Jersey Telecom's Annual Report & Accounts 2001

The financial results for the year show that turnover rose by 12% to £65.4 million resulting in a net operation profit of £14.96 million, up 16% on 2000. The financial return to the shareholder, the States of Jersey, amounted to £5.9 million, increased from £3.5 million in 2000.

Bob Lawrence, Jersey Telecom’s Executive Director, says in the report: “Trading conditions have remained buoyant and profits have been boosted by the continued growth in mobile services and strong sales of equipment and structured cabling installations. Despite significant price reductions, turnover from Private Circuits has increased, however price reductions in National, International and Mobile calls have reduced profits from this area of business. On the other hand, it is pleasing to note the positive impact on revenues that is beginning to occur as a result of the introduction of new services.”

He added: “We continued to seek opportunities to diversify through the provision of new services that are complementary to our core telecommunications business. By leveraging our knowledge and expertise, as well as our network capabilities, we have the potential to exploit prospects for expansion outside of our traditional geographic boundaries.”

The report also highlights the developments that were attained in 2001:

Turnover and profits
The continued growth of Jersey Telecom in 2001 resulted in a strengthening of both the profit and loss account and balance sheet with turnover increasing from £58.3m to £65.4m and operating profits increasing from £12.9m to £14.96m. The financial return to the shareholder, the States of Jersey, amounted to £5.9m, increased from £3.5m in 2000.

Principal drivers behind this improvement were the Private Circuit, Mobile and Structured Cabling sectors of the business.

Private Circuits were the subject of some significant price cuts throughout the year but the success of Capital Connect and Local Area Network products meant that revenues from this source increased by almost 20%.

In the mobile market, consumers again benefited from some considerable price cuts, but the primary driver of the increase in revenues was a full year’s contribution from prepaid and messaging services, launched during 2000.

Success of such mobile products has a subsequent effect on the revenues generated by the fixed network business. The substitution of calls and messages from mobile phones in place of calls using the traditional fixed network services has seen revenues from that source fall. The contribution to profits from the traditional fixed line services is expected to come under further pressure in 2002 with continued downward pressure on prices and further substitution from mobile products.

The Structured Cabling business succeeded in increasing its revenues by more than 40%. This was achieved through the successful completion of a number of significant installation contracts in Jersey’s active property market.

Capital investment
Capital expenditure on network plant and equipment saw a reduction from £12.8 million to £10.6 million due to the uncertainty in International markets dictating caution with new investment plans. This trend is not expected to continue as investment in broadband and 3G mobile systems will come to the fore in the next few years.

Price reductions
Throughout the year, both business and residential customers enjoyed the benefits of a number of significant price cuts to more than 25 European and International destinations. In some instances, such as Australia and Thailand, the cost of calls was cut by up to 60%.

Day to day business dealings and keeping in contact with family and friends in the UK also cost less after the price of national daytime calls was cut by 20%.

New tariff packages
A new initiative saw the launch of new fixed line tariffs, offering a variety of discounts and benefits to both residential and business customers depending on how they use their telephone.

Network quality
In 2001, work was completed on the Network Operations Centre (NOC), which is a state of the art network management facility. It represents significant investment and is a key part of Jersey Telecom’s strategy for continued success.

Jersey Telephone Directory
A new addition to the Jersey Telephone Directory was the inclusion of full colour Island maps in the ‘Know Where To Go Guide’ located at the back of the Directory and work was undertaken in preparation for the launch of the Local Number Search on-line service.

Customer service
The opening hours of the Retail Outlet shop were extended and the Mobile Services Helpline is now in operation 24 hours a day, 7 days a week.

Rapid and RapidBusiness
Jersey Telecom remains at the forefront of broadband technologies with ADSL-based Rapid and RapidBusiness products. These competitively priced products are available on a virtually Island-wide basis resulting in Jersey currently having one of the highest penetration rates for DSL services in Europe

GPRS Technology
General Packet Radio Service (GPRS) technology will be available in Jersey in 2002 which will connect local mobile phone customers to the Internet and improve data transfer speeds. In line with some other mobile operators in the UK, a full GPRS network was installed in 2001. This network will offer an ‘always on’ high capacity service bringing Internet content such as colour web browsing, email on the move, multimedia messages and LAN (Local Area Network) access to suitable mobile devices.

Mobile services
By the end of the year, more than 70% of Islanders owned a mobile phone and this high penetration level can be partly attributed to the phenomenal increase in the number of customers using Freedom – Jersey Telecom’s prepaid service.

The addition of new roaming partners meant that there are connections in 66 different countries with 124 roaming agreements in place.

Multimedia
In 2001 Jersey’s leading website portal – jerseyinsight.com – was given a new face. As well as a fresh look and feel, the site incorporates substantial new content and much greater functionality such as the ability for users to personalise content to their own requirements.

The Telecommunications Law has now been approved by the States and has been registered in the Royal Court. It is anticipated that the Law will come into force during the Autumn of 2002, completing the incorporation of Jersey Telecom as a wholly owned company of the States of Jersey.

Commenting on the future, Deputy Paul Routier, President of the Jersey Telecom Board, stated: “Jersey Telecom supports the principle of competition and welcomes it where it is of overall benefit to the Island. We recognise the benefits gleaned from the introduction of competition in liberalised markets but we believe that competition in service, rather than network provision, will better serve individual customers and the economy of Jersey as a whole. Due to a number of factors specific to Jersey, including a small population and therefore market, we believe it is not clear whether infrastructure competition is appropriate for the Jersey telecommunications market.”

He concluded: “Jersey Telecom intends to continue its excellent record of delivering value-for-money, world-class service and we hope to be able to work efficiently and pragmatically with all industry players and stakeholders to develop a truly effective telecommunications market”.

You may view the complete document as an Adobe® Acrobat® PDF file by clicking here.