TISBO (up to and including
8Mbit/s)
CCA Adjustments:
Holding Loss/(Gain)
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
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 2012
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
0
165
123
173
244
13
128
0
10
15
433
39
76
563
0
6
4
8
11
1
11
0
0
2
14
4
4
24
0
9
6
15
23
1
20
0
1
2
12
19
8
41
0
31
22
43
60
4
70
0
4
9
38
70
26
143
0
1
1
3
4
0
4
0
0
1
3
9
2
15
0
1
1
2
3
0
4
0
0
1
2
10
2
15
0
12
32
57
113
4
21
0
7
2
67
58
88
215
0
97
46
81
95
5
70
0
4
21
114
8
61
204
0
322
235
382
553
28
328
0
26
53
683
217
267
1,220
0
9
3
15
26
2
47
0
1
7
2
24
9
42
0
0
0
0
0
0
1
0
0
0
0
2
0
2
0
2
1
3
5
2
6
0
0
1
1
5
3
10
0
7
3
10
13
0
47
0
2
6
2
25
8
41
0
2
1
2
4
0
5
0
1
1
2
15
2
20
0
1
1
1
1
0
1
0
0
0
1
2
1
4
0
21
9
31
49
4
107
0
4
15
8
73
23
119
143
12
3
13
27
2
32
0
2
8
18
48
31
105
84
5
1
7
14
1
15
0
1
3
6
24
17
50
227
38
13
51
90
7
154
0
7
26
32
145
71
274
(227)
278
54
159
363
21
157
0
1,121
23
75
210
266
574
0
638
302
592
1,006
56
639
0
1,154
102
790
572
604
2,068
1,419
65
116
377
28
26
461
602
3,094
145
3
29
123
35
9
344
339
178
861
2,500
6,455
(12)
(4)
26
-
(1)
(1)
4
-
0
(2)
1
-
(23)
(4)
96
-
8
51
(33)
-
0
0
0
-
(1)
0
0
-
(3)
0
(5)
-
0
0
2
-
(10)
(2)
(1)
-
387
30
25
530
628
3
28
27
11
331
26
191
(110)
1,526
1
5
(2)
69
(3)
(1)
17
129
(4)
235
(1)
3,324
22
(3)
(1)
1
142
(3)
(1)
1
120
(1)
(9)
9
338
0
(5)
6
179
(11)
(16)
14
848
4
(25)
46
2,525
(11)
194
59
6,697
Section 6 - Attribution of Wholesale Current Costs 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 2012. Further details of these sectors can be found in the Detailed Attribution
Methods (DAM) 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.
Depreciation
Depreciation is analysed between land and buildings, access, switch and transmission and other
(including network power, computers and software). The key drivers are 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
Provision/Maintenance includes costs of network provision, installation and maintenance. The most
material cost relates to D-side copper which is apportioned 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 activity surveys.
General Management
General Management includes operator services, costs of general management activities and other
general expenses. The key drivers are 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 activity surveys and pay costs.
Accommodation
The Accommodation sector includes exchange and office building costs. Accommodation costs are
mainly apportioned based on the use of floor space and utilities.
Bad Debts
Bad debts include costs associated with writing off amounts that cannot be collected from customers.
The key driver is revenue.
23
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6.2 - Attribution of Wholesale Current Costs 2011 (Annex 5A)
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
Call origination on fixed
public narrowband
networks
Single transit on fixed
public narrowband
networks
Technical areas
(Interconnect Circuits)(h)
Fixed call termination
Wholesale trunk segments
Technical areas (Point of
Handover)
Sub-total Other Wholesale
& SMP National Markets (h)
Wholesale broadband
access - Market 1
Wholesale broadband
access - Market 2
Total Other Wholesale &
SMP Markets (h)
Wholesale Residual(h)
Total Markets
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
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
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
0
157
135
195
303
13
144
0
(50)
16
450
49
76
591
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
3
2
2
6
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
23
18
23
53
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
42
22
40
99
7
174
0
5
24
43
174
100
341
(174)
236
51
118
366
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
33
146
49
14
409
324
171
904
2,998
6,969
(2)
5
14
-
1
0
17
-
1
(2)
8
-
1
(2)
5
-
19
5
84
-
(15)
41
70
-
4
0
19
-
0
0
0
-
1
0
2
-
4
(1)
9
-
0
(1)
2
-
85
134
44
39
496
570
186
4
36
61
15
1,488
(62)
212
415
2,053
10
(2)
57
526
(47)
257
670
3,947
(h) See Section 4 - Basis of Preparation for explanation of restatement.
24
5
(1)
21
171
14
(3)
53
473
5
(6)
48
371
3
(3)
30
201
22
(12)
131
1,045
15
(15)
197
3,195
(10)
230
998
8,187
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6.3 - Attribution of Wholesale Current Cost Mean Capital Employed 2012 (Annex 6A)
Investments
Total Non-current Assets
TISBO (above 45Mbit/s up
to and including
155Mbit/s)
AISBO (up to and
including 1Gbit/s)
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 broadband
access - Market 1
Wholesale broadband
access - Market 2
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
19
12
71
55
10
47
26
103
16
187
314
0
219
98
6
0
17
21
0
25
7
8
0
6
20
0
28
8
21
0
424
450
0
252
264
223
877
0
757
18
39
247
523
4,291
705
4,687
166
772
963
68
0
0
98
60
61
42
1
0
0
0
3
5
1
11
0
2
16
6
12
9
68
0
0
105
61
63
38
12
0
0
90
0
50
8
1
0
9
4
0
4
2
161
0
11
313
130
195
100
77
28
0
77
0
152
94
35
9
0
27
0
78
48
273
37
11
417
130
425
242
238
184
263
325
91
637
715
1,034
4,512
979
5,429
387
1,834
1,920
Total Markets
TISBO (above 8Mbit/s up
to and including 45Mbit/s)
£m
16
100
0
91
18
6
15
Wholesale Residual
TISBO (up to and
including 8Mbit/s)
£m
Total Other Wholesale &
SMP Markets
Wholesale business
ISDN30 exchange line
services
£m
127
3,286
0
2,979
120
156
298
Wholesale local access
Wholesale ISDN2
exchange line services
Non-current Assets
Land & Buildings
Access - Copper
Access - Fibre
Access - Duct
Switch
Transmission
Other
Wholesale analogue
exchange line services
For the year ended 31 March 2012
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
6,966
246
240
937
76
70
1,411
2,161
12,107
329
10
56
335
160
20
910
428
197
1,535
2,453
16,095
Current Assets
Inventories
Receivables
- Internal
- External
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
34
34
163
410
10
20
23
64
43
75
3
5
4
10
56
78
58
107
360
769
14
23
0
1
4
8
11
15
7
16
0
1
36
64
32
61
19
40
87
165
(69)
767
378
1,701
Total Current Assets
573
30
87
118
8
14
134
165
1,129
37
1
12
26
23
1
100
93
59
252
732
2,113
0
(512)
(512)
0
(25)
(25)
0
(78)
(78)
0
(124)
(124)
0
(8)
(8)
0
(11)
(11)
0
(166)
(166)
0
(173)
(173)
0
(1,097)
(1,097)
0
(39)
(39)
0
(1)
(1)
0
(11)
(11)
0
(28)
(28)
0
(18)
(18)
0
(2)
(2)
0
(99)
(99)
(11)
(79)
(90)
(7)
(48)
(55)
(18)
(226)
(244)
18
(1,062)
(1,044)
0
(2,385)
(2,385)
61
5
9
0
3
(32)
(8)
32
(2)
0
1
(2)
5
(1)
1
3
4
8
(312)
(272)
7,027
251
249
931
76
73
1,379
2,153
12,139
327
10
57
333
165
19
911
431
201
1,543
2,141
15,823
(26)
(1)
(1)
(22)
(45)
(199)
(17)
0
(3)
(16)
(1)
(1)
(38)
(14)
(6)
(58)
(272)
(529)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
310
10
54
317
164
18
873
417
195
Payables falling due within one year
- Internal
- External
Total payables falling due within one year
Net Current Assets/(Payables)
Total Assets less Current Payables
Provisions for liabilities & charges
Roundings
Mean Capital Employed
(89)
6,938
(6)
(6)
(9)
-
-
-
-
-
245
240
905
75
72
1,357
2,108
11,940
25
1,485
1,869
15,294
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6.3.1 - Notes on Wholesale MCE sector costs
Section 6.3.1 - Notes on Wholesale MCE sector costs
Other
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 a range of assets used by BT businesses including categories
such as Software, Motor Transport and 21CN. The key drivers are 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
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.
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 office and network
buildings owned by BT. Asset values are mainly apportioned based on the use of floor space and
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). The key
driver is direct mapping of Class of Work (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 driver is the 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 driver is a duct occupancy model that allocates CoW to network
cable 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 engineering models that allocate CoW to network component and then
onto the appropriate service based on usage factors and actual service volumes.
Transmission
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
engineering inventories and models that allocate CoW to network components and then onto the
appropriate service based on usage factors and actual service volumes.
26
Working Capital
Section 6 - Attribution of Wholesale Current Costs and Mean Capital Employed
Section 6.4 - Attribution of Wholesale Current Cost Mean Capital Employed 2011 (Annex 6A)
Investments
Total Non-current Assets
TISBO (above 45Mbit/s up
to and including
155Mbit/s)
AISBO (up to and
including 1Gbit/s)
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 broadband
access - Market 1
Wholesale broadband
access - Market 2
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
16
11
81
68
12
53
26
95
25
217
387
0
266
114
7
0
21
29
0
33
10
8
0
7
27
0
37
11
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
9
0
3
19
8
15
9
65
0
0
128
79
76
51
12
0
0
118
0
66
11
1
0
12
6
0
8
3
150
0
15
389
163
241
135
70
40
0
62
0
171
128
25
13
0
23
0
95
58
245
53
15
474
163
507
321
232
158
222
344
103
644
751
910
4,672
916
5,861
460
2,036
1,951
Total Markets
TISBO (above 8Mbit/s up
to and including 45Mbit/s)
£m
15
102
(1)
98
21
7
18
Wholesale Residual
TISBO (up to and
including 8Mbit/s)
£m
Total Other Wholesale &
SMP Markets
Wholesale business
ISDN30 exchange line
services
£m
118
3,610
(20)
3,395
144
189
309
Wholesale local access
Wholesale ISDN2
exchange line services
Non-current Assets
Land & Buildings
Access - Copper
Access - Fibre
Access - Duct
Switch
Transmission
Other
Wholesale analogue
exchange line services
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
63
399
207
30
1,093
471
214
1,778
2,454
16,806
Current Assets
Inventories
Receivables
- Internal
- External
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
33
206
350
12
17
29
69
61
109
4
4
6
20
50
42
58
28
426
639
17
21
0
1
5
12
15
15
10
24
1
1
48
74
33
71
22
54
103
199
(68)
539
461
1,377
Total Current Assets
556
29
98
170
8
26
92
86
1,065
38
1
17
30
34
2
122
104
76
302
504
1,871
Payables falling due within one year
- Internal
- External
Total payables falling due within one year
0
(513)
(513)
0
(24)
(24)
0
(83)
(83)
0
(166)
(166)
0
(9)
(9)
0
(22)
(22)
0
(118)
(118)
0
(100)
(100)
0
(1,035)
(1,035)
0
(41)
(41)
0
(2)
(2)
0
(14)
(14)
0
(32)
(32)
0
(27)
(27)
0
(3)
(3)
0
(119)
(119)
0
(90)
(90)
0
(61)
(61)
0
(270)
(270)
0
(890)
(890)
0
(2,195)
(2,195)
43
5
15
4
(1)
4
(26)
(14)
30
(3)
(1)
3
(2)
7
(1)
3
14
15
32
(386)
(324)
7,788
265
282
1,108
99
94
1,313
1,655
12,604
379
11
66
397
1,096
485
229
1,810
2,068
16,482
(39)
(2)
(2)
(12)
(22)
(165)
(18)
0
(4)
(17)
(42)
(9)
(4)
(55)
(193)
(413)
-
-
-
-
-
-
-
-
-
-
-
-
-
97
92
361
11
62
476
225
Net Current Assets/(Payables)
Total Assets less Current Payables
Provisions for liabilities & charges
Roundings
Mean Capital Employed
(75)
7,713
(5)
(8)
-
-
260
274
1,069
1,301
1,633
12,439
27
214
29
(2)
(1)
-
-
-
380
212
28
1,054
1,755
1,875
16,069
Section 7 - Review of Access Markets
Section 7 - Review of Access Markets
Section 7
Review of Access Markets
28
Section 7 - Review of Access Markets
Section 7.1 - Financial Performance in Access Markets (Annex 7)
For the year ended 31 March 2012
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)(g)
Wholesale local access
Total Access Markets
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
Internal
Revenue
£m
1,568
73
175
253
24
32
445
0
External
Revenue
£m
555
61
130
301
13
18
280
759
Total
Revenue
£m
2,123
134
305
554
37
50
725
759
2,570
2,117
4,687
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
HCA Costs
£m
1,419
65
116
377
28
26
461
602
3,094
HCA Costs
£m
1,488
68
116
461
37
35
388
474
3,067
Total Access Markets return on MCE excluding all CCA holding gains/losses and other adjustments are presented in Section 1.3.
29
CCA
Adjustments
£m
107
4
13
10
2
(1)
69
26
230
CCA
Adjustments
£m
565
17
18
65
7
4
108
96
880
Roundings
£m
-
Roundings
£m
-
Total CCA
Operating
Costs
£m
1,526
69
129
387
30
25
530
628
3,324
Total CCA
Operating
Costs
£m
2,053
85
134
526
44
39
496
570
3,947
Return
£m
597
65
176
167
7
25
195
131
Mean
Capital
Employed
£m
6,938
245
240
905
75
72
1,357
2,108
Return on
MCE
%
8.6 %
26.7 %
73.6 %
18.5 %
9.1 %
34.5 %
14.3 %
6.2 %
1,363
11,940
11.4 %
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 %
12,439
6.1 %
Return
£m
225
49
185
146
(2)
29
58
66
756
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)
In the Wholesale Line Rentals (WLR) Access markets, the reduction in WLR lines has continued,
primarily due to migrations to Metallic Path Facilities (MPF). Local Loop Unbundling (LLU) operators
have continued to migrate significant numbers of lines to MPF from WLR and Shared Metallic Path
Facilities (SMPF).
For Partial Private Circuits (PPCs), competition and customer demand for alternative technologies is
resulting in falling volumes in these markets. Price changes in these markets took place in October 2011
to enable compliance with charge controls and regulatory obligations.
The Alternative Interface Symmetric Broadband Origination (AISBO) Market has continued to show
growth, with revenue increasing by £171m year on year. Ethernet Access Direct (EAD) access products
have grown in particular, due to the increased demand from mobile operators and a general migration
from older technologies including products within the TISBO Market.
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.
30
Section 7 - Review of Access Markets
Section
7.2.2 –- Access
Section 7.2.2
Access Market
Market Level
Level Financial
Financial Review
Review (Annex
(Annex 14)
14)
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.
Market: Wholesale Analogue Exchange Line Services
Key Regulatory Changes
Definition
Wholesale Analogue Exchange Line Services are the links between an end user and the remote
concentrator unit by means of analogue technology.
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.
Key Regulatory Changes
Ofcom published its review of wholesale fixed analogue exchange lines markets on 20 December 2010.
This review found that there is a single market for wholesale analogue exchange line services and that
BT continues to have Significant Market Power (SMP).
In its WLR charge control statements in 26 October 2009 and 23 February 2010, Ofcom removed the
cost orientation obligation for the WLR Premium product, which is generally used by business
customers, and for repair service levels beyond those contained within the WLR Basic or “Core” rental
product.
The WLR Charge Control expired on 31 March 2011. In the absence of the new charge control being set
by Ofcom from 1 April 2011, Openreach provided a voluntary commitment to Ofcom regarding the
prices that it would charge for the period 1 April 2011 until 31 March 2012. These prices were agreed
and based upon the cost modelling used by Ofcom to calculate the previous charge controls and
adjusted to reflect the Competition Appeal Tribunal ruling following the appeal by Carphone
Warehouse Group of Ofcom’s 2009 Local Loop Unbundling and WLR charge controls statements.
On 7 March 2012, Ofcom published a new charge control for WLR services which will apply from 1 April
2012 to 31 March 2014.
Key Market Changes
The volume of WLR PSTN lines declined again in 2011/12 for a number of reasons:
• External CPs continue to migrate their end users from WLR to MPF.
• Churn of end users from BT Retail and BT Global Services to CPs.
There has been no change to the prevailing regulatory regime for ISDN2 in 2011/12. The existing
regime is outlined in the Wholesale Fixed Narrowband Market Review published by Ofcom in
September 2009.
Key Market Changes
ISDN2 rental and connection volumes have stopped declining for the time being, with external rental
volumes increasing by around 5%. Together with some reductions in internal volumes this has resulted
in a slight increase in overall volumes.
Market: Wholesale Business ISDN30 Exchange Line Services
Definition
Wholesale Business ISDN30 Exchange Line Services are 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 Private Branch Exchange (PBX).
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 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.
On 12 April 2012, Ofcom published its statement which implemented a charge control on ISDN30
services. The charge control applies from 11 May 2012 to 31 March 2014.
Market: Wholesale ISDN2 Exchange Line Services
Key Market Changes
Definition
ISDN30 rental volumes have declined as customers migrate to alternative cheaper technologies such as
Session Initiation Protocol (SIP) Trunking product.
Wholesale ISDN2 Exchange Line Services are the links between an end user and the remote
concentrator unit by means of ISDN2 technology.
31
Section 7 - Review of Access Markets
Market: Traditional Interface Symmetric Broadband Origination (TISBO) (up to
and including 8Mbit/s)
Definition
Basket & services
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 - Low bandwidth connection
and rental.
TISBO services include:
• Wholesale terminating segments (64kbit/s and 2Mbit/s PPCs).
• Radio base station (RBS) backhaul (sub 2Mbit/s and 2Mbit/s circuits 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 (2Mbit/s circuits including the Core Conveyance element).
Ofcom also views Symmetric Digital Subscriber Line (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 TISBO market across the UK. Consequently,
it has imposed regulation on all relevant circuits and technical areas that fall within these markets,
including RBS backhaul circuits.
Key Regulatory Changes
RPI-1.75%
(from 1 Oct
2010)
RPI+5% sub-cap on each charge
(excluding POH charges).
RPI-0% sub-cap on each charge
(POH charges only).
Point of Connection 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. Ofcom are reviewing the Business
Connectivity Market during 2012/13 and issued their consultation on 18 June 2012. In parallel to this,
Ofcom are reviewing the Leased Lines Charge Control and their consultation was issued on 5 July 2012.
Key Market Changes
On 8 December 2008, Ofcom published its Final Statement on the Business Connectivity Market
Review. Ofcom found BT to continue to have SMP in the low bandwidth TISBO market.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI–X charge control where X is 3.25% on low bandwidth TISBO services as
a remedy to its finding of SMP for BT. Note that there is a single overall Traditional Interface (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 (POH) 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 POH 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. Ofcom also directed new lower prices for 2Mbit/s local end rentals.
32
Within the low bandwidth market there continues to be a fall in demand for traditional TDM circuits as
customers migrate to 21CN services like Ethernet. Overall competition and customer demand for
alternative technologies is resulting in falling volumes in this market.
Price changes in the market took place in October 2011 to enable compliance with the charge control
and regulatory obligations.
Market: Traditional Interface Symmetric Broadband Origination (TISBO) (above
8Mbit/s up to and including 45Mbit/s)
Definition
TISBO services include:
• Wholesale terminating segments (Partial Private Circuits - PPCs).
• 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.
Section 7 - Review of Access Markets
• Netstream 16 Long Line (including the Core Conveyance element).
Ofcom has concluded that BT has SMP in the high bandwidth TISBO market outside the Central and East
London Area (CELA). Consequently it has imposed regulation on all relevant circuits and technical areas
that fall within this market.
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 high bandwidth TISBO market (but only outside CELA).
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI-X charge control where X is 3.25% 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.
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.
TI-High bandwidth connection and rental (outside CELA).
RPI-1.75%
(from 1 Oct
2010)
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.
Within the high bandwidth market there continues to be a fall in demand for traditional TDM as
customers migrate to 21CN services like Ethernet. Overall competition and customer demand for
alternative technologies is resulting in falling volumes in this market.
Price changes in the market took place in October 2011 to enable compliance with the charge control
and regulatory obligations.
Market: Traditional Interface Symmetric Broadband Origination (TISBO) (above
45Mbit/s up to and including 155Mbit/s)
Definition
TISBO services include:
• Wholesale terminating segments (PPCs).
• 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).
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 very high bandwidth TISBO market (but only outside
CELA).
RPI-0% sub-cap on each charge
(POH charges only).
RPI-0%
Key Market Changes
Ofcom has concluded that BT has SMP in the very high bandwidth TISBO market outside CELA.
Consequently, it has imposed regulation on all relevant circuits and technical areas that fall within these
markets, including RBS backhaul circuits.
RPI+5% sub-cap on each charge
(excluding POH charges).
Point of Connection end and
third party end equipment
charges.
Connectivity Market during 2012/13 and issued their consultation on 18 June 2012. In parallel to this,
Ofcom are reviewing the Leased Lines Charge Control and their consultation was issued on 5 July 2012.
Following a separate Consultation, Ofcom published its Statement on the Leased Lines Charge Control
on 2 July 2009, imposing a RPI-X charge control where X is 3.25% 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.
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. Ofcom are reviewing the Business
33
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.
Section 7 - Review of Access Markets
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.
Very high bandwidth connection
and rental (outside CELA).
RPI-1.75%
(from 1 Oct
2010)
Key Regulatory Changes
RPI–0% sub-cap on each charge
(POH charges only).
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.
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)
Ofcom concluded in the Business Connectivity Market Review (BCMR) 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.
RPI+5% sub-cap on each charge
(excluding POH charges).
Point of Connection end and
third party end equipment
charges.
•
•
•
•
•
•
WES, Wholesale End to End Ethernet Services (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 as such are also 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 SMP conditions in the BCMR published 8
December 2008. Ofcom are reviewing the Business Connectivity Market during 2012/13 and have
issued their consultation on 18 June 2012.
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. Ofcom are reviewing the Business
Connectivity Market during 2012/13 and issued their consultation on 18 June 2012. In parallel to this,
Ofcom are reviewing the Leased Lines Charge Control and their consultation was issued on 5 July 2012.
Key Market Changes
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. Ofcom are reviewing the Leased Lines Charge Control during 2012/13 and have
issued their consultation on 5 July 2012.
Key Market Changes
There was strong growth in the supply of EAD access products, while volumes of WES products
decreased overall. The main drivers of growth were mobile operators, customers’ requirements to
migrate from TDM products, and growing demand for high speed Ethernet connectivity from corporate
and CPs. Prices changes were minimal, except for a slight increase in Main Link prices.
Within the very high bandwidth market there continues to be a fall in demand for traditional TDM
circuits as customers continue migrate to 21CN services like Ethernet. Overall competition and
customer demand for alternative technologies is resulting in falling volumes in this market.
Price changes in the market took place in October 2011 to enable compliance with the charge control
and regulatory obligations.
Market: Wholesale Local Access (WLA)
Definition
Market: Alternative Interface Symmetric Broadband Origination (AISBO) (up to
and including 1Gbit/s)
Ofcom determined in December 2004 and again in October 2010 that BT has SMP in the market for
"wholesale local access in the UK excluding the Hull Area".
Definition
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 end-user premises and the facility at which those access networks connect to other
AISBO services include:
34
Section 7 - Review of Access Markets
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 fibre-based local access network).
In response to 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 LLU and Sub-Loop Unbundling
(SLU), but also introducing two new remedies known as Virtual Unbundled Local Access (VULA) and
Physical Infrastructure Access (PIA). Ofcom regard these new remedies as being important in
controlling SMP 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 directly through the purchase of duct and pole sharing from BT.
Key Regulatory Changes
The previous charge control that applied to LLU services expired on 31 March 2011. In the absence of
the new charge control being set by Ofcom from 1 April 2011, Openreach provided a voluntary
commitment to Ofcom regarding the prices that it would charge for the period 1 April 2011 until 31
March 2012. These prices were agreed and based upon the cost modelling that was used by Ofcom to
calculate the previous charge controls and adjusted to reflect the Competition Appeal Tribunal ruling,
following the appeal by Carphone Warehouse Group of Ofcom’s 2009 LLU and WLR charge controls
statements.
On 7 March 2012, Ofcom published a new charge control for LLU services which will apply from 1 April
2012 to 31 March 2014.
Key Market Changes
There has been further substantial growth in LLU over the last 12 months, primarily due to external CPs
migrating their end users from WLR and SMPF to MPF.
Most MPF and SMPF prices increased slightly on 1 April 2011. However, a significant reduction in the
price of MPF New Provides has offset most of the impact this has had on revenue.
35
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 obliigations
Wholesale analogue exchange line services
Summary
2012
2011
Internal
Revenue
£m
External
Revenue
£m
1,568
1,708
555
570
Revenue
£m
Operating
costs
£m
2,123
2,278
856
897
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
563
591
26
(62)
191
212
(110)
415
Total CCA
operating
Roundings
costs
£m
£m
-
1,526
2,053
Return
£m
MCE
£m
597
225
6,938
7,713
Detailed service analysis
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 2012
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
1,184
331
11,418,728 lines
3,191,445 lines
14,610,173
103.68
103.68
105.87
105.87
56.10
56.10
146.38
146.38
0.98
0.98
333
194
3,026,492 lines
1,762,117 lines
4,788,609
110.00
110.00
107.60
107.60
57.25
57.25
148.89
148.89
1.02
1.02
Wholesale basic analogue internal service connections
27
569,401 conns
48.22
38.95
36.67
83.87
1.24
Wholesale premium analogue internal service connections
Wholesale premium and basic analogue external service connections
15
26
317,101 conns
534,313 conns
851,414
48.22
48.22
38.95
38.95
36.67
36.67
83.87
83.87
1.24
1.24
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
Wholesale premium and basic analogue internal service transfers
Wholesale premium and basic analogue external service transfers
9
4
Roundings
-
TOTAL
(ux)
(ux)
2,123
36
Return
on
MCE
8.6 %
2.9 %
Section 7 - Review of Access Markets
Section 7.3 - Wholesale analogue exchange line services (continued)
Detailed service analysis
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 and basic analogue external service connections
18
41
330,002 conns
739,455 conns
1,069,457
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 and basic analogue internal service transfers
Wholesale premium and basic analogue external service transfers
Roundings
TOTAL
(b)
(ux)
5
4
1,521,075 transfer
1,389,783 transfer
2,910,858
2,278
See glossary for volume unit descriptors.
This service comprises a number of individual volumetrics.
37
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 obligations
Wholesale ISDN2 exchange line services
Summary
2012
2011
Internal
Revenue
£m
External
Revenue
£m
73
75
61
59
Revenue
£m
Operating
costs
£m
134
134
41
43
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
24
25
1
(2)
5
5
(2)
14
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
65
49
245
260
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
-
69
85
Detailed service analysis
Cost orientation
Non-discrimination
Volume Unit (b)
Revenue
£m
Average
price
£
For the year ended 31 March 2012
Service
Wholesale ISDN2 internal service rentals
Wholesale ISDN2 external service rentals
68
58
616,257 channels
524,051 channels
1,140,308
110.00
110.00
77.36
77.36
45.71
45.70
117.37
117.38
1.42
1.42
Wholesale ISDN2 internal service connections
Wholesale ISDN2 external service connections
6
2
48,820 channels
19,598 channels
68,418
116.49
116.49
27.00
27.00
25.01
25.00
64.79
64.78
4.31
4.31
Wholesale ISDN2 internal service transfers
Wholesale ISDN2 external service transfers
0
1
6,439 channels
103,642 channels
110,081
5.65
5.65
10.74
10.74
9.27
9.27
36.18
36.18
0.53
0.53
Roundings
TOTAL
(1)
134
38
Return
on
MCE
26.7 %
18.8 %
Section 7 - Review of Access Markets
Section 7.4 - Wholesale ISDN2 exchange line services (continued)
Detailed service analysis
Non-discrimination
Volume Unit (b)
Revenue
£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
Wholesale business ISDN2 internal service rentals
Wholesale business ISDN2 external service rentals
70
55
640,549 channels
501,191 channels
1,141,740
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 ISDN2 internal service transfers
Wholesale 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
(b)
134
See glossary for volume unit descriptors.
39
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
175
195
130
124
305
319
75
72
41
44
(3)
1
(1)
-
17
17
-
129
134
176
185
240
274
Detailed service analysis
Non-discrimination
Revenue
Average
price
Volume Unit (b)
£m
£
For the year ended 31 March 2012
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
Wholesale business ISDN30 internal service transfers
Wholesale business ISDN30 external service transfers
Roundings
TOTAL
4
3
4
3
92,095 channels
80,731 channels
172,826
40.71
40.71
125
171
125
1,216,234 channels
888,536 channels
2,104,770
141.00
141.00
1
0
1
29,181 channels
193,319 channels
222,500
4.36
4.36
171
0
-
1
1
175
130
305
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
320,233
4.36
4.36
For the year ended 31 March 2011
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
Wholesale business ISDN30 internal service transfers
Wholesale business ISDN30 external service transfers
Roundings
TOTAL
(b)
5
189
0
1
-
1
195
124
319
See glossary for volume unit descriptors.
40
Return
on
MCE
73.6 %
67.1 %
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
253
335
301
337
554
672
234
284
143
177
(12)
10
(4)
(2)
26
57
-
387
526
167
146
905
1,069
Return
on
MCE
18.5 %
13.7 %
Detailed service analysis
Non-discrim
mination
Revenue
£m
Volume Unit (b)
0
0
462 circuits
263 circuits
725
Cost orientation
Average
price per
price list
£
Proportion
included in
calculation Average price
£
FAC (see
App 1.2)
£
Unaudited
(D)LRIC
£
Unaudited
DSAC
£
576.60
576.60
1,764.86
1,764.86
1,174.02
1,174.02
4,529.24
4,529.24
0.33
0.33
Average
price/FAC
For the year ended 31 March 2012
Service
Internal Partial and Private Circuits 64kbit/s - connections
External Partial and Private Circuits 64kbit/s - connections
Partial and Private Circuits 64kbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year (ao)
Total Internal
-
22.00
Main link fixed charge per year
Enhanced maintenance fixed charge per year (ao)
Total External
Partial and Private Circuits 64kbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
7.00
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 (ao)
Total External
7
4
2.00
8.00
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 (ao)
Total Internal
22
2
8
4.00
143.43
96.50
1.00
0.11
143.44
10.48
153.92
142.71
109.49
327.09
1.08
143.43
96.50
1.00
0.11
143.44
10.48
153.92
142.71
109.49
327.09
1.08
145,325 links
47,534 links
1.99
0.03
1.00
1.00
1.99
0.03
2.02
3.13
0.69
12.17
0.64
1.99
0.03
1.00
1.00
1.99
0.03
2.02
3.13
0.69
12.17
0.64
2,162,189 km
990,950 km
4.88
0.05
1.00
1.00
4.88
0.05
4.93
3.29
0.81
12.84
1.50
4.88
0.05
1.00
1.00
4.88
0.05
4.93
3.29
0.81
12.84
1.50
540.45
56.51
596.96
429.37
313.89
1,075.74
1.39
540.45
56.51
596.96
429.37
313.89
1,075.74
1.39
1,570,182 km
4
719,628 km
32
53,924 le
540.45
96.50
32.00
540.45
96.50
7.00
7
12,462 le
41
1.00
0.59
1.00
0.59
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Detailed service analysis
Non-discrim
mination
Revenue
£m
Volume Unit (b)
8
9
3,872 circuits
4,525 circuits
8,397
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 2012
Internal Partial and Private Circuits 2Mbit/s - connections
External Partial and Private Circuits 2Mbit/s - connections
Partial and Private Circuits 2Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total internal
8.00
9.00
443.23
149.23
24.00
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
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
51,783 links
21
45,382 links
443.23
149.23
21.00
40.00
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
24
40
38.00
1.00
1.00
1,954.97
1,954.97
4,038.65
4,038.65
3,685.64
3,685.64
13,268.58
13,268.58
0.48
0.48
1.00
0.11
443.23
16.91
460.14
256.49
185.30
585.81
1.79
443.23
16.86
460.09
256.49
185.30
585.81
1.79
1.00
0.11
53.76
1.68
1.00
1.00
53.76
1.68
55.44
30.75
16.82
91.55
1.80
53.76
1.68
1.00
1.00
53.76
1.68
55.44
30.75
16.82
91.55
1.80
745.64
340.78
1,541.58
1.01
718,894 km
38
678,461 km
5.00
5
10,622 le
52.00
52
66,035 le
2.00
2
3,688 le
39.00
39
49,499 le
Weighted average local end price for CLZ/non CLZ // Nationally averaged cost
298.93
149.23
1.00
0.88
298.93
130.74
429.67
656.42
149.23
1.00
0.91
656.42
135.14
791.56
298.93
149.23
1.00
0.88
298.93
130.74
429.67
656.42
149.23
1.00
0.91
656.42
135.14
791.56
751.67
42
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Detailed service analysis
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
£
(sx)
n/a
n/a
n/a
n/a
562.17
3,283.21
2,178.17
8,381.34
0.17
(sx)
n/a
n/a
n/a
n/a
2,053.74
2,053.74
4,044.73
4,044.73
3,691.16
3,691.16
13,294.34
13,294.34
0.51
0.51
(sx)
(sx)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
700.00
3,972.00
3,624.99
12,984.38
0.18
Average
price/FAC
For the year ended 31 March 2012
Internal SDSL
8.00
External Radio Backhaul Service - sub 2Mbit/s connections
External Radio Backhaul Service - sub 2Mbit/s rentals
Internal Radio Backhaul Service - 2Mbit/s connections
External Radio Backhaul Service - 2Mbit/s connections
Internal Radio Backhaul Service - 2Mbit/s rentals
External Radio Backhaul Service - 2Mbit/s rentals
External Netstream 16 LL 2Mbit/s connections
-
1.00
Internal Excess construction charges
External Excess construction charges
4.00
Roundings
19.00
19
5.00
1
5
114.00
41
114
(ux)
122 circuits
(ux)
666 circuits
2,505 circuits
(ux)
(ux)
-
0
14.00
14
(ux)
(sx)
n/a
n/a
n/a
n/a
-
0
(ux)
(sx)
n/a
n/a
n/a
n/a
4.00
3
4
(ux)
(ux)
(sx)
(sx)
Estimated cost of £0.2m
Estimated cost of £0.3m
-
0
14.00
1
14
(un)
(un)
(un)
(un)
Estimated matched cost of £1.2m (*)
Estimated matched cost of £13.5m (*)
1.00
4
1
(un)
(un)
(un)
(un)
Estimated matched cost of £2.4m (*)
Estimated matched cost of £1m (*)
3.00
Internal Third Party Customer Infrastructure
External Third Party Customer Infrastructure
TOTAL
0
41.00
External Netstream 16 LL 2Mbit/s rentals CLZ
Equipment depreciation
-
1.00
External Netstream 16 LL 2Mbit/s rentals non CLZ
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
8
-
1.00
1
253
301
554
20 circuits
Estimated equipment depreciation of £28.3m
43
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Detailed service analysis
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 - connections
External Partial and Private Circuits 64kbit/s - connections
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
2
7
3.00
135.03
84.90
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
2,304,126 km
1,123,103 km
3.39
0.02
1.00
1.00
3.39
0.02
3.41
6.17
2.86
17.69
0.55
3.39
0.02
1.00
1.00
3.39
0.02
3.41
6.17
2.86
17.69
0.55
496.01
66.73
562.74
356.60
269.08
558.21
1.58
496.01
66.73
562.74
356.60
269.08
558.21
1.58
1,919,752 km
3
935,748 km
52
93,083 le
8
13,934 le
496.01
84.90
52.00
496.01
84.90
8.00
44
1.00
0.79
1.00
0.79
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Detailed service analysis
Non-discrim
mination
Partial and Private Circuits 2Mbit/s - connections
Internal Partial and Private Circuits 2Mbit/s - connections
External Partial and Private Circuits 2Mbit/s - connections
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
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
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
Volume Unit (b)
11
13
6,242 circuits
7,360 circuits
13,602
36
28.00
43.00
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Revenue
£m
28
43
32.00
4.00
74.00
Average
price per
price list
£
Cost orientation
Proportion
included in
calculation Average price
£
11,115 le
74
101,065 le
1.00
1
4,006 le
37.00
37
51,337 le
Weighted average local end price for CLZ/non CLZ // Nationally averaged cost
1,632.55
1,632.55
3,266.79
3,266.79
1.04
1.04
442.27
143.60
1.00
0.42
442.27
60.99
503.26
259.18
206.61
412.70
1.94
442.27
143.60
1.00
0.42
442.27
60.53
502.80
259.18
206.61
412.70
1.94
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
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
45
Average
price/FAC
1,717.79
1,717.79
850,893 km
4
Unaudited
DSAC
£
1,780.22
1,780.22
55,343 links
618,299 km
Unaudited
(D)LRIC
£
1.00
1.00
72,374 links
32
FAC (see
App 1.2)
£
.
Section 7 - Review of Access Markets
Section 7.6 - TISBO (up to and including 8Mbit/s)(continued)
Detailed service analysis
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
£
(sx)
n/a
n/a
n/a
n/a
519.34
1,697.47
1,592.06
3,326.32
0.31
(sx)
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
(sx)
(sx)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1,750.00
81,361.69
77,510.51
150,848.87
0.02
Average
price/FAC
For the year ended 31 March 2011
Internal SDSL
11.00
External Radio Backhaul Service - sub 2Mbit/s connections
External Radio Backhaul Service - sub 2Mbit/s rentals
Internal Radio Backhaul Service - 2Mbit/s connections
External Radio Backhaul Service - 2Mbit/s connections
Internal Radio Backhaul Service - 2Mbit/s rentals
External Radio Backhaul Service - 2Mbit/s rentals
External Netstream 16 LL 2Mbit/s connections
-
-
Internal Third Party Customer Infrastructure
External Third Party Customer Infrastructure
7.00
Internal Excess construction charges
External Excess construction charges
5.00
TOTAL
(b)
(sx)
(ux)
(un)
(ao)
(*)
16.00
4
16
124.00
47
124
(ux)
145 circuits
(ux)
3,568 circuits
12,640 circuits
(ux)
(ux)
-
0
20.00
20
(ux)
(sx)
n/a
n/a
n/a
n/a
-
0
(ux)
(sx)
n/a
n/a
n/a
n/a
4
4
(ux)
(ux)
(sx)
(sx)
Estimated cost of £0.3m
4.00
-
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
External Protected Path Variants and Resilience
Roundings
0
19
47.00
External Netstream 16 LL 2Mbit/s rentals CLZ
Equipment depreciation
19.00
4.00
External Netstream 16 LL 2Mbit/s rentals non CLZ
Support Service
Internal Protected Path Variants and Resilience
11
2.00
1.00
3
335
337
672
13 circuits
Estimated cost of £0.7m
Estimated equipment depreciation of £34.2m
See glossary for volume unit descriptors.
This service comprises a number of individual prices.
This service comprises a number of individual volumetrics.
This service comprises a large number of volumetrics and prices.
The price for 64kbit/s enhanced maintenance is weighted to include different 64kbit/s equivalent services.
This component is attributed on a % basis so no volume or unit cost is derivable.
46
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
24
29
13
13
37
42
13
17
15
20
(1)
1
(1)
(2)
4
8
-
30
44
7
(2)
75
97
Return
on
MCE
9.1 %
(1.9)%
Detailed service analysis
Non-discriminnation
Revenue
£m
Volume Unit (b)
Service
Internal Partial and Private Circuits 34/45Mbit/s - connections
External Partial and Private Circuits 34/45Mbit/s - connections
0
0
14 circuits
92 circuits
106
Partial and Private Circuits 34/45Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
4
Cost orientation
Average Proportion
price per included in
price list calculation
£
Average
price
£
FAC (see
App 1.2)
£
1,837.79
1,837.79
4,032.43
4,032.43
3,679.97
3,679.97
13,241.87
13,241.87
0.46
0.46
3,255.26
23.87
3,279.13
2,674.75
1,834.54
5,786.86
1.23
3,255.26
23.87
3,279.13
2,674.75
1,834.54
5,786.86
1.23
Unaudited Unaudited
Average
(D)LRIC
DSAC price/FAC
£
£
For the year ended 31 March 2012
3,255.26
222.02
3,255.26
222.02
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total External
3
Partial and Private Circuits 34/45Mbit/s - distribution
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total Internal
14
1.00
0.11
1,328 links
1.00
0.11
771 links
511.05
2.51
1.00
1.00
511.05
2.51
513.56
242.88
149.52
680.72
2.11
511.05
2.51
1.00
1.00
511.05
2.51
513.56
242.88
149.52
680.72
2.11
26,860 km
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
6
12,397 km
Partial and Private Circuits 34/45Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
6
1,964 le
2,748.50
222.02
1.00
0.91
2,748.50
201.36
2,949.86
6,034.66
2,037.49
12,019.04
0.49
2,748.50
222.02
1.00
0.91
2,748.50
201.36
2,949.86
6,034.66
2,037.49
12,019.04
0.49
n/a
n/a
n/a
n/a
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
3
Netstream 16 LL 45Mbit/s rentals
0
(ux)
(sx)
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
0
1
(ux)
(ux)
(sx)
(sx)
Equipment depreciation
0
Roundings
TOTAL
891 le
Estimated cost of £0.2m
Estimated cost of £0.5m
Estimated equipment depreciation of £3.8m
37
47
Section 7 - Review of Access Markets
Section 7.7 - TISBO (above 8Mbit/s up to and including 45Mbit/s)(continued)
Detailed service analysis
Non-discrimin
nation
Revenue
£m
Volume Unit (b)
Service
Internal Partial and Private Circuits 34/45Mbit/s - connections
External Partial and Private Circuits 34/45Mbit/s - connections
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)
£
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
Unaudited Unaudited
Average
(D)LRIC
DSAC price/FAC
£
£
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
3
3,118.62
212.70
1.00
0.55
3,118.62
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
3,118.62
117.80
3,236.42
2,572.20
1,917.28
3,904.73
1.26
489.65
2.41
492.06
388.59
268.20
850.81
1.27
489.65
2.41
492.06
388.59
268.20
850.81
1.27
1,787 links
1,062 links
489.65
2.41
15
1.00
1.00
31,210 km
489.65
2.41
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
6
11,484 km
Partial and Private Circuits 34/45Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
7
2,810 le
1.00
1.00
2,512.52
212.70
1.00
0.45
2,512.52
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
2,512.52
94.91
2,607.43
6,315.02
3,094.77
11,400.99
0.41
n/a
n/a
n/a
n/a
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
3
Netstream 16 LL 45Mbit/s rentals
0
(ux)
(sx)
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
1
(ux)
(ux)
(sx)
(sx)
Equipment depreciation
-
Roundings
TOTAL
(b)
(sx)
(ux)
(un)
1,062 le
Estimated cost of £0.5m
Estimated cost of £1m
Estimated equipment depreciation of £5.1m
42
See glossary for volume unit descriptors.
This service comprises a number of individual prices.
This service comprises a number of individual volumetrics.
This service comprises a large number of volumetrics and prices.
48
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
32
43
18
25
Revenue
£m
Operating
costs
£m
50
68
11
15
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
15
20
1
(2)
(2)
1
5
Average
price per
price list
£
Proportion
included in
calculation
Total CCA
operating
Roundings
costs
£m
£m
-
25
39
Return
£m
MCE
£m
25
29
72
92
Return
on
MCE
34.5 %
30.8 %
Detailed service analysis
Non-discriminnation
Revenue
£m
Volume Unit (b)
0
0
6 circuits
7 circuits
13
Cost orientation
Average
price
£
FAC (see
App 1.2)
£
Unaudited Unaudited
(D)LRIC
DSAC
£
£
Average
price/FAC
2,080.48
2,080.48
4,045.23
4,045.23
3,691.63
3,691.63
13,296.69
13,296.69
0.51
0.51
For the year ended 31 March 2012
Service
Internal Partial and Private Circuits 140/155Mbit/s - connections
External Partial and Private Circuits 140/155Mbit/s - connections
Partial and Private Circuits 140/155Mbit/s - link
Main link fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
0
0
7
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
1
12
Netstream 16 LL 155Mbit/s rentals
TOTAL
10,955.86
7,498.05
23,197.54
0.84
9,081.80
416.52
1.00
0.42
9,081.80
175.48
9,257.28
10,955.86
7,498.05
23,197.54
0.84
451.92
4.31
456.23
450.16
239.26
1,317.43
1.01
451.92
4.31
456.23
450.16
239.26
1,317.43
1.01
759 links
79 links
7
16,368 km
1
1,302 km
12
1,191 le
1.00
1.00
10,000.66
416.52
1.00
0.63
10,000.66
264.18
10,264.84
7,339.10
4,137.85
14,743.34
1.40
10,000.66
416.52
1.00
0.63
10,000.66
264.18
10,264.84
7,339.10
4,137.85
14,743.34
1.40
n/a
n/a
n/a
n/a
1
15
15
(ux)
(sx)
0
6
0
(ux)
(ux)
(sx)
(sx)
6
91 le
1.00
1.00
1
Equipment Depreciation
Roundings
9,081.80
175.48
9,257.28
451.92
4.31
1
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
1.00
0.42
451.92
4.31
7
Terminating segment charge per year
Enhanced maintenance per kilometre charge per year
Total External
Partial and Private Circuits 140/155Mbit/s - local end
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total Internal
7
9,081.80
416.52
-
-
-
32
18
50
Estimated cost of £1.3m
Estimated cost of £0.4m
Estimated equipment depreciation of £0.4m
49
Section 7 - Review of Access Markets
Section 7.8 - TISBO (above 45Mbit/s up to and including 155Mbit/s)(continued)
Detailed service analysis
Cost orientation
Non-discrimination
Revenue
£m
Volume Unit (b)
0
0
8 circuits
12 circuits
20
Average
price per
price list
£
Proportion
included in
calculation
Unaudited Unaudited
(D)LRIC
DSAC
£
£
Average
price/FAC
Average
price
£
FAC (see
App 1.2)
£
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 - connections
External Partial and Private Circuits 140/155Mbit/s - connections
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
8
Local end fixed charge per year
Enhanced maintenance fixed charge per year
Total External
8,882.57
6,347.07
13,266.66
1.11
9,626.07
398.75
1.00
0.49
9,626.07
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
104 links
11
21,259 km
1
1,133 km
8
781 le
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
9,869.12
398.75
1.00
0.51
9,869.12
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
9,869.12
201.86
10,070.98
10,638.95
7,027.14
18,045.16
0.95
n/a
n/a
n/a
n/a
21
21
(ux)
(sx)
1
9
1
(ux)
(ux)
(sx)
(sx)
1
-
(1)
43
25
68
Equipment Depreciation
-
1.00
1.00
1
9
104 le
1.00
1.00
1
Netstream 16 LL 155Mbit/s rentals
(b)
(sx)
(ux)
9,626.07
196.89
9,822.96
1,606 links
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
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
Estimated cost of £2.5m
Estimated cost of £0.2m
Estimated equipment depreciation of £0.4m
See glossary for volume unit descriptors.
This service comprises a number of individual prices.
This service comprises a number of individual volumetrics.
50
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
445
317
280
237
725
554
246
193
215
195
(23)
19
(4)
5
96
84
-
530
496
195
58
1,357
1,301
Detailed service analysis
Non-discrimination
Revenue
Volume Unit (b)
Cost orientation
Average
price
£
£m
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
For the year ended 31 March 2012 (g)
Service
Wholesale extension services 10Mbit/s rentals - Internal
Wholesale extension services 10Mbit/s rentals - External
Wholesale extension services 100Mbit/s rentals - Internal
Wholesale extension services 100Mbit/s rentals - External
58
Wholesale extension services 1000Mbit/s rentals - Internal
Wholesale extension services 1000Mbit/s rentals - External
25
Wholesale extension services other bandwidth rentals - Internal
Wholesale extension services other bandwidth rentals - External
10
Wholesale extension services connections - Internal
Wholesale extension services connections - External
34
46
34
28,240 le
20,888 le
49,128
1,645.09
1,638.87
2,157.40
2,157.40
1,021.85
1,021.85
4,481.84
4,481.84
0.76
0.76
38
58
38
26,348 le
17,582 le
43,930
2,188.58
2,141.53
2,297.00
2,297.00
1,104.81
1,104.81
4,806.74
4,806.74
0.95
0.93
15
25
15
4,289 le
2,764 le
7,053
5,808.98
5,483.79
3,840.78
3,840.78
2,259.46
2,259.46
8,186.96
8,186.96
1.51
1.43
3
10
3
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
4
1
4
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
46
1
51
Return
on
MCE
14.3 %
4.5 %
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Detailed service analysis
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 2012 (g)
Backhaul extension services 1000Mbit/s rentals - external
Backhaul extension services other bandwidth rentals - external
Backhaul extension services other bandwidth connections - external
Other internal Ethernet rentals
Other internal Ethernet connections
3,708.55
2,010.40
7,224.54
0.95
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
7
4
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
2
2
2
2
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
6
16
6
6,531 ccts
2,125 ccts
8,656
2,503.77
2,808.63
3,104.63
3,493.12
1,594.24
1,736.10
6,397.22
7,210.74
0.81
0.80
17.000
48
17
17,054 ccts
5,667 ccts
22,721
2,823.63
2,972.40
3,375.48
3,552.08
1,736.58
1,801.10
7,021.95
7,391.83
0.84
0.84
10.000
49
10
4,983 ccts
1,069 ccts
6,052
9,881.25
9,235.53
6,032.42
6,099.10
3,264.71
3,287.00
13,129.73
13,264.57
1.64
1.51
4
10
4
6,307 ccts
2,927 ccts
9,234
1,548.55
1,516.58
1,580.87
1,579.81
1,192.70
1,191.72
4,969.02
4,966.87
0.98
0.96
11.000
23
11
11,673 ccts
5,663 ccts
17,336
1,935.80
1,898.60
1,585.87
1,584.74
1,197.32
1,196.28
4,981.25
4,978.94
1.22
1.20
6.000
20
6
5,247 ccts
1,621 ccts
6,868
3,769.34
3,857.89
1,609.45
1,610.01
1,219.12
1,219.63
5,038.88
5,040.70
2.34
2.40
12
1
12
1
1,488 ccts
144 ccts
1,632
8,136.13
4,670.31
8,941.65
1,620.61
5,088.19
1,209.38
18,875.04
5,066.00
0.91
2.88
75
84
75
243,360 fibre km
211,439 fibre km
454,799
344.01
356.61
169.66
169.66
30.33
30.33
606.23
606.23
2.03
2.10
19
5,385 le
7
2
7
2
7
4
Other external Ethernet rental
Other external Ethernet connection
Ethernet Access Direct 10Mbit/s rental - Internal
Ethernet Access Direct 10Mbit/s rental - External
16
Ethernet Access Direct 100Mbit/s rental - Internal
Ethernet Access Direct 100Mbit/s rental - External
48
Ethernet Access Direct 1000Mbit/s rental - Internal
Ethernet Access Direct 1000Mbit/s rental - External
49
Ethernet Access Direct 10Mbit/s connection - Internal
Ethernet Access Direct 10Mbit/s connection - External
10
Ethernet Access Direct 100Mbit/s connection - Internal
Ethernet Access Direct 100Mbit/s connection - External
23
Ethernet Access Direct 1000Mbit/s connection - Internal
Ethernet Access Direct 1000Mbit/s connection - External
20
Ethernet Backhaul Direct rentals - external
Ethernet Backhaul Direct connections - external
Main link rental charges - Internal
Main link rental charges - External
3,520.92
19
84
Support Service
Equipment depreciation
Excess construction charges - Internal
Excess construction charges - External
Roundings
TOTAL
0
44
13
- 445
44
13
1
(1)
280
725
Estimated equipment depreciation of £5.2m
misc
(sx)
(sx)
(ux)
(ux)
52
Estimated matched cost of £29m (*)
Estimated matched cost of £8.3m (*)
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Detailed service analysis
Non-discrim
mination
Revenue
Volume Unit (b)
Cost orientation
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 rentals
External Wholesale extension services 10Mbit/s rentals
34
54
34
32,846
21,055
53,901
le
le
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
16,127
45,538
le
le
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
2,324
6,915
le
le
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
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
3
1
3
1,586
4,142
5,728
le
le
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
4,766
7,088
le
le
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
936
1,602
le
le
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 rentals
External Wholesale extension services 100Mbit/s rentals
64
Internal Wholesale extension services 1000Mbit/s rentals
External Wholesale extension services 1000Mbit/s rentals
27
Internal Wholesale extension services other bandwidth rentals
External Wholesale extension services other bandwidth rentals
11
Internal Wholesale extension services 10Mbit/s connections
External Wholesale extension services 10Mbit/s connections
1
Internal Wholesale extension services 100Mbit/s connections
External Wholesale extension services 100Mbit/s connections
2
Internal Wholesale extension services 1000Mbit/s connections
External Wholesale extension services 1000Mbit/s connections
2
Internal Wholesale extension services other bandwidth connections (t)
External Wholesale extension services other bandwidth connections (t)
0
53
Section 7 - Review of Access Markets
Section 7.9 - AISBO (up to and including 1Gbit/s)(continued)
Detailed service analysis
Non-discrim
mination
Revenue
Volume Unit (b)
Cost orientation
Average
price
£
£m
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
Average
price/FAC
£
For the year ended 31 March 2011
18
18
4,915
3,575.76
3,631.57
1,940.31
6,149.24
0.98
External Backhaul extension services other bandwidth rentals
7
7
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
External Backhaul extension services connections
6
6
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
1
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
External Backhaul extension services 1000Mbit/s rentals
Other internal Ethernet connections
1
Other internal Ethernet rentals
2
le
2
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
Other external Ethernet connections
1
1
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
Other external Ethernet rentals
5
5
(ux)
(sx)
(ux)
(ux)
(ux)
n/a
6
34
6
15,772
3,478
19,250
circuits
circuits
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
2,496
10,737
circuits
circuits
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 connections
External Ethernet Access Direct connections
34
Internal Ethernet Access Direct rentals
External Ethernet Access Direct rentals
32
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
Ethernet Backhaul Direct connections external
Ethernet Backhaul Direct rentals external
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
(b)
(sx)
(ux)
(t)
(g)
(*)
misc
0
18
2 -
fibre km
fibre km
Estimated equipment depreciation of £4m
(sx)
(sx)
(ux)
(ux)
See glossary for volume unit descriptors.
This service comprises a number of individual prices.
This service comprises a number of individual volumetrics.
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 4.2.1 for improved disclosure of services in the AISBO market.
This component is attributed on a % basis so no volume or unit cost is derivable.
54
Estimated matched cost of £11.2m (*)
Estimated matched cost of £8.8m (*)
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
-
759
636
Revenue
£m
Operating
costs
£m
759
636
398
328
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
204
146
8
(15)
51
41
(33)
70
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
131
66
2,108
1,633
FAC (see Unaudited
App 1.2)
(D)LRIC
£
£
Unaudited
DSAC
£
Average
price/FAC
-
628
570
Detailed service analysis
Non-discrim
mination
Volume Unit (b)
Revenue
£m
Cost orientation
Average
price
£
For the year ended 31 March 2012
Service
MPF New Provides
58
58
1,173,972 conns
49.35
40.22
38.82
73.40
1.23
MPF Single Migrations
31
31
768,307 conns
39.79
34.29
33.19
62.90
1.16
MPF Buk Migrations
15
15
410,480 conns
35.84
23.43
22.53
44.81
1.53
MPF Ceases
11
11
1,143,533 ceases
9.20
10.12
9.53
22.42
0.91
MPF Rentals
451
451
91.50
110.75
65.77
155.66
0.83
MPF Room Build
19
19
4,927,978 lines
1,520 rooms
12,793.57
13,756.18
8,053.46
20,433.54
0.93
MPF Hostel Rentals
61
61
12,906 hostels
4,720.79
6,499.26
4,180.78
10,009.81
0.73
MPF Tie Cables
28
28
325,953 cables
86.89
45.11
25.88
64.75
1.93
SMPF New Provides
25
25
633,855 conns
39.79
28.84
27.83
53.72
1.38
39.79
33.60
32.50
61.56
1.18
44.45
1.46
SMPF Single Migrations
8
8
195,157 conns
SMPF Bulk Migrations
2
2
58,299 conns
34.13
23.30
22.43
SMPF Ceases
7
7
581,871 ceases
12.83
10.28
9.69
22.66
1.25
SMPF Rentals
43
43
14.70
7.25
6.29
12.32
2.03
-
-
759
759
Roundings
TOTAL
2,930,588 lines
55
Return
on
MCE
6.2 %
4.1 %
Section 7 - Review of Access Markets
Section 7.10 - Wholesale local access (continued)
Detailed service analysis
Non-discrim
mination
Revenue
£m
Cost orientation
Volume Unit (b)
Average
price
£
FAC (see Unaudited
App 1.2)
(D)LRIC
£
£
Unaudited
DSAC
£
Average
price/FAC
For the year ended 31 March 2011
Service
MPF New Provides
39
39
606,451
conns
64.41
43.99
41.36
61.83
1.46
MPF Single Migrations
47
47
1,223,557
conns
38.64
37.40
35.14
52.51
1.03
MPF Buk Migrations
4
4
102,908
conns
34.80
25.01
23.49
36.45
1.39
MPF Ceases
5
5
646,855
ceases
7.49
7.65
7.17
13.88
0.98
MPF Rentals
334
334
3,722,033
89.75
128.75
60.40
162.01
0.70
lines
MPF Room Build
19
19
1,527
rooms
12,437.41
177.55
164.54
340.20
70.05
MPF Hostel Rentals
62
62
12,845
hostels
4,844.58
6,061.49
5,458.62
8,411.95
0.80
MPF Tie Cables
24
24
41,134
cables
577.62
500.04
226.37
559.53
1.16
SMPF New Provides
27
27
706,128
conns
38.64
31.59
29.64
45.16
1.22
SMPF Single Migrations
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
(b)
See glossary for volume unit descriptors.
56
Section 8 - Review of Other Wholesale Markets
Section 8 - Review of Other Wholesale Markets
Section 8
Review of Other Wholesale Markets
57
Section 8 - Review of Other Wholesale Markets
Section 8.1 - Financial Performance in Other Wholesale Markets (Annex 8)
For the year ended 31 March 2012
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
Wholesale Broadband Access - Market 2
Total Other Wholesale Markets
For the year ended 31 March 2011 (h)
Call origination on FPN networks
Single transit on FPN networks
Technical areas (Interconnect Circuits) (h)
Fixed call termination
Wholesale trunk segments
Technical areas (Point of Handover)
Wholesale Broadband Access - Market 1
Wholesale Broadband Access - Market 2
Total Other Wholesale Markets
Internal
Revenue
£m
136
0
15
50
76
0
266
171
External
Revenue
£m
45
4
34
103
14
6
149
71
Total
Revenue
£m
181
4
49
153
90
6
415
242
714
426
1,140
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
HCA Costs
£m
145
3
29
123
35
9
339
178
861
HCA Costs
£m
163
4
33
146
49
14
324
171
904
(h) See Section 4 - Basis of Preparation for explanation of restatement.
Total Other Wholesale Markets return on MCE excluding all CCA holding gains/losses and other adjustments are presented in Section 1.3.
58
CCA
Adjustments
£m
(3)
0
(1)
(3)
(8)
2
(1)
1
(13)
CCA
Adjustments
£m
23
0
3
25
12
1
47
30
141
Roundings
£m
-
Roundings
£m
-
Total CCA
Operating
Costs
£m
142
3
28
120
27
11
338
179
848
Total CCA
Operating
Costs
£m
186
4
36
171
61
15
371
201
1,045
Return
£m
39
1
21
33
63
(5)
77
63
292
Return
£m
3
0
19
(5)
47
(7)
(5)
39
91
Mean Capital
Employed
£m
310
10
54
317
164
18
417
195
Return on
MCE
%
12.5 %
10.2 %
38.9 %
10.7 %
38.6 %
(28.7)%
18.3 %
32.1 %
1,485
19.7 %
Mean Capital
Employed
£m
361
11
62
380
212
28
476
225
Return on
MCE
%
0.9 %
(2.1)%
30.7 %
(1.2)%
22.4 %
(24.8)%
(0.9)%
17.7 %
1,755
5.2 %
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. The substitution of fixed Public Switched Telephone
Network (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.
During 2011/12 we reviewed the Technical Areas (Interconnect Circuits) Market. As a result the prior
year comparatives for 2010/11 were restated and £6m of operating costs were moved out of the
Technical Areas (Interconnect Circuits) Market into Residual (Section 4).
Wholesale trunk segments are bought by Communications Providers in combination with partial private
circuits in the TISBO markets. There continues to be a decline for traditional Time Division Multiplexing
(TDM) circuits as customers migrate to 21CN services like Ethernet. Competition and customer demand
for alternative technologies has resulted in falling volumes in this market.
Point of Handover charges relate to the cost of providing interconnection between operators’ networks
for TISBO services. Revenue has decreased in 2011/12 as customers have looked to rationalise their
networks and new prices were introduced in October 2011.
The wholesale broadband market has continued to show growth over the last year. The combined
Digital Subscriber Line (DSL)(including LLU) and Cable market has grown by 3% in the year.
Section 8.2.2 - Market Level Financial Review of Other Wholesale SMP Markets
59
Section 8 - Review of Other Wholesale Markets
(Annex 8.2.2
14) – Market Level Financial Review of Other Wholesale SMP Markets
Section
(Annex 14)
Market: Call origination on fixed public narrowband networks
Definition
Call Origination is 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 by Ofcom in the Fixed Narrowband Services Wholesale Market
Review Statement as “any and all of the following specific services provided by the Dominant Provider:
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
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. It was concluded that BT still has SMP in the call origination
market. Ofcom also determined that due to decline in the market BT no longer has an obligation to
supply Flat Rate Internet Access Call Origination (FRIACO). As of 1 October 2009 the price control on
both DLE FRIACO and Single Tandem FRIACO fell away.
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 Call Origination market.
The charge controls for the services in this market are as follows:
(1 October 2009 – 30 September 2013)
RPI+2.75%
DLE FRIACO
Not applicable
Single Tandem FRIACO
Not applicable
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.
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. It was concluded that Single Transit is in a separate market to
that containing ITC and ITT. 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. Ofcom also confirmed that the ITT and ITC market remained
competitive, and as a result no SMP was found.
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 ending 31 March 2011, cost accounting obligations would be removed but accounting separation
obligations would remain.
Current NCC
Call Origination
Market: Single transit on fixed public narrowband networks
Definition
• Call origination (including operator assistance and emergency intermediate services); and
• Call origination (including emergency intermediate services).”
Service
• The on-going migration of call origination minutes from fixed public narrowband networks to
mobile networks.
• The substitution impact of Voice over Internet Protocol (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 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 Determination on 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.
The charge controls for the services in this market are as follows:
Key Market Changes
Call origination has declined steadily throughout the year driven by several factors:
60
Section 8 - Review of Other Wholesale Markets
Key Regulatory Changes
Service
Current NCC
PPP
RPI+1.50%
In 2009/10 Ofcom carried out a review of the Fixed Narrowband Services Wholesale Market and a
review of the Network Charge Controls. It was concluded that BT still has SMP in the Technical Area for
Interconnect Circuits.
(1 October 2009 – 30 September 2013)
The charge controls for the services in this market are as follows:
Key Market Changes
Service
Volumes of transit calls declined during the financial year ended 31 March 2012 primarily due to other
operators connecting directly with each other.
Market: Technical Areas (Interconnect Circuits)
Current NCC
(1 October 2009 – 30 September 2013)
Interconnect Circuits Technical Area
RPI+3.75%
Key Market Changes
Definition
Interconnect Circuits provide the physical connection between interconnected networks. They link the
exchanges of two interconnecting CPs in order to enable traffic to pass between their networks.
Interconnection circuits are a necessary facility for interconnection and hence are regulated as a
‘technical area’ needed for the fulfilment of BT’s obligations under remedies imposed in SMP markets.
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;
• Intra-Building Circuit (IBC): BT provides a 2Mbit connection between the transmission
infrastructure and the switch. An IBC is not ordered separately by customers, it will be included
with a CSI or ISI circuit ordered;
• 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; and
• 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).
61
Overall the fixed line calls market is shrinking. The contraction of the fixed market is driven by
substitution of broadband and mobile.
Interconnect Circuit volumes have declined slowly throughout the year driven by several factors:
• On-going migration from fixed public narrowband networks to mobile networks.
• CPs building their own 21CN networks and considering requirements for NGN inter-connects
with the BT network.
• CPs rationalising their existing interconnections with BT.
• CPs moving to Wholesale Calls packages and IP solutions – removing the requirement for
Interconnect Circuits.
Another factor is the substitution impact of VoIP calls growing as Broadband Service Providers move
towards double and triple play offerings in a move to consolidate market share and grow revenue.
Market: Fixed Call Termination
Definition
Similar to call origination, call termination includes the conveyance of all signals (including relevant
control signals) required to terminate calls on a customer’s exchange line from the first point in the
network where those signals can be accessed by another communications provider.
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.
Section 8 - Review of Other Wholesale Markets
“Fixed Call Termination Wholesale Service” is defined by Ofcom in the Fixed Narrowband Services
Wholesale Market Review Statement as “an Electronic Communications Service provided by the
Dominant Provider from (and over) the local exchange to (but not including the conveyance of Signals
over) an Exchange Line.”
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. It was concluded that BT still has SMP in the call termination
market. In the Market Review, Ofcom also found that all providers of fixed geographic call termination
had SMP for termination on their own networks
The Determination on 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 Fixed Call Termination market.
The charge controls for the services in this market are as follows:
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.
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.
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 October 2009 – 30 September 2013)
Key Regulatory Changes
Call Termination
RPI+3.75%
PPP
RPI+1.50%
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.
Service
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.
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.
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.
Call termination has declined steadily throughout the year driven by several factors:
• The on-going 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 LLU lines is eroding call termination volumes as major players move away
from WLR.
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.
A table of the controls can be found in Section 7.2.2 – Market: Traditional Interface Symmetric
Broadband Origination (up to and including 8Mbit/s).
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. Ofcom are reviewing the Business
Connectivity Market during 2012/13 and issued their consultation on 18 June 2012. In parallel to this,
Ofcom are reviewing the Leased Lines Charge Control and their consultation was issued on 5 July 2012.
62
Section 8 - Review of Other Wholesale Markets
Key Market Changes
Market: Wholesale Broadband Access
For PPCs, there continues to be a fall in demand for traditional Time Division Multiplexing (TDM) circuits
as customers continue to migrate to 21CN services like Ethernet. Competition and customer demand
for alternative technologies is resulting in falling volumes in this market.
Wholesale Broadband Access relates to asymmetric broadband access which provides an ’always-on’
service.
Price changes in the market took place in October 2011 to enable compliance with the charge control
and regulatory obligations.
Wholesale Broadband Access is split into three geographic markets based on the Ofcom December
2010 final Statement. BT does not have SMP or regulatory obligations in Wholesale Broadband Access
Market 3, which 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% of the customers in that
exchange area.
Market: Technical Areas (Point of Handover)
Definition
Market: Wholesale Broadband Access Market 1
Point of Handover (PoH) is a Technical Area associated with the 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.
Definition
In all TISBO markets where BT has SMP, we are required to provide PoH services in two varieties:
Customer Sited Handover (CSH) and In-Span Handover (ISH), 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.
Key Regulatory Changes
Key Regulatory Changes
In their final statement on the SMP review in December 2010, Ofcom confirmed that the SMP
obligations applying to Wholesale Broadband products would include a cost orientation obligation on
BT in Market 1.
As part of the Leased Lines Charge Control on 2 July 2009, Ofcom 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.
A table of the controls can be found in Section 7.2.2 – Market: Traditional Interface Symmetric
Broadband Origination (up to and including 8Mbit/s).
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. Ofcom are reviewing the Business
Connectivity Market during 2012/13 and issued their consultation on 18 June 2012. In parallel to this,
Ofcom are reviewing the Leased Lines Charge Control and their consultation was issued on 5 July 2012.
Key Market Changes
PoH has been impacted by customers rationalising their networks, i.e. reducing the number of sites and
consequently points of handover, and instead increasing the bandwidth to remaining sites.
Price changes in the market took place in October 2011 to enable compliance with the charge control
and regulatory obligations.
63
Market 1 covers BT exchange areas where only BT provides Wholesale Broadband Access.
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.
BT continues to be 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’.
In July 2011, Ofcom published its Final Statement for the Wholesale Broadband Access Charge Control.
Ofcom imposed an RPI-X charge control where X is 12% on IPStream Max and Max Premium end user
access services within Market 1. There is a single overall basket for end user access (EUA) connections,
rentals, end user bandwidth charges, contracted bandwidth per node rental charges, re-grades,
migrations, cancellations, handover rentals, and 20CN interconnect link rentals at the 1Gbits/s and
10Gbit/s bandwidths. In addition, Ofcom imposed sub-cap RPI-X where X is 0% controls on contracted
bandwidth per node rental charges, re-grades, migrations and cancellations.
Section 8 - Review of Other Wholesale Markets
Basket
Value of X
Sub Caps
IPStream Max and Max
Premium (up to 8Mbit/s)
RPI-12.00%
RPI-0% sub cap on IPS Connect
contracted bandwidth per Mbit/s per
node rental.
There have been reductions in BT’s external wholesale end-user volumes over the year reflecting
continued rollout of LLU and consequential migration of lines from BT Wholesale. However, the growth
in internal volumes was sufficient to offset the external decline. BT’s Datastream product has continued
to decline in the year (from approximately 65,000 to 57,000). This was driven by migration to LLU and
to alternative BT products (IPStream Connect / 21CN).
RPI-0% sub cap on IPS Connect EUA
re-grade.
RPI-0% sub cap on IPS Connect EUA
migration.
RPI-0% sub cap on IPS Connect EUA
cancellation.
The current charge controls run from 17 August 2011 to March 2014.
Market: Wholesale Broadband Access Market 2
Definition
Market 2 covers 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% of the customers
in that exchange area.
Key Regulatory Changes
BT Wholesale continues to have regulatory and EOI obligations in relation to the supply of Wholesale
Broadband Access products in Market 2.
In their final statement on the SMP review in December 2010, Ofcom confirmed that the SMP
obligations applying to Wholesale Broadband products would include a cost orientation obligation on
BT in Market 2.
BT continues to be 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 2010/11
Update’.
Key Market Changes
The wholesale broadband market has continued to show growth over the last year. The combined
Digital Subscriber Line (DSL) (including Local Loop Unbundled lines) and Cable market has grown by 6%
in the year to March 2012. Cable lines have remained steady at 4.1m, whilst Local Loop Unbundling
(LLU) lines has grown 9% in the year (from 7.6 to 8.3m lines). BT’s DSL lines have increased in the year
from 8.1 to 8.5m lines in March 2012.
64
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
136
143
45
46
2012
2011
Revenue
£m
Operating
costs
£m
181
189
103
110
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
42
53
(3)
4
(1)
-
1
19
Total CCA
operating
Roundings
costs
£m
£m
-
142
186
Return
£m
MCE
£m
39
3
310
361
Return
on
MCE
12.5 %
0.9 %
Detailed service analysis
Non- discrimination
Cost orientation
NCC traaffic - millions of minutes (mm)
Evening
Average NCC rates - pence per minute (ppm)
Weekend
ppm
Weighted
Average
ppm
0.124
0.124
0.098
0.098
0.281
0.281
0.129
0.129
4,396
0.281
347
1,633
7
127
12,413
16,992
68,401
94,196
Weekend
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
25
153
8,369
135
1,337
104
1,065
392
10,771
0.272
0.272
Internal Wholesale call originating local exchange segment (incl Operator Assistance)
External Wholesale call originating local exchange segment (incl Operator Assistance)
115
9
31,756
2,717
11,219
679
10,834
657
53,809
4,053
11
3,767
352
277
Internal Wholesale call origination local exchange Stick
2
1,033
253
Internal Wholesale call origination local exchange Stick (ISDN)
0
115
5
8
10
43,075
56,104
12,913
21,100
24 hours
Evening
ppm
FAC (see
App 1.2)
Unaudited
(D)LRIC
Unaudited
Average
DSAC price/FAC
ppm
ppm
ppm
ppm
0.175
0.236
0.238
0.238
0.153
0.153
0.683
0.683
0.73
0.99
0.101
0.101
0.213
0.226
0.198
0.198
0.128
0.128
0.577
0.577
1.08
1.14
0.129
0.101
0.258
0.259
0.166
0.735
0.99
0.159
0.073
0.057
0.124
0.133
0.075
0.358
0.93
0.159
0.073
0.057
0.149
0.180
0.099
0.480
0.83
0.014
0.014
0.007
0.007
0.005
0.005
0.011
0.011
0.011
0.011
0.010
0.010
0.048
0.048
1.00
0.98
For the year ended 31 March 2012
Service
Internal Wholesale call originating local exchange segment (ISDN) (incl OA)
Internal Wholesale PPP
External Wholesale PPP
Roundings
181
65
Section 8 - Review of Other Wholesale Markets
Section 8.3 - Call origination on fixed public narrowband networks (continued)
Detailed service analysis
Non- discrimination
Cost orientation
NCC tra
affic - millions of minutes (mm)
Evening
Weekend
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
Day
ppm
Evening
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
Internal Wholesale call origination local exchange Stick
3
1,572
569
596
Internal Wholesale call origination local exchange Stick (ISDN)
0
177
10
10
197
0.145
0.066
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
24 hours
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
0.052
0.136
0.191
0.133
0.387
0.71
0.005
0.005
0.011
0.010
0.013
0.013
0.011
0.011
0.026
0.026
0.82
0.81
For the year ended 31 March 2011
Service
Internal Wholesale call originating local exchange segment (ISDN) (incl OA)
Internal Wholesale PPP
External Wholesale PPP
Roundings
1
189
66
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-dis
scrimination obligations
Single transit on fixed public narrowband networks
Summary
2012
2011
Internal
Revenue
£m
External
Revenue
£m
-
4
4
Revenue
£m
Operating
costs
£m
4
4
1
2
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
2
2
-
-
-
Total CCA
operating
Roundings
costs
£m
£m
-
3
4
Return
£m
MCE
£m
1
-
10
11
Return
on
MCE
10.2 %
(2.1)%
Detailed service analysis
Non- discrimination
Average NCC rates - pence per minute (ppm)
NCC traffic - m
millions of minutes (mm)
Revenue
£m
Day
Internal Wholesale single transit segment PSTN & ISDN
External Wholesale single transit segment PSTN & ISDN
0
4
78
12,601
11
5,083
3
4,141
92
21,825
0.024
0.024
Roundings
-
134
12,420
48
5,306
32
4,345
214
22,071
0.024
0.024
Evening
Weekend
24 hours
Day
ppm
Weekend
ppm
Weighted
Average
ppm
0.011
0.011
0.009
0.009
0.020
0.018
0.011
0.011
0.009
0.009
0.016
0.018
Evening
ppm
For the year ended 31 March 2012
Service
4
For the year ended 31 March 2011
Service
Internal Wholesale single transit segment PSTN & ISDN
External Wholesale single transit segment PSTN & ISDN
0
4
Roundings
4
67
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
2012
2011 Restated
Internal
Revenue
£m
External
Revenue
£m
15
18
34
37
Revenue
£m
Operating
costs
£m
49
55
19
21
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
10
12
(1)
1
-
2
Total CCA
operating
Roundings
costs
£m
£m
Return
£m
MCE
£m
21
19
54
62
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
-
28
36
Detailed service analysis
Non-discrim
mination
Cost orientation
Revenue
£m
Volume Unit (b)
Average
price
£
For the year ended 31 March 2012
Service
Customer Sited Interconnect (end to end circuit)
External Wholesale standard CSI connections (v)
External Wholesale standard CSI rentals - fixed (v)
External Wholesale standard CSI rentals - per km (v)
1
9
4
1
9
4
512 circuits
7,220 circuits
195,077 km
1,790.74
1,196.52
22.80
1,846.20
710.60
10.47
1,633.72
486.59
5.97
5,567.95
1,556.26
32.59
0.97
1.68
2.18
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
6
0
7
6
474 circuits
11,394 circuits
272,146 km
968.57
585.84
22.80
633.26
406.35
10.46
575.89
307.46
5.97
2,059.63
913.88
32.58
1.53
1.44
2.18
In Span Interconnect
External Wholesale intra-building circuits connections
External Wholesale intra-building circuits rentals
External Wholesale ISI rentals
2
3
0
2
3
0
2,068 circuits
35,115 circuits
7,954 100m
808.36
92.88
0.00
396.90
103.60
183.35
369.77
66.62
132.96
1,375.99
224.60
386.10
2.04
0.90
0.00
External Nominated ISI - per km
1
1
20,300 100m
68.75
56.61
22.86
194.25
1.21
External Wholesale rearrangements
1
1
1,808 circuits
412.87
919.37
802.16
2,647.29
0.45
7,481 circuits
1,103.64
606.99
419.98
1,331.66
1.82
Internal Wholesale standard CSI rental - fixed
8
8
Internal Wholesale standard CSI rentals - per km
5
5
Internal Wholesale intra-building circuits rentals
2
2
Roundings
-
-
-
15.000
34.000
49
TOTAL
202,129 km
18,585 circuits
68
22.80
10.47
5.97
32.59
2.18
92.88
103.60
66.62
224.60
0.90
Return
on
MCE
38.9 %
30.7 %
Section 8 - Review of Other Wholesale Markets
Section 8.5 - Technical areas (Interconnect Circuits)(continued)
Detailed service analysis
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
For the year ended 31 March 2011 (h)
Customer Sited Interconnect (end to end circuit)
External Wholesale standard CSI connections (v)
External Wholesale standard CSI rentals - 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
2,745.93
756.05
11.82
2,566.70
582.22
7.47
5,139.61
1,250.16
30.22
0.65
1.58
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
1,170.27
444.08
10.69
947.89
377.38
6.44
1,765.62
667.91
27.27
0.83
1.32
2.13
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
580.69
118.88
287.96
479.01
85.03
256.90
928.13
165.14
455.68
1.39
0.78
0.00
External Nominated ISI - per km
2
2
30,325 100m
68.75
100.31
56.49
260.47
0.69
1
412.87
1,103.64
1,403.97
569.71
1,328.49
434.29
2,637.83
925.51
0.29
1.94
External Wholesale rearrangements
Internal Wholesale standard CSI rental - fixed
9
1
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
(b)
(v)
(h)
1,391 circuits
8,539 circuits
258,305 km
21,886 circuits
See glossary for volume unit descriptors.
Revenues shown are prior to the 'revenue share' between BT and Other Communication Providers.
See Section 4 - Basis of Preparation for explanation of restatement.
69
22.80
10.43
6.17
26.92
2.19
92.88
113.26
79.78
151.79
0.82
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
50
66
103
100
153
166
82
92
41
54
(3)
5
(1)
(1)
1
21
-
120
171
33
(5)
317
380
Return
on
MCE
10.7 %
(1.2)%
Detailed service analysis
Non- discrimination
Cost orientation
NCC traaffic - millions of minutes (mm)
Average NCC rates - pence per minute (ppm)
Weekend
ppm
Weighted
Average
ppm
0.113
0.113
0.089
0.089
0.247
0.113
1,633
0.159
127
0.159
5,853
10,577
31,018
56,405
Revenue
£m
Day
45
103
15,305
32,145
3,003
12,859
3,906
10,208
22,214
55,212
0.247
0.247
Internal Wholesale call termination local exchange segment (ISDN)
4
1,450
81
98
1,629
Internal Wholesale call termination local exchange stick
2
1,033
253
347
Internal Wholesale call termination local exchange stick (ISDN)
0
115
5
7
19,440
32,302
5,725
13,526
Evening
Weekend
24 hours
Day
ppm
Evening
ppm
FAC (see Unaudited
App 1.2)
(D)LRIC
Unaudited
Average
DSAC price/FAC
ppm
ppm
ppm
ppm
0.201
0.187
0.186
0.186
0.117
0.117
0.481
0.481
1.08
1.00
0.089
0.231
0.251
0.156
0.650
0.92
0.073
0.057
0.124
0.133
0.075
0.358
0.93
0.073
0.057
0.149
0.180
0.099
0.480
0.83
0.237
0.237
0.108
0.108
0.085
0.085
0.185
0.178
0.225
0.225
0.172
0.172
0.443
0.443
0.82
0.79
For the year ended 31 March 2012
Service
Internal Wholesale call termination local exchange segment
External Wholesale call termination local exchange segment
Roundings
(1)
153
For the year ended 31 March 2011
Service
Internal Wholesale call termination local exchange segment
External Wholesale call termination local exchange segment
57
100
Internal Wholesale call termination local exchange segment (ISDN)
5
2,142
152
150
2,444
0.237
0.108
0.085
0.220
0.271
0.210
0.512
0.81
Internal Wholesale call termination local exchange stick
3
1,572
569
596
2,737
0.145
0.066
0.052
0.108
0.162
0.114
0.347
0.67
Internal Wholesale call termination local exchange stick (ISDN)
0
177
10
10
197
0.145
0.066
0.052
0.136
0.191
0.133
0.387
0.71
Roundings
1
166
70
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
76
94
14
14
90
108
15
19
20
30
(3)
4
(1)
(5)
9
-
27
61
63
47
164
212
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
Average
price/FAC
Detailed service analysis
Non-discrim
mination
Revenue
Volume Unit (b)
£m
Cost orientation
Average
price
£
£
£
£
For the year ended 31 March 2012
Service
Partial and Private circuits 2Mbit/s - trunk
Trunk charge per year
Enhanced maintenance per km charge per year
Total Internal
41
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
10
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
8
7
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
1
Roundings
- 76
889,692
213,342
47,201
km
15.71
8.41
49.07
2.90
km
43.95
1.68
45.63
15.71
8.41
49.07
2.90
km
394.79
2.51
397.30
128.38
74.49
385.37
3.09
128.38
74.49
385.37
3.09
4
9,316
km
394.79
2.51
397.30
8
38,685
km
210.21
4.31
214.52
176.41
81.10
555.96
1.22
176.41
81.10
555.96
1.22
954.98
440.68
2,963.02
0.68
0
1,765
km
210.21
4.31
214.52
7
10,871
km
645.04
1
1
1
(ux)
(ux)
1
(1)
14
90
0
Internal Partial and Private circuits 622Mbit/s - trunk
10
19
4
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
TOTAL
41
43.95
1.68
45.63
(sx)
(sx)
71
Estimated cost of £0.5m
Estimated cost of £0.4m
Return
on
MCE
38.6 %
22.4 %
Section 8 - Review of Other Wholesale Markets
Section 8.7 - Wholesale trunk segments (continued)
Detailed service analysis
Non-discrim
mination
Revenue
Volume Unit (b)
Cost orientation
Average
price
£
£m
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
3
11
Trunk charge per year
Enhanced maintenance per km charge per year
Total External
Internal Partial and Private circuits 622Mbit/s - trunk
0
17
Support Service
Internal Protected Path Variants and Resilience
External Protected Path Variants and Resilience
2
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
19
48,813 km
377.95
2.41
380.36
230.21
149.86
529.69
1.65
3
8,871 km
377.95
2.41
380.36
230.21
149.86
529.69
1.65
11
52,797 km
201.24
4.13
205.37
251.29
143.30
627.96
0.82
0
1,734 km
201.24
4.13
205.37
251.29
143.30
627.96
0.82
17
18,780 km
929.62
1,263.84
699.57
3,209.60
0.74
44
1
2
1
1
1
2
94
14
108
(ux)
(ux)
(sx)
(sx)
(b)
See glossary for volume unit descriptors.
(sx) This service comprises a number of individual prices.
(ux) This service comprises a number of individual volumetrics.
72
Estimated cost of £1.1m
Estimated cost of £0.4m
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
-
6
8
6
8
5
6
4
8
-
(1)
2
2
-
11
15
(5)
(7)
18
28
Average
price
£
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
£
£
£
Average
price/FAC
2,891.02
1,822.98
1,712.70
2,984.49
1.59
1,279.38
3,479.85
3,275.55
5,118.02
0.37
2,009.64
2,378.00
2,236.73
3,653.33
0.85
618.77
390.17
366.58
638.78
1.59
Detailed service analysis
Non-discrim
mination
Revenue
£m
Volume Unit (b)
Cost orientation
For the year ended 31 March 2012
Service
External Customer Sited Handover connections
0
0
External Customer Sited Handover rentals
0
0
External In Span Handover connections
0
0
External In Span Handover rentals
0
0
External 3rd Party POH Rental 64kbit/s
1
1
12,462 le
57.92
64.19
51.50
172.40
0.90
External 3rd Party POH Rental 2Mbit/s non CLZ
3
3
49,977 le
54.20
163.07
75.53
334.76
0.33
External 3rd Party POH Rental 2Mbit/s CLZ
0
0
3,688 le
71.30
176.62
73.75
343.37
0.40
External 3rd Party POH Rental 34/45Mbit/s
1
1
1,098 le
621.75
1,105.38
320.21
2,124.54
0.56
External 3rd Party POH Rental 155Mbit/s
0
0
123 le
2,309.11
1,324.41
760.20
2,752.68
1.74
Roundings
1
1
TOTAL
6
6
83 conns
376 lines
1 conns
497 lines
73
Return
on
MCE
(28.7)%
(24.8)%
Section 8 - Review of Other Wholesale Markets
Section 8.8 - Technical Areas (Point of Handover)(continued)
Detailed service analysis
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
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
For the year ended 31 March 2011
Service
External Customer Sited Handover connections
0
0
External Customer Sited Handover rentals
2
2
External In Span Handover connections
0
0
External In Span Handover rentals
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
(b)
53 conns
576 lines
2 conns
558 lines
See glossary for volume unit descriptors.
74
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-discrimination obligations
Wholesale broadband access market 1 - BT only operator
Summary
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
266
201
149
165
415
366
234
199
105
125
(1)
5
(9)
(6)
9
48
-
338
371
77
(5)
417
476
FAC (see Unaudited Unaudited
(D)LRIC
DSAC
App 1.2)
£
£
£
Average
price/FAC
Detailed service analysis
Non-discrim ination
Volume Unit (b)
Revenue
£m
Cost orientation
Average price
£
For the year ended 31 March 2012
Service
Internal End user access connections Mkt 1
EOI Internal End user access connections Mkt 1 - EOI
WBA Input
278,566 conns
12
41.31
39.79
4.99
44.78
39.79
4.64
44.43
39.79
13.82
53.61
0.92
41.31
39.79
4.99
44.78
39.79
4.64
44.43
39.79
13.82
53.61
0.92
External end user access connections Mkt 1
EOI External end user access connections Mkt 1 - EOI
WBA Input
107,078 conns
4
External Datastream End user access Rentals Mkt 1
EOI External Datastream End user access Rental Mkt 1 - EOI
WBA Input
0
3,578 rentals
89.30
29.59
52.71
82.30
29.59
43.63
73.22
29.59
110.22
139.81
1.09
106
1,332,433 rentals
79.30
30.47
62.55
93.02
30.47
51.57
82.04
30.47
124.48
154.95
0.85
68
872,707 rentals
78.13
31.82
62.81
94.63
31.82
51.77
83.59
31.82
124.74
156.56
0.83
1,022.21
8.22
369.41
377.63
8.22
242.31
250.53
8.22
2,461.88
2,470.10
2.71
7.14
36.25
43.39
7.14
314.24
321.38
1.89
8.65
36.34
44.99
8.65
313.37
322.02
1.88
Internal IPstream Connect End user access Rentals Mkt 1
EOI Internal IPstream Connect End user access Rentals Mkt 1 - EOI
WBA Input
External IPstream Connect End user access Rentals Mkt 1
EOI External IPstream Connect End user access Rentals Mkt 1- EOI
WBA Input
External Datastream Virtual Paths Mkt 1
EOI External Datastream Bandwidth Mkt 1 - EOI
WBA Input
2
2,380 vp
Internal IPstream Connect Bandwidth Mkt 1
EOI Internal IPstream Connect Bandwidth Mkt 1 - EOI
WBA Input
126
1,055,136 bandwidth
119.42
7.14
56.05
63.19
68
558,332 bandwidth
121.79
8.65
56.06
64.71
External IPstream Connect Bandwidth Mkt 1
EOI External IPstream Connect Bandwidth Mkt 1 - EOI
WBA Input
75
Return
on
MCE
18.3 %
(0.9)%
Section 8 - Review of Other Wholesale Markets
Section 8.9 - Wholesale Broadband Access: Market 1 (continued)
Detailed service analysis
Non-discrim ination
Volume Unit (b)
Revenue
£m
Cost orientation
Average price
£
FAC (see Unaudited Unaudited
(D)LRIC
DSAC
App 1.2)
£
£
£
Average
price/FAC
Internal Ancillary Charges and Other Mkt 1
EOI
WBA
0
22
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
External Ancillary Charges and Other Mkt 1
EOI
WBA
0
6
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
Roundings
TOTAL
1
415
76
Section 8 - Review of Other Wholesale Markets
Section 8.9 - Wholesale Broadband Access: Market 1 (continued)
Detailed service analysis
Non-discrim ination
Revenue
£m
Volume Unit (b)
Cost orientation
Average price
£
FAC (see Unaudited Unaudited
(D)LRIC
DSAC
App 1.2)
£
£
£
Average
price/FAC
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
89.30
26.76
54.79
81.55
26.76
42.74
69.50
26.76
83.62
110.38
1.09
31.11
62.78
31.11
112.35
78.71
31.11
77.73
108.84
93.89
143.46
0.72
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
131.98
0.00
124.36
124.36
0.00
80.57
80.57
0.00
472.38
472.38
1.06
134.37
0.00
138.23
138.23
0.00
89.83
89.83
0.00
561.76
561.76
0.97
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
Internal IPstream Connect End user access Rental Mkt 1
EOI
WBA Input
90
1,142,602 rentals
External IPstream Connect End user access Rental Mkt 1
EOI
WBA Input
73
930,410 rentals
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
External IPstream Connect Bandwidth Mkt 1
EOI
WBA Input
59
Internal Ancillary Charges and Other Mkt 1
EOI
WBA
0
11
External Ancillary Charges and Other Mkt 1
EOI
0
WBA
6
Roundings
TOTAL
442,579 bandwidth
366
(sx) This service comprises a number of individual prices.
(ux) This service comprises a number of individual volumetrics.
77
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(ux)
n/a
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
2012
2011
Internal
Revenue
£m
External
Revenue
£m
Revenue
£m
Operating
costs
£m
Depreciation
£m
Holding
(gain)/loss
£m
Supp.
Dep.
£m
Other
adjs.
£m
Roundings
£m
Total CCA
operating
costs
£m
Return
£m
MCE
£m
171
139
71
101
242
240
128
114
50
57
3
(5)
(3)
6
30
-
179
201
63
39
195
225
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
Average
price/FAC
Detailed service analysis
Non-discrrimination
Revenue
Volume Unit (b)
Cost orientation
Average price
£
£m
£
£
£
For the year ended 31 March 2012
Service
Internal End user access connections Mkt 2
EOI Internal End user access connections Mkt 2 - EOI
WBA Input
41.31
39.79
4.99
44.78
39.79
4.64
44.43
39.79
13.82
53.61
0.92
76,601 conns
41.31
39.79
4.99
44.78
39.79
4.64
44.43
39.79
13.82
53.61
0.92
0
2,192 rentals
89.30
29.59
91.37
120.96
29.59
75.38
104.97
29.59
171.83
201.42
0.74
58
734,282 rentals
79.62
30.38
57.42
87.80
30.38
47.36
77.74
30.38
116.36
146.74
0.91
29
367,648 rentals
78.71
31.87
57.46
89.33
31.87
47.39
79.26
31.87
116.31
148.18
0.88
1,022.21
8.99
284.50
293.49
8.99
196.18
205.17
8.99
1,733.51
1,742.50
3.48
8
205,455 conns
3
External end user access connections Mkt 2
EOI External end user access connections Mkt 2 - EOI
WBA Input
External Datastream End user access Rentals Mkt 2
EOI External Datastream End user access Rental Mkt 2 - EOI
WBA Input
Internal IPstream Connect End user access Rentals Mkt 2
EOI Internal IPstream Connect End user access Rentals Mkt 2 - EOI
WBA Input
External IPstream Connect End user access Rentals Mkt 2
EOI External IPstream Connect End user access Rentals Mkt 2 - EOI
WBA Input
External Datastream Virtual Paths Mkt 2
EOI External Datastream Bandwidth Mkt 2 - EOI
WBA Input
1
1,465 vp
Internal IPstream Connect Bandwidth Mkt 2
EOI Internal IPstream Connect Bandwidth Mkt 2 - EOI
WBA Input
68
523,810 bandwidth
129.71
8.69
49.47
58.16
8.69
32.95
41.64
8.69
255.95
264.64
2.23
30
226,968 bandwidth
131.24
9.78
47.80
57.58
9.78
32.05
41.83
9.78
242.01
251.79
2.28
External IPstream Connect Bandwidth Mkt 2
EOI External IPstream Connect Bandwidth Mkt 2- EOI
WBA Input
78
Return
on
MCE
32.1 %
17.7 %
Section 8 - Review of Other Wholesale Markets
Section 8.10 - Wholesale Broadband Access: Market 2 (continued)
Detailed service analysis
Non-discrrimination
Revenue
Volume Unit (b)
Cost orientation
Average price
£m
Internal Ancillary Charges and Other Mkt 2
EOI
WBA
0
36
External Ancillary Charges and Other Mkt 2
EOI
WBA
0
8
Roundings
TOTAL
FAC (see Unaudited Unaudited
App 1.2)
(D)LRIC
DSAC
Average
price/FAC
£
£
£
£
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
(ux)
(ux)
(ux)
n/a
n/a
1
242
79
Section 8 - Review of Other Wholesale Markets
Section 8.10 - Wholesale Broadband Access: Market 2 (continued)
Detailed service analysis
Non-discrrimination
Revenue
Volume Unit (b)
Cost orientation
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 End user access connection Mkt 2
EOI
WBA Input
8
211,423 conns
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
38.64
38.64
4.45
43.09
38.64
3.80
42.44
38.64
10.77
49.41
0.90
27.14
65.74
92.88
1.31
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
30.77
81.68
762,892 rentals
78.93
30.77
54.18
84.95
30.77
42.20
60
72.97
112.45
27.14
81.64
543,767 rentals
78.72
27.14
54.16
81.30
27.14
42.19
43
69.33
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
0.00
324.25
455,744 bandwidth
131.98
0.00
100.69
100.69
0.00
64.74
60
64.74
324.25
0.00
360.05
258,660 bandwidth
134.37
0.00
106.48
106.48
0.00
68.67
35
68.67
360.05
1.26
External IPstream Connect Bandwidth Mkt 2
EOI
WBA Input
Internal Ancillary Charges and Other Mkt 2
EOI
WBA
0
11
External Ancillary Charges and Other Mkt 2
EOI
0
WBA
4
Roundings
TOTAL
0.93
1.31
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(sx)
(sx)
(ux)
(ux)
(ux)
n/a
(ux)
(ux)
(ux)
n/a
240
(sx) This service comprises a number of individual prices.
(ux) This service comprises a number of individual volumetrics.
80
Section 9 - Reconciliation Statements
Section 9 - Reconciliation Statements
Section 9
Reconciliation Statements
81
Section 9 - Reconciliation Statements
Section 9.1 - BT Reconciliation Statements
Section 9.1.1 - BT Reconciliation Statement 2012 (Annex 19)
Consolidated Group Income Statement
For the year ended 31 March 2012
Return or
Operating Profit before
Revenue
Costs
taxation
£m
£m
£m
As in the Annual Report
18,897
16,346
2,445
Adjustments
Elimination of inter-market turnover and costs
Other Operating Income
Profits on disposal of property, plant and equipment
Share of post tax profits of associates and joint ventures
Net short term interest
Long term interest payable
Total BT Markets (HCA)
4,955
23,852
4,955
(239)
(129)
(10)
(190)
20,733
674
3,119
Holding (gain)/loss
Supplementary Depreciation
Other CCA adjustments
Adjustments
Total BT Markets (CCA) - Note 1
23,852
(12)
194
59
20,974
12
(194)
(59)
2,878
Note 1 - Agrees to Annex 3 Consolidated Performance Summary.
82
Section 9 - Reconciliation Statements
Section 9.1.2 - 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.
83
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 2012
2012
2011
£m
1,297
2,278
3,575
£m
1,925
2,518
4,443
Goodwill
(1,339)
(1,357)
Derivative financial instruments - assets
(1,022)
Shareholders’ funds as in the 2012 Annual Report
CCA adjustments
Adjustments
Deferred tax liabilities
1,100
Deferred tax assets
(626)
Current tax assets
(139)
Current tax liabilities
(626)
(461)
221
1,940
7,599
266
9,371
Derivative financial instruments - liabilities
832
296
Other payables
875
831
Minority interests
11
26
2,448
1,830
Closing CCA capital employed at 31 March
15,320
16,052
Opening CCA capital employed at 1 April
16,052
19,724
Total CCA mean capital employed
15,686
17,888
Retirement benefit obligations
Residual activities
Wholesale residual activity
Retail residual activity
1,212
66
Long term loans and other borrowings:
Due in less than one year
Due in more than one year
Markets
Access markets
Other Wholesale markets
Roundings and other adjustments
Wholesale markets
Retail markets & activities
Total CCA mean capital employed
84
2012
2011
£m
11,940
1,485
£m
12,439
1,755
13,425
14,194
1,869
392
1,875
1,819
2,261
3,694
-
-
-
-
15,686
17,888
Section 10 - Openreach Information
Section 10 - Openreach Information
Section 10
Openreach Information
85
Section 10 - Openreach Information
Section 10.1 - Openreach Income Statement 2012
Full service provision
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 loss/(gain)
Supplementary depreciation
Other adjustments
Roundings
Total CCA Operating Costs
Return
Return on mean capital employed
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
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
Wholesale ISDN2 exchange line
services
Openreach Services (by regulated market)
Wholesale analogue exchange
line services
For the year ended 31 March 2012
£m
£m
£m
£m
£m
£m
£m
£m
£m
1,568
73
175
0
1,816
445
2,261
‐ 2,261
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 555
61
130
759
1,505
280
1,785
268
478
377
96
2,123
134
305
759
3,321
725
4,046
1,219
165
123
173
244
13
128
0
10
6
4
8
11
1
11
0
0
9
6
15
23
1
20
0
1
97
46
81
95
5
70
0
4
277
179
277
373
20
229
0
15
12
32
57
113
4
21
0
7
289
211
334
486
24
250
0
22
15
433
39
76
563
2
14
4
4
24
2
12
19
8
41
21
114
8
61
204
40
573
70
149
832
2
67
58
88
215
42
640
128
237
1,047
21
101
182
94
398
63
741
310
331
1,445
1,419
65
116
602
2,202
461
2,663
1,154
3,817
26
191
(110)
‐ 1
5
(2)
‐ (3)
(1)
17
‐ 8
51
(33)
32
246
(128)
‐ ‐ (23)
(4)
96
‐ 9
242
(32)
‐ 249
73
154
262
11
180
0
(173)
(22)
(13)
78
‐ 268
478
377
1,881
5,265
538
284
488
748
35
430
0
(151)
(13)
229
46
‐ 1,526
69
129
628
2,352
530
2,882
1,197
4,079
597
65
176
131
969
195
1,164
22
1,186
8.6 %
26.7 %
73.6 %
6.2 %
10.2 %
86
14.3 %
10.7 %
0.9 %
8.9 %
Section 10 - Openreach Information
Section 10.2 - Openreach Income Statement 2011
Full service provision
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
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
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
Wholesale ISDN2 exchange line
services
Openreach Services (by regulated market)
Wholesale analogue exchange
line services
For the year ended 31 March 2011
£m
£m
£m
£m
£m
£m
£m
£m
£m
1,708
75
195
0
1,978
317
2,295
‐ 2,295
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 570
59
124
636
1,389
237
1,626
322
449
276
83
2,278
134
319
636
3,367
554
3,921
1,130
6
22
45
94
2
17
0
7
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
116
474
2,146
388
2,534
1,259
3,793
1
0
17
(15)
41
70
6
5
8
12
0
13
0
(1)
6
6
14
23
1
21
0
1
16
450
49
76
591
2
14
5
4
25
2
13
22
7
44
1,488
68
(2)
5
14
(62)
212
415
‐ ‐ ‐ 81
37
67
89
4
56
0
(6)
(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 %
87
4.5 %
5.2 %
214
79
131
263
8
191
0
(40)
5,051
250
183
284
427
18
234
0
(56)
157
135
195
303
13
144
0
(50)
256
205
329
521
20
251
0
(49)
322
449
276
1,709
25
(8)
210
‐ 1,486
(356)
(14.2)%
470
284
460
784
28
442
0
(89)
(34)
255
810
‐ 4,824
227
1.7 %
Section 10 - Openreach Information
Section 10.3 - Openreach MCE Statement 2012
For the year ended 31 March 2012
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
127
3,286
0
2,979
120
156
298
16
100
0
91
18
6
15
19
12
71
55
10
47
26
223
877
0
757
18
39
247
385
4,275
71
3,882
166
248
586
21
0
424
450
0
252
264
406
4,275
495
4,332
166
500
850
232
166
481
790
25
619
361
638
4,441
976
5,122
191
1,119
1,211
0
0
0
0
0
0
0
0
0
6,966
246
240
2,161
9,613
1,411
11,024
2,674
13,698
33
33
260
774
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
Inventories
Receivables
- Internal
- External
0
0
0
0
0
0
0
163
410
10
20
23
64
58
107
254
601
56
78
310
679
(50)
95
Total Current Assets
573
30
87
165
855
134
989
78
1,067
Payables falling due within one year
- Internal
- External
0
(512)
0
(25)
0
(78)
0
(173)
0
(788)
0
(166)
0
(954)
0
(295)
0
(1,249)
Total Payables falling due within one year
(512)
(25)
(78)
(173)
(788)
(166)
(954)
(295)
(1,249)
61
5
9
67
(32)
35
(217)
(182)
7,027
251
249
Net Current Assets/(Payables)
Total Assets less Current Payables
Provisions for liabilities and charges
(89)
(6)
(9)
(8)
2,153
(45)
9,680
(149)
1,379
(22)
11,059
(171)
2,457
(95)
13,516
(266)
Roundings
Mean capital employed
6,938
245
240
2,108
9,531
1,357
10,888
88
2,362
13,250
Section 10 - Openreach Information
Section 10.4 - 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
Inventories
Receivables
- 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
Payables 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 Payables 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/(Payables)
Total Assets less Current Payables
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
89
2,515
13,696
Section 10 - Openreach Information
Section 10.5 - Reconciliation of Openreach Income Statement 2012
For the year ended 31 March 2012
Notes
(per 10.7)
Operating Return or
Cost
Profit
before
taxation
£m
£m
Revenue
£m
5,136
As in the Annual report
Reconciliation differences:
Use of BT Operate assets
Northern Ireland (revenues and returns not included within Openreach)
Non-traded costs
Other trading differences
Total reconciliation differences
(b)
(c)
(e)
(d)
129
129
3,776
1,360
(171)
97
73
42
41
171
32
(73)
(42)
88
(262)
CCA adjustments
-
262
Adjustments
-
-
-
5,265
4,079
1,186
Regulatory entity (as per Section 10.1)
90
Section 10 - Openreach Information
Section 10.6 - 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 included in Openreach)
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)
91
(1,031)
Section 10 - Openreach Information
Section 10.7
10.7 -- Openreach
Openreach Notes
Notes
Section
1. Openreach Statements
As noted in Section 1.1 - Introduction: Regulation in the UK, on 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 2012 (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 31 July 2012, show how BT has disaggregated the SMP
definitions in order to produce the Openreach regulatory statement and reconciliation of the statement
to the Openreach financial information shown in BT Group plc’s Annual Report.
• 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
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 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 regulatory statement, separate columns are shown for each “Full Openreach
market” and the remaining “Part Openreach market” activities have been consolidated into a single
column.
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.
The Openreach Information includes comparative information for the year ended 31 March 2011
published on 15 September 2011 prepared in accordance with the Primary Accounting Documents
with the same date.
(c) Results relating to Northern Ireland’s operations
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 8.9% for the financial year 2011/12 and 1.7% for the financial year 2010/11 including non-SMP
activity and 10.2% in 2011/12 and 5.3% in 2010/11 excluding non-SMP results and Openreach
Ethernet services (AISBO market). Such returns are impacted significantly due to changes in the CCA
valuation and other accounting policies making it difficult to understand the underlying returns. To
allow comparison year on year on a more consistent basis, adjustments should be made for these items.
After making these adjustments to Openreach’s markets, for comparability purposes, the return is
£861m for 2011/12 and £935m for 2010/11 resulting in a ROCE of 9.3% and 9.7% respectively. The
adjustments are as follows:
92
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
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. They are included as a separate line to enable reconciliation between the accounts.
93
Appendix 1 - Other Information
Appendix 1 - Other Information
Appendix 1
Other Information
94
Appendix 1 - Other Information
Appendix 1.1 - Network Activity Statements (Annex 15)
Appendix 1.1.1 - Network Activity Statement - Consolidated 2012
Fully Allocated Cost (£m)
Footnotes
For the year ended 31 March 2012
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/s
Interconnect 2Mbit/s connection
Interconnect extension circuits (IEC) 2Mbit/s link
Customer Sited Interconnect cct (CSI) 2Mbit/s 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/s link per km distribution
PC rental 2Mbit/s link per km trunk
PC rental 34Mbit/s link per km distribution
PC rental 34Mbit/s link per km trunk
PC rental 140Mbit/s link per km distribution
PC rental 140Mbit/s link per km trunk
PC rental 622Mbit/s link per km trunk
Point of Handover electronics
PC rental 64kbit/s link
PC rental 2Mbit/s link
PC rental 34Mbit/s link
PC rental 140Mbit/s link
PC rental 64kbit/s link per km transmission
64kbit/s PC link connection cct provision
2Mbit/s and above PC link connection cct provision
PC rental 64kbit/s link local end
PC rental 34Mbit/s link local end
PC rental 140Mbit/s link local end
PC rental 2Mbit/s local end copper
PC rental 2Mbit/s local end fibre
Wholesale & LAN extension services electronics
Wholesale & LAN extension services fibre etc
Backhaul extension services electronics
Backhaul extension services fibre etc
Ethernet main links
SG & A private circuits
SG & A partial private circuits
National OA non chargeable
(c)
83
76
40
29
18
2
2
2
3
1
2
1
1
1
5
49
16
7
5
7
6
8
3
32
22
2
4
15
1
45
20
10
8
11
113
87
241
7
12
28
6
26
0
(3)
(2)
0
5
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(1)
(1)
0
0
2
0
0
0
(1)
(1)
0
(4)
0
(8)
0
(1)
6
0
0
0
5
4
0
(13)
0
1
0
0
0
0
0
0
0
0
0
(8)
(4)
(1)
(1)
(1)
(2)
(2)
0
0
0
0
0
(7)
0
0
0
3
1
0
30
0
75
0
5
(17)
0
0
0
85
78
40
21
18
3
2
2
3
1
2
1
1
1
5
41
12
6
4
6
4
6
3
31
21
2
4
10
1
45
20
12
8
11
139
87
308
7
16
17
6
26
0
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptors.
(c) Unit of length is 10 kilometres.
95
130
112
49
282
5
5
1
4
6
8
12
2
5
1
10
213
82
28
25
33
33
43
3
39
41
4
8
130
0
10
30
33
19
6
294
143
731
12
38
352
5
21
1
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
13
11
5
27
1
0
0
0
1
1
1
0
0
0
1
21
8
3
2
3
3
4
0
4
4
0
1
13
0
1
3
3
2
1
29
14
71
1
4
34
1
2
0
98
89
45
48
19
3
2
2
4
2
3
1
1
1
6
62
20
9
6
9
7
10
3
35
25
2
5
23
1
46
23
15
10
12
168
101
379
8
20
51
7
28
0
155,994
154,935
124,587
220,117
162,598
14,701
1,808
11,394
14,701
272,146
397,206
7,954
20,300
3,054
72,314
2,216,889
1,516,111
39,625
59,085
21,549
46,375
10,871
2,799,051
256,537
172,077
2,137
1,042
7,603,970
847
11,707
69,187
3,083
1,508
29,684
189,374
132,168
122,631
23,166
15,336
468,781
(a)
(a)
62,258
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
le
le
fibre km
mm
0.063p
0.057p
0.036p
0.022p
0.011p
£199.94
£1,275.73
£224.72
£232.37
£6.85
£6.86
£183.35
£45.73
£268.95
£88.90
£28.05
£13.51
£219.30
£110.68
£429.89
£169.50
£929.70
£0.94
£135.32
£147.42
£1,017.25
£4,416.47
£3.04
£1,956.94
£3,948.21
£332.82
£5,076.28
£6,898.44
£378.22
£885.79
£760.74
£3,080.30
£364.09
£1,360.28
£110.38
(a)
(a)
0.000p
Appendix 1 - Other Information
Appendix 1.1.1 - Network Activity Statement - Consolidated 2012 (continued)
Fully Allocated Cost (£m)
Footnotes
For the year ended 31 March 2012
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
Emergency OA (999) non chargeable
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
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
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 Centres - Provision
Sales product management
Service Centres - Assurance
Combi Card voice
Combi Card Broadband Access
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/s
ATM customer interface 34Mbit/s
11
3
16
229
0
131
60
608
191
66
47
3
337
109
3
136
19
0
6
56
185
2
12
22
50
9
3
28
123
22
45
4
111
0
5
0
0
32
19
58
5
11
0
2
0
0
0
0
0
23
0
192
0
0
0
0
38
0
0
(4)
(1)
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
(25)
0
0
0
0
(2)
(1)
(5)
0
0
0
0
0
0
0
0
0
(25)
0
(82)
0
0
0
0
(12)
0
0
7
1
0
0
0
0
0
0
0
0
(2)
0
0
0
0
0
1
50
0
(1)
0
0
11
5
0
(1)
0
0
0
11
3
16
229
0
129
60
718
191
66
47
3
363
109
3
139
19
0
6
56
185
2
12
22
50
8
3
28
123
22
45
5
136
0
4
0
0
41
23
53
4
11
0
2
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptors.
96
0
10
1
6
0
863
4
6,655
11
38
3
10
1,061
6
0
207
36
18
11
219
302
14
96
77
57
49
9
(8)
1
(24)
2
8
239
0
10
0
0
38
57
131
9
61
0
1
9.7
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
8.8
9.7
8.8
9.7
8.8
9.7
9.3
9.6
9.7
8.8
8.8
8.8
8.8
8.8
8.8
8.3
8.8
9.2
8.8
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
9.7
0
1
0
1
0
76
0
586
1
3
0
1
93
1
0
18
3
2
1
20
29
1
8
7
5
4
1
(1)
0
(2)
0
1
23
0
1
0
0
4
6
13
1
6
0
0
11
4
16
230
0
205
60
1,304
192
69
47
4
456
110
3
157
22
2
7
76
214
3
20
29
55
12
4
27
123
20
45
6
159
0
5
0
0
45
29
66
5
17
0
2
73,422
3,268,533
2,653,833
10,769,017
11,223,715
25,110,634
29,616,293
25,110,161
29,616,293
40,883,824
40,769,548
25,387,700
24,905,902
24,335,749
1,140,308
19,398,781
1,140,308
19,398,781
1,140,308
16,065,858
(a)
1,973,980
1,520
12,906
12,906
325,953
(a)
(a)
(a)
(a)
(a)
19,398,781
8,207,292
1,140,308
274,731
170,360
154,063
(a)
(a)
(a)
(a)
(a)
2,968
1,177
mm
trans
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
channels
mm
mm
mm
ports
ports
0.015p
£1.29
£6.10
£21.28
£0.00
£8.18
£2.04
£51.94
£6.48
£1.71
£1.17
£0.17
£18.33
£4.51
£2.35
£8.13
£20.47
£0.10
£5.89
£4.74
(a)
£1.78
£13,715.36
£2,258.91
£4,224.27
£39.20
(a)
(a)
(a)
(a)
(a)
£0.24
£19.31
£0.00
0.002p
0.000p
0.000p
(a)
(a)
(a)
(a)
(a)
£129.73
£1,473.64
Appendix 1 - Other Information
Appendix 1.1.1 - Network Activity Statement - Consolidated 2012 (continued)
Fully Allocated Cost (£m)
Footnotes
For the year ended 31 March 2012
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
Applicable
CCA mean
rate of return
capital employed on capital %
Total CCA
operating
costs
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
ATM customer interface > 155Mbit/s
ATM network interface
ATM network switching
Inter ATM transmissions
Broadband backhaul circuits (excl Virtual Paths)
21CN Backhaul Link & Length
Core/Metro (broadband)
Low Tisbo Equipment Depn
High Tisbo Equipment Depn
Very High Tisbo Equipment Depn
Low Tisbo Excess Construction
AISBO Excess Construction
SG&A Broadband
SG&A Interconnect
ISDN30 connections
ISDN30 access
ISDN30 line cards
Access Cards (ISDN30 services)
7
4
20
37
40
42
97
25
4
0
3
5
101
8
0
0
0
(2)
(1)
(3)
(8)
0
0
0
0
0
0
0
0
0
0
(7)
(6)
21
(1)
0
0
0
0
0
0
0
7
4
20
28
33
60
88
25
4
0
3
5
101
8
5
3
15
157
162
101
209
0
0
0
43
82
113
2
9.7
9.7
9.7
9.7
9.7
9.7
9.7
0.0
0.0
0.0
9.7
9.7
9.7
9.7
0
0
1
15
16
10
20
0
0
0
4
8
11
0
7
4
21
43
49
70
108
25
4
0
7
13
112
8
(n)
(n)
(n)
(n)
SMP Accounting Separation components
Residual components
Roundings
Total
16,565
11,434
4,454,508
1,318,728
(a)
22,352
7,671,109
(a)
(a)
(a)
(a)
(a)
(a)
(a)
ports
ports
usage
usage
circuits
circuits
£458.60
£335.65
£4.74
£33.53
(a)
£3,152.66
£14.16
(a)
(a)
(a)
(a)
(a)
(a)
(a)
(n)
(n)
(n)
(n)
103
2,119
4
6,455
(1)
14
116
213
21
137
n/a
n/a
4
4
2,127
889
83
2,210
n/a
n/a
(2)
3
5
3
3
8
n/a
n/a
48
6,697
15,294
1,399
8,096
194
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptors.
(n) Accounting Separation components require no costs to be disclosed.
97
Appendix 1 - Other Information
Appendix 1.1.2 - 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 costt 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
(c)
(h)
(h)
(h)
(h)
(h)
88
87
50
38
21
3
5
3
4
2
2
2
2
1
7
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
4
3
3
2
3
1
7
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
(a) This component is attributed on a % basis so no volume or unit cost is derivable.
(b) See glossary for volume unit descriptors.
(c) Unit of length is 10 kilometres.
(h) See Section 4 - Basis of Preparation for explanation of restatement.
98
152
139
52
332
9
6
1
5
7
8
12
2
8
1
12
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
1
1
1
1
0
1
0
1
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
4
5
4
4
2
4
1
8
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
1,391
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
0.062p
0.062p
0.042p
0.042p
0.013p
£243.54
£3,349.01
£296.53
£273.15
£9.78
£9.40
£287.96
£97.57
£357.40
£109.52
£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
Appenidix 1.1.2 - 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 costt 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
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 for explanation of restatement.
99
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)
0.001p
0.010p
£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 1.1.2 - Network Activity Statement - Consolidated 2011 (continued)
Footnotes
for the year ended 31 March 2011
Network Activity Statement - Consolidated (this is a consolidation of all markets where there are costt accounting obligations)
Fully Allocated Cost (£m) (h)
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
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
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
(n)
(n)
(n)
(n)
(n)
SMP Accounting Separation components
Residual components (h)
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
(a)
(a)
(a)
(a)
(a)
(a)
channels
mm
mm
mm
ports
ports
ports
ports
usage
usage
cables
circuits
misc
circuits
circuits
£0.01
0.001p
0.000p
0.000p
(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
(a)
(a)
(a)
(a)
(a)
(a)
(n)
(n)
(n)
(n)
(n)
0
16
138
293
32
170
n/a
n/a
2,412
122
(1)
70
2,481
683
74
2,555
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
(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 for explanation of restatement.
(n) Accounting Separation components require no costs to be disclosed.
100
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 2012
For the year ended 31 March 2012
£
£
Wholesale Access specific
£/trans
1.29
1.29
1.29
1.29
0.66
0.66
Routeing & records
£/line
6.10
6.09
6.09
6.09
4.67
4.67
6.09
MDF Hardware jumpering
£/line
21.28
21.34
21.34
21.34
10.87
10.87
30.57
Software jumpering
£/line
0.00
E side copper capital
£/line
8.18
8.18
8.18
8.18
8.18
0.64
4.10
£
£
£
£
£
£
4.10
25.45
£/line
2.04
2.04
2.04
2.45
2.45
1.75
1.75
2.54
£/line
51.94
51.94
51.94
51.95
51.95
26.04
26.04
51.90
D side copper current
£/line
6.48
6.48
6.48
7.78
7.78
5.56
5.55
8.08
1.17
Local exchanges general frames capital
£/line
1.71
1.71
1.71
1.71
1.71
0.43
0.43
3.41
1.71
1.17
Local exchanges general frames current
£/line
1.17
1.17
1.17
1.17
1.17
0.29
0.29
2.34
PSTN line test equipment
£/line
0.17
0.17
0.17
0.17
0.17
0.14
0.14
0.17
Dropwire capital & PSTN NTE
£/line
18.33
18.33
18.33
18.33
18.33
9.19
9.19
18.31
Residential PSTN drop maintenance
£/line
4.51
4.51
4.51
4.51
4.51
ISDN2 drop maintenance
£/channel
2.35
2.35
2.35
PSTN line cards
£/line
8.13
8.13
8.13
8.13
8.13
20.46
20.47
0.10
0.10
0.10
0.10
5.89
5.89
20.47
£/eq
0.10
£/channel
5.89
Broadband line testing systems
£/line
4.74
ADSL connections
£/conn
1.78
Local Loop Unbundling room build
£/room
13,715.36
Local Loop Unbundling hostel rentals
£/hostel rental
2,258.91
2,258.95
Local Loop Unbundling hostel rentals power & vent
£/hostel rental
4,224.27
4,224.35
Local Loop Unbundling tie cables
£/cable
Combi Card voice
£/line
0.24
Access Cards (ISDN2 services)
£/channel
0.00
19.97
0.16
3.04
MPF Ceases
MPF Buk Migrations
MPF Single Migrations
SMPF Ceases
SMPF Bulk Migrations
£
£
7.03
30.83
19.99
6.86
8.47
0.49
0.13
0.05
0.26
0.24
0.06
3.04
3.04
3.04
3.04
3.04
0.16
0.16
0.16
0.16
0.16
0.16
33.60
23.30
10.28
34.29
23.43
10.12
0.86
13,715.36
39.20
39.20
0.24
Service Centres - Assurance (q)
%
£45m
Sales product management (q)
%
£20m
0.10
0.10
0.10
Service Centres - Provision (q)
%
£123m
10.13
10.13
10.13
Directories (q)
%
£27m
Local Loop Unbundling systems development (q)
%
£4m
DSLAM capital/maintenance (q)
%
£214m
Fully Allocated Costs (£)
0.49
£
4.51
ISDN2 NTE
0.49
30.24
£
0.37
Pair gain
0.49
£
8.17
D side copper capital
£/channel
£
0.64
E side copper current
ISDN2 line cards
SMPF Single Migrations
£
SMPF Rentals
£
SMPF New Provides
£
MPF Tie Cables
£
MPF Hostel Rentals
£
Unit (d)
MPF Room Build
Wholesale ISDN2 external service
connections
£
Components
MPF Rentals
Wholesale ISDN2 internal service
connections
£
MPF New Provides
Wholesale premium analogue external
service rentals
£
Wholesale ISDN2 external service
transfers
Wholesale premium analogue internal
service rentals
£
Wholesale ISDN2 internal service
transfers
Wholesale basic analogue external
service rentals
£
Wholesale local access
Wholesale ISDN2 external service
rentals
Wholesale basic analogue internal
service rentals
£
Wholesale ISDN2 internal service rentals
Wholesale premium and basic analogue
external service connections
£
Wholesale ISDN2 exchange line services
Wholesale premium analogue internal
service connections
Fully Allocated Cost (£)
Wholesale basic analogue internal
service connections
Average cost per unit (from annex 15)
Wholesale analogue exchange line services
0.24
0.24
0.24
0.74
0.74
0.74
0.74
0.21
0.21
0.22
0.22
1.43
1.43
1.43
1.43
0.45
0.45
10.35
10.35
0.75
0.75
0.41
0.41
2.46
0.02
0.02
0.33
10.08
10.08
3.07
0.23
37.58
2.46
2.48
13.34
0.19
0.16
3.08
3.07
3.07
0.44
0.06
0.16
0.16
0.17
0.16
0.16
0.16
0.16
40.22
110.75
13,756.18
6,499.26
45.11
28.84
7.25
1.31
38.95
38.95
38.95
105.87
105.87
107.60
107.60
27.00
27.00
77.36
77.36
10.74
(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; £/ ho
ostel rental = £ per hostel rental; % = % utilisation;
£/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/chann
nel = £ per channel; £/fibre km = £ per fibre km.
(q) This is the total cost not unit cost for this component.
101
10.74
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
£
External Netstream 16 LL 2Mbit/s
connections
£
Radio Backhaul Service - 2 Mbit/s
connections
Partial and Private Circuits 2Mbit/s connections
£
Partial and Private Circuits 2Mbit/s - local
end
Radio Backhaul Service - sub 2 Mbit/s
connections
£
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
£
£
£
£
£
Unit (d)
PC rental 2Mbit/s link per km distribution
£/km
28.05
PC rental 64kbit/s link
£/link
135.32
PC rental 2Mbit/s link
£/link
28.19
135.58
146.61
147.42
PC rental 64kbit/s link per km transmission
£/km
64kbit/s PC link connection cct provision (y)
£/circuit
1,956.94
£/circuit
3,948.21
2Mbit/s and above PC link connection cct provision
£
Partial and Private Circuits 64kbit/s distribution
£
Components
Partial and Private Circuits 64kbit/s - link
Fully Allocated Cost (£)
Partial and Private Circuits 64kbit/s connections
Average cost per unit (from annex 15)
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
3.04
3.04
3.06
1,738.14
3,257.16
3,948.05
3,948.72 3,939.55
331.55
PC rental 64kbit/s link local end
£/le
332.82
PC rental 2Mbit/s local end copper
£/le
378.22
PC rental 2Mbit/s local end fibre
£/le
885.79
E side copper capital
£/line
8.18
8.20
E side copper current
£/line
2.04
2.05
0.18
D side copper capital
£/line
51.94
52.10
12.36
D side copper current
£/line
6.48
6.50
0.57
Local exchanges general frames capital
£/line
1.71
1.71
Edge Ethernet ports (q)
%
Core/Metro connectivity (q)
%
39.99
655.43
1.95
0.41
1.96
£5m
36.57
£66m
MSAN-METRO Connectivity Link (q)
%
£29m
50.03
(0.01)
SG & A partial private circuits (q)
%
£28m
21.40
5.70
0.07
0.18
22.01
21.11
72.79
17.11
2.06
27.89
77.78
25.80
SG & A private circuits (q)
%
£7m
5.32
1.43
0.02
0.05
5.25
4.94
17.81
4.21
0.51
6.86
18.23
6.65
1,764.86
142.71
3.13
3.29
429.37 3,283.21 4,038.65
256.49
30.75
Fully Allocated Costs (£)
745.64 4,044.73 3,972.00
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/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
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(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.
102
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
Components
£/km
13.51
PC rental 34Mbit/s link per km distribution
£/km
219.30
£/km
Partial and Private Circuits 140/155Mbit/s distribution
Partial and Private Circuits 140/155Mbit/s local end
£
£
£
£/km
429.89
PC rental 140Mbit/s link per km trunk
£/km
169.50
PC rental 622Mbit/s link per km trunk
£/km
929.70
PC rental 34Mbit/s link
£/link
1,017.25
£
£
£
£/link
13.59
219.30
110.19
429.94
167.39
929.70
1,017.21
4,327.44
4,416.47
3,947.26
3,948.85
2Mbit/s and above PC link connection cct provision
£/circuit
3,948.21
PC rental 34Mbit/s link local end
£/le
5,076.28
PC rental 140Mbit/s link local end
£/le
6,898.44
Edge Ethernet ports (q)
%
£5m
33.36
137.37
Core/Metro connectivity (q)
%
£66m
621.61
2,559.58
850.60
4,984.90
6,863.39
(0.22)
MSAN-METRO Connectivity Link (q)
%
£29m
Access Cards (other services) (q)
%
£45m
SG & A partial private circuits (q)
%
£28m
68.84
121.72
19.04
109.38
SG & A private circuits (q)
%
£7m
16.33
30.25
4.76
27.32
Fully Allocated Costs (£)
£
Partial and Private circuits 622Mbit/s trunk
Partial and Private Circuits 140/155Mbit/s link
£
Partial and Private circuits 140/155Mbit/s trunk
Partial and Private Circuits 140/155Mbit/s connections
£
Partial and Private circuits 34/45Mbit/s trunk
Partial and Private Circuits 34/45Mbit/s local end
£
Partial and Private circuits 2Mbit/s - trunk
Partial and Private Circuits 34/45Mbit/s distribution
£
110.68
PC rental 140Mbit/s link per km distribution
PC rental 140Mbit/s link
£
Wholesale trunk segments
Unit (d)
PC rental 2Mbit/s link per km trunk
PC rental 34Mbit/s link per km trunk
Partial and Private Circuits 34/45Mbit/s link
Fully Allocated Cost (£)
Partial and Private Circuits 34/45Mbit/s connections
Average cost per unit (from annex 15)
Traditional interface symmetric Traditional interface symmetric
broadband origination (above broadband origination (above
8Mbit/s up to and including
45Mbit/s up to and including
45Mbit/s)
155Mbit/s)
3,502.45
(0.92)
77.46
341.91
16.84
378.96
18.92
87.11
4.30
96.75
450.16 7,339.10
(0.22)
(0.92)
(4.07)
1.69
14.75
7.94
23.70
0.43
3.66
2.00
5.65
15.71
128.38
176.41
954.98
913.06
4,032.43 2,674.75
242.88 6,034.66 4,045.23 10,955.86
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/100m
m = £ per 100 metres; £/trans = £ per transa
action; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % utilisation;
£/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(q) This is the total cost not unit cost for this component.
103
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
ppm
Components
ppm
ppm
ppm
0.063
0.073
0.060
0.081
Local exchange processor
ppm
0.057
0.067
0.055
0.073
0.036
0.034
0.028
0.037
Remote - local transmission length
ppm (per 10km)
0.022
0.036
0.030
0.040
Product management policy & planning
ppm
0.011
National OA non chargeable
ppm
0.000
Emergency OA (999) non chargeable
ppm
0.015
0.015
0.015
0.015
Core/Metro (voice)
ppm
0.002
0.004
0.003
ppm
0.009
0.238
Border gateway & signalling firewall
ppm
0.000
MSAN-POSI Voice Link
ppm
0.000
iNode (call set up and features) (q)
%
£17m
Edge Ethernet ports (q)
%
£5m
Fully Allocated Costs (ppm)
ppm
ppm
ppm
ppm
Retail Sticks
ppm
Internal Wholesale call termination local
exchange stick (ISDN)
Internal Wholesale call termination local
exchange segment (ISDN)
Call Termination
basket
Wholesale call termination local
exchange segment
Internal Wholesale call origination local
exchange Stick (ISDN)
Internal Wholesale call origination local
exchange Stick
Internal and External Wholesale PPP
ppm
Retail Sticks
ppm
Unit (d)
Local exchange concentrator
Remote - local transmission link
PPP
Basket
Internal Wholesale call originating local
exchange segment (ISDN) (incl OA)
Internal and External Wholesale call
originating local exchange segment (incl
Operator Assistance)
Fully Allocated Cost (£)
Internal and External 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
Internal Wholesale call termination local
exchange stick
Call origination on fixed public narrowband networks
0.063
0.085
0.062
0.083
0.056
0.075
0.063
0.085
0.029
0.039
0.028
0.038
0.029
0.039
0.031
0.042
0.030
0.041
0.031
0.042
0.004
0.003
0.004
0.003
0.004
0.003
0.004
0.007
0.009
0.007
0.010
0.007
0.010
0.007
0.010
0.198
0.259
0.133
0.180
0.186
0.251
0.133
0.180
0.011
0.011
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/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 = £ p
per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(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 . Operator Assistance) due to immaterial volumes.
104
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
Technical areas (Interconnect Circuits)
Unit (d)
Interconnect local end rental 2Mbit/s
£/circuit
199.94
Interconnect 2Mbit/s connection
£/circuit
1,275.73
Interconnect extension circuits (IEC) 2Mbit/s link
£/circuit
224.72
Customer Sited Interconnect cct (CSI) 2Mbit/s link
£/circuit
232.37
Interconnect extension circuits (IEC) 2Mbit per km
£/km
£/km
In Span Interconnect circuits (ISI) transmission
£/100m
183.35
Nominated In Span I/Connect cct (ISI) transmission
£/100m
45.73
Intra Building Circuit (IBC) connection
£/circuit
268.95
Intra Building Circuit (IBC) rental
£/circuit
88.90
£
£
£
£
External 3rd Party POH Rentals 155Mbit/s
External 3rd Party POH Rentals 64kbit/s
£
External 3rd Party POH Rentals
34/45Mbit/s
£
External 3rd Party POH Rentals 2Mbit/s
CLZ
£
External 3rd Party POH Rentals 2Mbit/s
non CLZ
£
In Span Handover rentals
£
In Span Handover connections
£
Customer Sited Handover rentals
£
Customer Sited Handover connections
Internal Wholesale intra-building circuits
rentals
£
Internal Wholesale standard CSI rentals per km
£
Internal Wholesale standard CSI rentals fixed
£
External Wholesale rearrangements
External Nominated ISI - per km
£
External Wholesale ISI rentals
£
Internal Interconnect
199.94
£
199.94
1,293.81
211.00
854.02
224.72
232.37
232.37
6.85
6.85
Customer Sited Interconnect cct (CSI) 2Mbit per km
£
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
£
In Span Interconnect with
Interconnect Extension
Circuit (end to end circuit)
External Wholesale IEC connections
External Wholesale standard CSI rentals per km
£
Components
External Wholesale standard CSI rentals fixed
Fully Allocated Cost (£) (h)
External Wholesale standard CSI
connections
Average cost per unit (from annex 15)
Customer Sited Interconnect
(end to end circuit)
Technical Areas (Point of Handover)
6.86
6.86
6.86
183.35
45.73
268.95
268.95
88.90
268.95
88.90
88.90
88.90
Point of Handover electronics
£/eq
PC rental 64kbit/s link local end
£/le
332.82
0.94
PC rental 34Mbit/s link local end
£/le
5,076.28
PC rental 140Mbit/s link local end
£/le
6,898.44
PC rental 2Mbit/s local end copper
£/le
378.22
14.85
PC rental 2Mbit/s local end fibre
£/le
885.79
145.49
173.12
1,690.96 3,421.42
2,286.00
361.92
61.44
1,072.45
1,201.98
SG&A Interconnect (q)
%
£8m
SG & A partial private circuits (q)
%
£28m
106.59
47.17
74.00
22.81
2.24
2.25
2.87
27.46
102.12
SG & A private circuits (q)
%
£7m
25.43
11.26
18.00
5.44
0.51
0.48
0.63
5.47
20.31
103.60 1,822.98 3,479.85
2,378.00
390.17
64.19
163.07
Fully Allocated Costs (£)
283.44
1,846.20
189.39
710.60
3.61
10.47
153.31
633.26
92.73
406.35
3.61
10.46
127.95
396.90
14.70
103.60
10.88
183.35
56.61
65.35
919.37
174.68
606.99
(d) ppm = pence per minute; £/2Mbit cct = £ per 2Mbit/s circuit; £/km = £ per kilometre; £/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
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(q) This is the total cost not unit cost for this component.
105
3.61
10.47
14.70
176.62 1,105.38 1,324.41
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
Components
Unit (d)
Wholesale & LAN extension services electronics
Ethernet Access Direct 10Mbit/s rental Internal
Ethernet Access Direct 10Mbit/s rental External
Ethernet Access Direct 100Mbit/s rental Internal
Ethernet Access Direct 100Mbit/s rental External
Ethernet Access Direct 1000Mbit/s rental Internal
Ethernet Access Direct 1000Mbit/s rental External
Ethernet Access Direct 10Mbit/s
connection - Internal
Ethernet Access Direct 10Mbit/s
connection - External
Ethernet Access Direct 100Mbit/s
connection - Internal
Ethernet Access Direct 100Mbit/s
connection - External
Ethernet Access Direct 1000Mbit/s
connection - Internal
Ethernet Access Direct 1000Mbit/s
connection - External
£
£
£
£
£
£
£
£
£
£
£
£
£
£
356.70
368.93
981.76
722.29
722.29
722.29
916.05
21.56
20.68
24.44
23.52
38.08
38.10
170.29 2,275.32 2,662.14 2,375.19 2,550.97 3,107.54 3,177.75
340.58
340.58
340.58
340.58
340.58
340.58
£/le
760.74
Wholesale & LAN extension services fibre etc
£/le
3,080.30
Backhaul extension services electronics
£/le
364.09
966.82
Backhaul extension services fibre etc
£/le
1,360.28
1,583.22
Ethernet main links
£/fibre km
21CN Backhaul Link & Length
£/circuit
MSAN-METRO Connectivity Link (q)
%
£29m
Access Cards (other services) (q)
%
£45m
9.40
94.01
940.13
940.13
18.80
18.80
188.03
1,732.80 1,768.74 1,808.15
722.29
916.05
340.58
8,528.31
55.67
51.23
7.01
188.03 1,880.26 1,880.26
£45m
37.27
37.27
37.27
37.27
74.53
74.53
74.53
74.53
74.53
74.53
%
£20m
21.23
28.05
73.47
10.82
13.69
15.36
15.44
16.26
54.04
50.51
%
£123m
Fully Allocated Costs (£)
314.26
£
110.36
3,152.66
Service Centres - Provision (q)
%
£
110.38
Sales product management (q)
Service Centres - Assurance (q)
£
Main link rental charges
Backhaul extension services 1000Mbit/s
rentals external
£
Ethernet Backhaul Direct connections
external
Wholesale extension services 1000Mbit/s
rentals
£
Ethernet Backhaul Direct rentals extenal
Wholesale extension services 100Mbit/s
rentals
Fully Allocated Cost (£) (g)
Wholesale extension services 10Mbit/s
rentals
Average cost per unit (from annex 15)
Alternative interface symmetric broadband origination (up to and including 1Gbit/s)
74.53
8.47
8.29
10.59
10.38
20.53
21.07
1,210.26 1,210.26 1,210.26 1,210.26 1,210.26 1,210.26
24.55
14.10
2,157.40 2,297.00 3,840.78 3,708.55 3,104.63 3,493.12 3,375.48 3,552.08 6,032.42 6,099.10 1,580.87 1,579.81 1,585.87 1,584.74 1,609.45 1,610.01 8,941.65 1,620.61
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
hannel = £ per channel; £/fibre km = £ per fibre km.
£/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/ch
(g) See Section 4.2.1 for improved disclosure of services in the AISBO market.
(q) This is the total cost not unit cost for this component.
106
1.06
1,210.26
169.66
Appendix 1 - Other Information
Appendix 1.2.1 - Calculation of FAC based on component costs and usage factors 2012 (continued)
For the year ended 31 March 2012
Components
£
£
£
£
£
£
External IPstream Connect Bandwidth
Mkt 2
£
Internal IPstream Connect Bandwidth
Mkt 2
External IPstream Connect End user
access Rentals Mkt 2
£
External Datastream Virtual Paths Mkt 2
Internal IPstream Connect End user
access Rentals Mkt 2
£
External Datastream End user access
Rentals Mkt 2
£
External end user access connections
Mkt 2
£
Internal End user access connections Mkt
2
External IPstream Connect End user
access Rentals Mkt 1
£
External IPstream Connect Bandwidth
Mkt 1
Internal IPstream Connect End user
access Rentals Mkt 1
£
Wholesale broadband access market 2 - 2 to 3 principal
operators
Internal IPstream Connect Bandwidth
Mkt 1
External Datastream End user access
Rentals Mkt 1
£
External Datastream Virtual Paths Mkt 1
External end user access connections
Mkt 1
Fully Allocated Cost (£)
Internal End user access connections Mkt
1
Average cost per unit (from annex 15)
Wholesale broadband access market 1 - BT only operator
£
£
Unit (d)
Broadband line testing systems
£/line
4.74
ADSL connections
£/conn
1.78
Combi Card Broadband Access
£/line
19.31
ATM customer interface 2Mbit/s
£/port
129.73
ATM customer interface 34Mbit/s
£/port
1,473.64
0.46
0.13
0.13
ATM customer interface > 155Mbit/s
£/port
458.60
12.77
1.71
1.70
ATM network interface
£/port
335.65
7.39
0.56
0.56
6.50
0.65
0.60
ATM network switching
£/use
4.74
27.87
3.80
3.77
21.56
2.85
2.63
2.12
1.79
2.05
2.04
1.79
1.79
19.31
19.31
19.31
0.01
0.02
2.12
2.05
2.04
19.31
19.31
19.31
1.79
0.02
9.89
0.09
0.08
1.29
1.19
Inter ATM transmissions
£/use
33.53
83.78
8.99
8.93
70.86
9.62
8.89
Core/Metro (broadband)
£/circuit
14.16
13.53
13.53
13.53
13.53
13.53
13.53
SG&A Broadband (q)
%
£112m
94.33
11.02
11.24
94.33
11.97
12.11
Broadband backhaul circuits (excl Virtual Paths) (q)
%
£49m
128.82
15.83
15.73
67.39
9.02
8.33
Edge Ethernet ports (q)
%
£5m
0.51
0.51
0.51
0.51
0.51
0.51
DSLAM capital/maintenance (q)
%
£214m
EOI Notional Creditors (ap)
Fully Allocated Costs (£)
3.50
3.50
7.58
6.73
6.63
3.50
3.50
7.58
6.76
6.68
23.92
34.69
35.07
62.58
29.53
29.67
(0.30)
(0.30)
(0.22)
(0.23)
(0.24)
(0.06)
(0.05)
(0.06)
(0.30)
(0.30)
(0.22)
(0.23)
(0.24)
(0.07)
(0.06)
(0.07)
4.99
4.99
52.71
62.55
62.81
369.41
56.05
56.06
4.99
4.99
91.37
57.42
57.46
284.50
49.47
47.80
(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 ren
ntal = £ per hostel rental; % = % utilisation;
p equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
£/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq = £ per
(ap) Reduction in FAC due to notional creditor generated by the EOI charge from Openreach to WBA
W
markets
107
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011
For the year ended 31 March 2011
Components
Wholesale Access specific
£
£
£
£
£
£
£
£/trans
1.47
1.47
1.47
1.47
1.47
1.47
0.73
0.73
0.73
£
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
MPF Single Migrations
SMPF Ceases
£
£
£
£
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
0.73
£/line
6.74
6.73
6.73
6.73
5.15
5.19
6.76
MDF Hardware jumpering
£/line
24.22
24.22
24.22
24.22
12.11
12.11
34.70
0.33
0.33
0.33
0.16
0.16
0.33
0.16
0.16
0.33
Software jumpering
£/line
0.33
E side copper capital
£/line
10.83
10.75
10.75
10.75
10.75
5.41
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
£/conn
2.29
Local Loop Unbundling room build
£/room
56.14
Local Loop Unbundling hostel rentals
£/hostel rental
2,564.75
Local Loop Unbundling hostel rentals power & vent
£/hostel rental
3,477.28
Local Loop Unbundling tie cables
£/cable
Combi Card voice
£/line
£/channel
19.17
3.31
3.32
0.19
56.14
2,564.75
3,477.28
496.95
496.95
0.84
0.84
0.84
0.84
0.84
0.01
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)
%
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 (£)
0.36
4.45
23.77
ADSL connections
Access Cards (ISDN2 services)
SMPF Bulk Migrations
£
Unit (d)
Routeing & records
Dropwire capital & PSTN NTE
SMPF Single Migrations
SMPF Rentals
£
SMPF New Provides
£
MPF Tie Cables
£
MPF Hostel Rentals
£
MPF Room Build
£
MPF Rentals
Wholesale ISDN2 external
service transfers
£
MPF New Provides
Wholesale ISDN2 internal
service transfers
£
Wholesale ISDN2 external
service rentals
£
Wholesale ISDN2 internal
service rentals
£
Wholesale ISDN2 external
service connections
£
Wholesale local access
Wholesale ISDN2 internal
service connections
£
Wholesale premium and basic
analogue external service
transfers
Wholesale premium analogue
external service rentals
£
Wholesale ISDN2 exchange line services
Wholesale premium and basic
analogue internal service
transfers
Wholesale premium analogue
internal service rentals
£
Wholesale basic analogue
external service rentals
£
Wholesale basic analogue
internal service rentals
£
Wholesale premium and basic
analogue external service
connections
Wholesale premium analogue
internal service connections
Fully Allocated Cost (£)
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
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
94.39
(d) ppm = pence per minute; £/2Mbit cct = £ per 2 Mbit/s circuit; £/km = £ per kilom
metre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % utilisation;
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link
k; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(q) This is the total cost not unit cost for this component.
108
8.88
8.89
43.99
128.75
177.55 6,061.49
500.04
31.59
10.28
Appendix 1 - Other Information
Appendix 1.2.2 - 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 distribution
£/km
Partial and Private Circuits
64Kbit/s - link
Partial and Private Circuits
64Kbit/s - distribution
Partial and Private Circuits
64Kbit/s - trunk
Partial and Private Circuits
64Kbit/s - local end
Radio Backhaul Service sub 2 Mbit/s connections
Partial and Private Circuits
2Mbit/s - connections
Partial and Private Circuits
2Mbit/s - link
Partial and Private Circuits
2Mbit/s - distribution
Partial and Private Circuits
2Mbit/s - local end
Radio Backhaul Service - 2
Mbit/s connections
External Netstream 16 LL
2Mbit/s connections
Fully Allocated Cost (£)
Partial and Private Circuits
64Kbit/s - connections
Average cost per unit (from
annex 15)
Traditional interface symmetric broadband origination (up to and including 8Mbit/s)
£
£
£
£
£
£
£
£
£
£
£
£
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
45.32
160.16
148.06
5.95
5.97
1,646.50
1,646.50
64Kbit PC link connection cct provision (y)
£/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
1,581.57 81,185.00
234.86
0.51
Routeing & records
£/line
6.74
MDF Hardware jumpering
£/line
24.22
Software jumpering
£/line
0.33
E side copper capital
£/line
10.83
10.83
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
Local exchanges general frames capital
£/line
1.25
1.25
0.29
Local exchanges general frames current
£/line
1.30
Dropwire capital & PSTN NTE
£/line
19.17
Residential PSTN drop maintenance
£/line
Broadband line testing systems
£/line
2.92
Combi Card broadband
£/line
20.48
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
98.15
21.98
2.19
23.55
33.31
11.52
1.20
18.79
356.60 1,697.47 1,717.79
259.18
48.83
4.45
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
SG & A private circuits (q)
%
£20m
6.63
5.43
0.05
0.09
19.52
Netstream equipment (q)
%
£8m
PPC support services (q)
%
£6m
1,663.04
170.57
6.06
6.17
Fully Allocated Costs (£)
2.55
50.97
129.93
176.69
758.10 1,711.50 81,361.69
etre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = %
(d) ppm = pence per minute; £/2Mbit cct = £ per 2 Mbit/s circuit; £/km = £ per kilome
(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 fib
(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.
109
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 (continued)
For the year ended 31 March 2011
£
Partial and Private
Circuits 140/155Mbit/s local end
Partial and Private
Circuits 140/155Mbit/s distribution
Partial and Private
Circuits 140/155Mbit/s link
£
£
Partial and Private
circuits 622Mbit/s - trunk
£
Partial and Private
circuits 140/155Mbit/s trunk
£
Partial and Private
Circuits 140/155Mbit/s connections
Partial and Private
Circuits 34/45Mbit/s local end
Partial and Private
Circuits 34/45Mbit/s distribution
£
Wholesale trunk segments
Partial and Private
circuits 34/45Mbit/s trunk
£
Traditional interface symmetric
broadband origination (above
45Mbit/s up to and including
155Mbit/s)
Partial and Private
circuits 2Mbit/s - trunk
£
Components
Partial and Private
Circuits 34/45Mbit/s - link
Fully Allocated Cost (£)
Partial and Private
Circuits 34/45Mbit/s connections
Average cost per unit
(from annex 15)
Traditional interface symmetric
broadband origination (above
8Mbit/s up to and including
45Mbit/s)
£
£
£
£
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
22.69
360.31
211.53
537.84
242.45
PC rental 140Mbit link
£/link
3,103.45
2Mbit and above PC link connection cct provision
£/circuit
1,583.41
PC rental 34Mbit link local end
242.45
1,231.29
1,047.11
3,012.76
1,585.37
1,587.35
£/le
4,928.11
PC rental 140Mbit link local end
£/le
10,219.28
Very High Tisbo Equipment Depn (q)
%
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
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
Netstream equipment (q)
%
£8m
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 (£)
4,837.70
10,155.95
636.19
4,165.40
0.12
631.16
0.12
0.02
0.12
0.12
0.12
1,327.29
£/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % utilisation;
k
(d) ppm = pence per minute; £/2Mbit cct = £ per 2 Mbit/s circuit; £/km = £ per kilometre;
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ perr link; £/eq = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(q) This is the total cost not unit cost for this component.
110
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 (continued)
For the year ended 31 March 2011
Call origination on fixed public narrowband
networks
0.059
0.080
0.059
0.084
0.060
0.059
0.084
0.071
0.060
0.081
0.061
0.082
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
National OA non chargeable
ppm
0.001
Emergency OA (999) non chargeable
ppm
0.010
0.008
0.012
0.009
0.012
0.008
0.012
0.162
0.191
0.225
0.271
0.162
0.191
0.001
0.000
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
ppm
Internal Wholesale call termination
local exchange stick (ISDN)
0.071
0.062
ppm
ppm
ppm
Internal Wholesale call termination
local exchange stick
0.062
ppm
Remote - local transmission link
ppm
ppm
Internal Wholesale call termination
local exchange segment (ISDN)
ppm
Local exchange processor
ppm
ppm
Wholesale call termination local
exchange segment
Internal Wholesale call origination
local exchange Stick (ISDN)
Local exchange concentrator
MSAN-POSI Voice Link
ppm
Retail Sticks
Unit (d)
Border gateway & signalling firewall
ppm
Fixed call termination
Call Termination
basket
Components
Core/Metro (voice)
ppm
Retail Sticks
Internal Wholesale call origination
local exchange Stick
ppm
PPP
Basket
Internal and External Wholesale
PPP
ppm
Internal Wholesale call originating
local exchange segment (ISDN)
(incl OA)
Internal and External Wholesale
call originating local exchange
segment (incl Operator Assistance)
Fully Allocated Cost (£)
Internal and External Wholesale
call originating local exchange
segment PSTN and ISDN (excl OA)
Average cost per unit (from annex
15)
Call Origination Basket (ad)
ppm
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
(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 hostel rental; % = % 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 = £ per fibre km.
(q) This is the total cost not unit cost for this component.
(ad) Does not include the service Wholesale Call originating local exchange
e segment (ISDN) (excl. Operator Assistance) due to immaterial volumes.
111
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 (continued)
Restated for the year ended 31 March 2011
Technical areas (Interconnect Circuits) (h)
Components
Unit (d)
Interconnect local end rental 2Mbit
£/circuit
243.54
Interconnect 2Mbit connection
£/circuit
3,349.01
Interconnect extension circuits (IEC) 2Mbit link
£/circuit
296.53
Customer Sited Interconnect cct (CSI) 2Mbit link
£/circuit
273.15
Interconnect extension circuits (IEC) 2Mbit per km
£/km
Customer Sited Interconnect cct (CSI) 2Mbit per km
£/km
In Span Interconnect circuits (ISI) transmission
£/100m
External Wholesale intrabuilding circuits rentals
External Wholesale ISI
rentals
External Nominated ISI - per
km
External Wholesale
rearrangements
Internal Wholesale standard
CSI rentals - fixed
Internal Wholesale standard
CSI rentals - per km
Internal Wholesale intrabuilding circuits rentals
Customer Sited Handover
connections
Customer Sited Handover
rentals
In Span Handover
connections
£
£
£
£
£
£
£
£
£
£
£
£
243.54
352.93
£/100m
97.57
357.40
Intra Building Circuit (IBC) rental
£/circuit
£
£
£
1,362.27
273.15
273.15
9.78
9.40
9.40
£/circuit
£
296.53
9.40
287.96
287.96
Intra Building Circuit (IBC) connection
£
243.54
2,164.09
9.78
Nominated In Span I/Connect cct (ISI) transmission
£
External 3rd Party POH
Rentals 155Mbit/s
External Wholesale intrabuilding circuits connections
£
External 3rd Party POH
Rentals 34/45Mbit/s
External Wholesale IEC
rentals - per km
£
External 3rd Party POH
Rentals 2Mbit/s CLZ
External Wholesale IEC
rentals - fixed
£
External 3rd Party POH
Rentals 2Mbit/s non CLZ
External Wholesale IEC
connections
£
External 3rd Party POH
Rentals 64kbit/s
External Wholesale standard
CSI rentals - per km
£
In Span Handover rentals
External Wholesale standard
CSI rentals - fixed
Fully Allocated Cost (£) (h)
Internal Interconnect
External Wholesale standard
CSI connections
Average cost per unit (from
annex 15)
Customer Sited
Interconnect (end to end
circuit)
Technical Areas (Point of Handover)
Interconnect Specific Basket
In Span Interconnect with
Interconnect Extension
In span Interconnect
Circuit (end to end circuit)
97.57
357.40
357.40
109.50
109.52
357.40
109.50
109.50
109.56
Point of Handover electronics
£/eq
PC rental 64Kbit link local end
£/le
235.39
0.97
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
E side copper capital
£/line
5.20
5.85
6.94
21.97
41.02
62.81
208.04
219.78
1,434.63
2,439.61
3,604.06
1,215.00
2,862.35
57.61
1,412.66
2,398.59
10.83
E side copper current
£/line
1.98
D side copper capital
£/line
75.05
D side copper current
£/line
5.71
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 (£)
1,818.96
1.25
43.57
180.87
2,745.93
362.11
9.01
0.12
120.85
2.30
756.05
141.64
9.01
97.83
11.82 1,170.27
9.38
81.65
19.66
0.91
444.08
10.69
9.38
2.74
580.69
118.88
9.01
0.12
44.01
0.91
3.70
61.96
84.72
78.50
178.94
569.71
10.43
113.26
1,880.92
3,688.78
1,293.50
3,041.29
41.70
287.96
100.31 1,403.97
(d) ppm = pence per minute; £/2Mbit cct = £ per 2 Mbit/s circuit; £/km = £ per killometre; £/100m = £ per 100 metres; £/trans = £ per transaction; £/circuit = £ per circuit; £/ hostel rental = £ per hostel rental; % = % 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 = £ per fibre km.
(h) See Section 4 - Basis of Preparation for explanation of restatement.
(q) This is the total cost not unit cost for this component.
112
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 (continued)
For the year ended 31 March 2011
£
£
Wholesale & LAN extension services electronics
£/le
381.37
Wholesale & LAN extension services fibre etc
£/le
2,778.28
Backhaul extension services electronics
£/le
378.94
882.49
Backhaul extension services fibre etc
£/le
1,918.77
1,924.55
374.31
912.92
2,037.08 2,055.18
337.69
2,094.76
8.28
9.90
£/fibre km
£/circuit
AISBO Excess Construction (q)
MSAN‐METRO Connectivity Link (q)
%
£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
%
£
Ethernet Access Direct
rentals
£
27.52
234.90
MSAN-BRAS Broadband Link
Fully Allocated Costs (£)
£
24.79
Ethernet main links
Service Centres - Provision (q)
£
Ethernet Access Direct
connections
£
Unit (d)
Main link rental charges
£
Components
Ethernet Backhaul Direct
rentals external
£
Ethernet Backhaul Direct
connections external
£
Backhaul extension services
1000Mbit/s rentals external
Wholesale extension
services 10Mbit/s connections
£
Wholesale extension
services 1000Mbit/s
connections
Wholesale extension
services 1000Mbit/s rentals
£
Wholesale extension
services 100Mbit/s
connections
Wholesale extension
services 100Mbit/s rentals
Fully Allocated Cost (£)
Wholesale extension
services 10Mbit/s rentals
Average cost per unit (from
annex 15)
Alternative interface symmetric broadband origination (up to and including 1Gbit/s)
77.87
469.80
3,343.51
45.60
101.44
230.30
230.30
32.97
14,021.90
92.57
£98m
2,475.73 2,581.97
3,739.03
183.41
72.03
14.25
17.04
42.80
782.69
782.69
782.69
9.80
1,160.52
9.59
21.33
805.22
809.63
850.28 3,631.57
1,215.71 14,216.70
72.03
0.94
6.29
401.68
1,617.25
(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 hostel rental; % = % utilisation;
q = £ per equipment units; £/le = £ per local end; £/conn = £ per connection; £/channel = £ per channel; £/fibre km = £ per fibre km.
(d2) £/line = £ per line; £/room = £ per room; £/cable = £ per cable; £/link = £ per link; £/eq
(q) This is the total cost not unit cost for this component.
113
12.09
1,113.64
3,611.04
Appendix 1 - Other Information
Appendix 1.2.2 - Calculation of FAC based on component costs and usage factors 2011 (continued)
For the year ended 31 March 2011
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
2.92
ADSL connections
£/conn
2.29
Combi Card broadband
£/line
2.51
1.84
2.40
2.40
1.84
1.84
20.48
20.48
20.48
£
2.51
2.40
2.40
20.48
20.48
20.48
£
External IPstream
Connect Bandwidth
Mkt 2
£
External Datastream
Virtual Paths Mkt 2
£
Internal IPstream
Connect Bandwidth
Mkt 2
£
External IPstream
Connect End user
access Rentals Mkt 2
£
Internal IPstream
Connect End user
access Rentals Mkt 2
£
External user access
connections Mkt 2
£
External Datastream
End user access
Rentals Mkt 2
£
Internal End user
access connections
Mkt 2
£
External IPstream
Connect Bandwidth
Mkt 1
£
Wholesale broadband access market 2 - 2 to 3 principal
operators
Internal IPstream
Connect Bandwidth
Mkt 1
External IPstream
Connect End user
access Rentals Mkt 1
£
External Datastream
Virtual Paths Mkt 1
Internal IPstream
Connect End user
access Rentals Mkt 1
£
External Datastream
End user access
Rentals Mkt 1
£
Components
External user access
connections Mkt 1
Fully Allocated Cost (£)
Internal End user
access connections
Mkt 1
Average cost per unit
(from annex 15)
Wholesale broadband access market 1 - BT only operator
£
£
1.84
20.48
ATM customer interface 2Mbit
£/port
160.14
0.04
0.05
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
10.73
1.72
ATM network interface
£/port
490.19
7.67
0.98
1.24
8.58
0.87
1.10
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
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
Edge Ethernet ports (q)
%
£18m
2.57
2.57
2.57
2.57
2.57
2.57
Service Centres - Assurance (q)
%
£49m
Sales product management (q)
%
£25m
Service Centres - Provision (q)
%
£98m
Local Loop Unbundling systems development (q)
%
£2m
SG & A other access (q)
%
£82m
95.11
10.24
10.42
95.11
10.24
10.42
DSLAM capital/maintenance (q)
%
£307m
370.27
100.69
106.48
Fully Allocated Costs (£)
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
stel rental = £ per hostel rental; % = % utilisation;
(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; £/ hos
(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.
(q) This is the total cost not unit cost for this component.
114
2.16
Appendix 1 - Other Information
Appendix 1.3 - BT Network Services Reconciliation (Annex 17)
Appendix 1.3.1 - BT Network Services Reconciliation 2012
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 ISDN2 exchange line services
Total (from annex 15)
Fully Allocated Cost (£m)
Wholesale analogue exchange line services
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Components
Local exchange concentrator
98
48
50
Local exchange processor
88
42
45
Remote - local transmission link
45
22
22
Remote - local transmission length
48
24
24
Product management policy & planning
19
18
1
1
1
Interconnect local end rental 2Mbit/s
2
Interconnect 2Mbit/s connection
2
2
Interconnect extension circuits (IEC) 2Mbit/s link
2
3
Customer Sited Interconnect cct (CSI) 2Mbit/s link
4
3
Interconnect extension circuits (IEC) 2Mbit per km
2
2
-
Customer Sited Interconnect cct (CSI) 2Mbit per km
3
3
-
In Span Interconnect circuits (ISI) transmission
1
1
-
Nominated In Span I/Connect cct (ISI) transmission
1
1
-
Intra Building Circuit (IBC) connection
1
1
-
Intra Building Circuit (IBC) rental
6
6
-
3
PC rental 2Mbit/s link per km distribution
62
62
PC rental 2Mbit/s link per km trunk
20
5
9
6
PC rental 140Mbit/s link per km distribution
9
8
PC rental 140Mbit/s link per km trunk
7
0
PC rental 622Mbit/s link per km trunk
10
-
6
-
7
-
1
10
1
PC rental 64kbit/s link
35
35
PC rental 2Mbit/s link
25
25
PC rental 34Mbit/s link
2
PC rental 140Mbit/s link
5
64kbit/s PC link connection cct provision
1
9
3
23
(1)
-
PC rental 34Mbit/s link per km trunk
PC rental 64kbit/s link per km transmission
-
15
PC rental 34Mbit/s link per km distribution
Point of Handover electronics
(1)
2
-
2
4
1
23
1
1
2Mbit/s and above PC link connection cct provision
46
46
PC rental 64kbit/s link local end
23
22
PC rental 34Mbit/s link local end
15
PC rental 140Mbit/s link local end
10
PC rental 2Mbit/s local end copper
0
0
-
14
10
1
-
1
-
0
-
12
10
1
PC rental 2Mbit/s local end fibre
168
160
8
Wholesale & LAN extension services electronics
101
80
Wholesale & LAN extension services fibre etc
379
369
8
8
Backhaul extension services electronics
115
1
21
10
-
Appendix 1 - Other Information
Appendix 1.3.1 - Network Services Reconciliation 2012 (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 ISDN2 exchange line services
Wholesale analogue exchange line services
Fully Allocated Cost (£m)
Total (from annex 15)
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
Components
Backhaul extension services fibre etc
Ethernet main links
SG & A private circuits
SG & A partial private circuits
National OA non chargeable
Emergency OA (999) non chargeable
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
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
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 Centres - Provision
Sales product management
Service Centres - Assurance
Combi Card voice
Combi Card Broadband Access
20
51
7
28
11
4
16
230
205
60
1,304
192
69
47
4
456
110
3
157
22
2
7
76
214
3
20
29
55
12
4
27
123
20
45
6
159
21
50
5
21
0
1
0
2
1
3
(1)
1
1
1
0
0
0
11
4
9
30
0
159
42
1008
132
33
23
3
356
88
0
0
1
0
5
2
30
6
0
0
0
10
7
103
0
40
14
256
43
22
15
1
90
22
0
0
0
1
0
6
1
0
0
44
4
0
21
29
55
13
2
0
0
16
3
14
0
0
0
0
3
158
23
2
7
10
28
32
4
14
5
2
1
1
50
6
9
0
116
5
77
1
3
33
1
0
0
43
25
96
2
4
10
14
9
(1)
(1)
14
100
1
(1)
(1)
2
(1)
23
6
7
1
91
Appendix 1 - Other Information
Appendix 1.3.1 - Network Services Reconciliation 2012 (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 ISDN2 exchange line services
Total (from annex 15)
Fully Allocated Cost (£m)
Wholesale analogue exchange line services
Consolidation Statement (a summary of all wholesale markets where there are cost accounting obligations)
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/s
ATM customer interface 34Mbit/s
ATM customer interface > 155Mbit/s
ATM network interface
ATM network switching
Inter ATM transmissions
Broadband backhaul circuits (excl Virtual Paths)
21CN Backhaul Link & Length
Core/Metro (broadband)
Low Tisbo Equipment Depn
High Tisbo Equipment Depn
Very High Tisbo Equipment Depn
Low Tisbo Excess Construction
AISBO Excess Construction
SG&A Broadband
SG&A Interconnect
0
5
0
0
45
29
66
5
17
0
2
7
4
21
43
49
70
108
25
4
0
7
13
112
8
SMP Accounting Separation components
Residual components
Roundings
137
2,208
12
TOTAL
8,096
0
2
0
0
9
6
0
3
2
1
0
3
2
0
2
0
0
1
37
3
0
0
6
0
6
1
1
0
0
3
1
6
15
26
0
1
1
2
7
7
23
14
36
21
5
12
57
3
5
2
3
2
13
21
16
57
71
55
-
13
25
4
0
7
13
8
137
2,208
117
Appendix 1 - Other Information
Appendix 1.3.2 - BT Network Services Reconciliation 2011
Non cost accounting, roundings and
residual (h)
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)(h)
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 ISDN2 exchange line
services
Total (from annex 15)
Fully Allocated Cost (£m) (h)
Wholesale analogue exchange line
services
Consolidation Statement (a summary of all wholesale markets where
e there are cost accounting obligations)
Components
Local exchange concentrator
109
52
56
1
Local exchange processor
107
50
55
2
1
Remote - local transmission link
Remote - local transmission length
Product management policy & planning
61
29
31
107
51
56
22
22
Interconnect local end rental 2Mbit
4
4
Interconnect 2Mbit connection
5
5
Interconnect extension circuits (IEC) 2Mbit link
4
4
Customer Sited Interconnect cct (CSI) 2Mbit link
5
4
1
Interconnect extension circuits (IEC) 2Mbit per km
4
3
1
Customer Sited Interconnect cct (CSI) 2Mbit per km
4
4
In Span Interconnect circuits (ISI) transmission
2
2
Nominated In Span I/Connect cct (ISI) transmission
4
3
Intra Building Circuit (IBC) connection
1
1
Intra Building Circuit (IBC) rental
PC rental 2Mbit link per km distribution
8
8
105
105
PC rental 2Mbit link per km trunk
38
9
PC rental 34Mbit link per km distribution
15
PC rental 34Mbit link per km trunk
12
PC rental 140Mbit link per km distribution
15
13
PC rental 140Mbit link per km trunk
16
2
PC rental 622Mbit link per km trunk
23
Point of Handover electronics
12
2
13
4
4
45
PC rental 2Mbit link
31
31
PC rental 34Mbit link
4
PC rental 140Mbit link
5
51
1
23
45
64Kbit PC link connection cct provision
29
15
PC rental 64Kbit link
PC rental 64Kbit link per km transmission
1
3
1
6
(1)
51
1
1
2Mbit and above PC link connection cct provision
49
48
PC rental 64Kbit link local end
27
25
PC rental 34Mbit link local end
21
PC rental 140Mbit link local end
11
PC rental 2Mbit local end copper
19
18
1
190
180
10
PC rental 2Mbit local end fibre
0
0
1
1
19
2
11
0
118
1
Appendix 1 - Other Information
Appendix 1.3.2 - Network Services Reconciliation 2011 (continued)
Non cost accounting, roundings and
residual (h)
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)(h)
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 ISDN2 exchange line
services
Total (from annex 15)
Fully Allocated Cost (£m) (h)
Wholesale analogue exchange line
services
Consolidation Statement (a summary of all wholesale markets where
e 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 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
6
8
51
341
3
7
18
17
96
20
48
0
8
0
7
15
238
3
271
59
1883
169
50
52
5
479
19
85
4
176
28
3
6
68
307
1
7
1
2
1
1
1
48
334
2
6
18
17
88
11
40
1
1
2
2
1
2
4
1
3
7
1
1
8
1
2
0
0
0
8
7
11
39
1
222
43
1,542
124
26
27
5
397
19
68
0
0
1
0
6
2
43
5
0
0
0
11
4
107
1
40
10
279
30
14
14
0
0
0
2
0
13
1
0
0
71
0
91
1
1
4
6
9
10
11
0
0
0
0
0
17
4
176
27
2
7
24
7
0
0
5
104
119
3
35
1
1
(1)
36
161
Appendix 1 - Other Information
Appendix 1.3.2 - Network Services Reconciliation 2011 (continued)
Non cost accounting, roundings and
residual (h)
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)(h)
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 ISDN2 exchange line
services
Total (from annex 15)
Fully Allocated Cost (£m) (h)
Wholesale analogue exchange line
services
Consolidation Statement (a summary of all wholesale markets where
e there are cost accounting obligations)
Components
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
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
4
1
82
0
33
45
21
2
38
0
98
25
49
17
162
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
SMP Accounting Separation components
Residual components
Roundings
170
2,555
2
TOTAL
9,867
0
1
1
27
17
0
0
0
0
0
33
45
20
1
38
0
36
4
27
17
1
1
1
8
2
6
3
4
1
38
1
1
38
6
6
0
0
0
15
12
9
44
0
28
90
0
5
0
0
2
13
2
5
0
3
0
1
8
1
6
0
0
2
0
0
0
7
0
8
19
35
0
19
31
5
0
3
4
(h) See Section 4 - Basis of Preparation for explanation of restatement.
120
3
2
0
0
4
1
11
16
1
1
4
10
36
9
35
33
22
21
2
3
95
10
8
1
3
8
4
24
33
14
24
72
84
106
Appendix 2 - Price Control Statements
Appendix 2 - Price Control Statements
Appendix 2
Price Control Statements
121
Appendix 2 - Price Control Statements
Appendix 2.1 - Price Controls in Access and Other Wholesale Markets
(Annex 24)(Unaudited)
No formal charge controls were imposed on WLR Analogue or LLU in 2011/12. In place was a voluntary
price agreement between BT and Ofcom. As a result there is no disclosure in the Current Cost Financial
Statements for the year ended 31 March 2012.
This Appendix shows an extract from the most recent price control submissions to Ofcom to meet BT's
price control obligations.
Ofcom imposed price ceilings through the ISDN30 market review dated 20 August 2010. The ceilings
are:
Price Control summary of calls information submitted to Ofcom for the year from 1 October 2010 to 30
September 2011.
Controlling %
to 30
September
2011
Actual Basket
Yield
RPI+3.75%
8.76%
£7.3m
RPI+2.75%
7.76%
£7.0m
RPI between
June 2009 &
June 2010
Charge Control
Call Termination
5.0%
Call Origination
5.0%
Basket
Interconnect Specific
5.0%
RPI+3.75%
8.76%
£0m
PPP Basket
5.0%
RPI+1.5%
6.51%
£0.7m
Price Control summary of AISBO information submitted to Ofcom for the year 1 October 2010 to 30
September 2011.
Charge Control
Basket
Controlling %
to 30
September
2011
RPI between
June 2010 &
June 2011
Charge
Control
Controlling %
to 30
September
2011
Price Change
to 30
September
2011
Ethernet core services
5.0%
RPI-7%
2.25%
£0.00m
Accommodation products
5.0%
RPI+4.5%
2.35%
£0.33m
Accommodation fee
5.0%
RPI-0%
5.00%
0.00%
Ethernet ancillary services
5.0%
RPI-0%
9.87%
£0.00m
RPI between
June 2010 &
June 2011
Charge
Control
Controlling %
to 30
September
2011
Price Change
to 30
September
2011
5.0%
RPI-0%
5.00%
£0.00m
Basket
Price Control summary of PPC information submitted to Ofcom for the year from 1 October 2010 to 30
September 2011.
RPI between
June 2010 &
June 2011
• Wholesale ISDN30 Line Rental - £141.00 per annum.
• Wholesale ISDN30 New Line Installation - £550.00.
• Wholesale ISDN30 Existing Line Transfer (Connection charge per 30 Channel Access Bearer Per
Bearer) - £75.00.
Actual Basket
Yield
TI Basket
5.0%
RPI-1.75%
3.25%
6.32%
Equipment
5.0%
RPI-0%
5.00%
5.00%
Ancillary
5.0%
RPI-0%
5.00%
-0.22%
Sub-cap
BES
122
Glossary and Footnotes List
Glossary and Footnotes List
Glossary and Footnotes List
123
Glossary and Footnotes List
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.btplc.com/Sharesandperformance/Annualreportandreview/
index.cfm.
Current Cost
Accounting
("CCA") adjustments
ASBO
Asymmetric Broadband Orgination.
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.
ATM
Asynchronous Transfer Mode.
Cust
Customers.
Baskets
Baskets are collections of services not considered to be competitive and for
which prices are subject to specific charge controls.
DAM
BES
Backhaul Extension 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.
BNS
Backhaul Network Services.
DLRIC
LRIC plus a share of common costs.
ca
Cables.
DSAC
Stand alone cost (SAC) excluding a share of core common costs.
cct
Circuits.
D-side
Distribution side.
CELA
Central and East London Area.
DSL
Digital Subscriber Line.
chann
Channels.
DSLAM
Digital Subscriber Line Access Multiplexer.
CLZ
Central London Zone.
DVM
The Detailed Valuation Methodology. This sets out the methodology by
which current cost valuations are obtained.
Components
Within these Statements, the term components includes both network components and network parts.
EAD
Ethernet Access Direct.
conn
Connections.
EBD
Ethernet Backhaul Direct.
EBITDA
Earning before interest, tax, depreciation and amortisation.
124
Glossary and Footnotes List
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.
PoPs
Points of Presence
LTT
Local-tandem transmission.
PPC
Partial Private Circuit.
m
Metres.
PPM
Pence per Minute.
PPP
Product management, policy and planning.
125
Glossary and Footnotes List
Glossary (continued)
Glossary (continued)
PRS
Premium Rate Services.
WES
Wholesale Extension Services.
r
Rooms.
RBS
Radio Base Station Backhaul.
Wholesale cost
accounting
Cost accounting in Wholesale markets deals with products and services sold
to Communications Providers.
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.
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.
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.
Footnotes List
(a)
This component is attributed on a % basis so no volume or unit cost is derivable.
(b)
See glossary for volume unit descriptors.
(c)
Unit of length is 10 kilometres.
(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 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; £/fibre km = £ per fibre km.
SG&A
Sales, General and Administration.
SMP
Significant Market Power.
SMPF
Shared Metallic Path Facilities.
TDM
Time Division Multiplexing.
(g)
See Section 4.2.1 for improved disclosure of services in the AISBO market.
TISBO
Traditional Interface Symmetric Broadband Orgination.
(h)
See Section 4 - Basis of Preparation for explanation of restatement.
tover
Takeovers.
(n)
Accounting Separation components require no costs to be disclosed.
Trans
Transactions.
(q)
This is the total cost not unit cost for this component.
VIC
Virtual Interconnect Circuit.
(t)
VoIP
Voice over IP.
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.
Usage Factors
Usage Factors refer to the usage of any network component, including conveyance components.
(u)
Costs associated with these services are immaterial and included within the
above reported AISBO services and hence not disclosed separately.
126
Glossary and Footnotes List
Footnotes List
(v)
Revenues shown are prior to the 'revenue share' between BT and Other
Communications Providers (OCPs).
(y)
Unit costs calculated as a weighted average of the 64kbit PC link connection
cct provision & 64kbit PC link connection cct rearrangements.
(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.
(ad)
Does not include the service Wholesale Call originating local exchange segment (ISDN) (excl. Operator Assistance) due to immaterial volumes.
(ao)
The price for 64Kbit/s enhanced maintenance is weighted to include different 64Kbit/s equivalent services.
(ap)
Reduction in FAC due to notional creditor generated by the EOI charge from
Openreach to WBA markets.
(un)
This service comprises a large number of volumetrics and prices.
(*)
This component is attributed on a % basis so no volume or unit cost is derivable.
127
Additional Information
Additional Information
Additional Information
128
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: +44 121 415 7028
https://help.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
129