Belgacom Annual Report 2010 /// Management report /// 100
Service Delivery Engine & Wholesale – SDE&W Revenue (in EUR million)
SDE&W revenues
SDE&W ended the year with EUR 342 million of revenues, or a decline of 11.4% year-over-year on a reported basis. This decline mainly results from the intercompany flows that have been eliminated as from 2010 due to the legal entity merger. On a like-for-like basis, SDE&W revenues were down 1.7% year-over-year while absorbing a negative regulation24 impact of EUR 22 million (-6.4%). Excluding the effect from regulation, full-year revenues were up 4.7%, driven by the migration of Scarlet customers moving from a bitstream to a Carrier DSL solution.
415
386
2008
342
2009
2010
SDE&W operating expenses
Cost of Sales for the year 2010 were positively impacted by the eliminated intercompany costs. On a like-for-like basis25, the full-year Cost of Sales decreased by 26.2% to EUR 46 million, driven by the positive effect of the financial collecting model for Premium Rate Services. Full-year HR expenses amounted to EUR 203 million, or an increase of 5.2% year-over-year, driven by more
headcount and the 2% wage indexation of October 2010. Non-HR expenses for the year 2010 were impacted by the swap of the Radio Access Work to Huawei equipment and by additional costs following the migration of Scarlet customers. As a result, the non-HR costs increased 9.3% year-overyear to EUR 202 million. Total expenses (in EUR million) Cost of sales
93
72
46
209
193
203
179
185
202
2008
2009
2010
HR Non-HR
Staff & Support – S&S S&S revenues
Staff and Support generated EUR 35 million of revenues during the year 2010, or a slight increase of 4.6%. This results, amongst other things, from slightly higher capital gains realized on the sale of buildings. Revenue (in EUR million) 34
33
35
S&S operating expenses
Total operating expenses were down 4.1% to EUR 355 million, mainly driven by the company-wide focus to reduce costs. Total expenses (in EUR million) Cost of sales
3
0
1
166
165
237
204
192
2008
2009
2010
160
HR Non-HR
2008
2009
2010
24. Revenues were mainly pressured by the financial collecting model for Premium Rate services and, to a lesser extent, by the regulation on Roaming tariffs, Mobile Termination Rates and new LLU and bitstream prices as from August 2010. 25. Compared to 2009, excluding intercompany costs