BT's pounds 5.3bn holes are most valuable asset

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The Independent Online
BT's 'holes in the ground' are worth a staggering pounds 5.3bn according to accounts filed last month with Oftel, writes Mary Fagan.

The value of BT's ducts - the holes in which it lays telephone wires - far outweighs that of its sophisticated switching equipment, or the pounds 2bn price tag given to its land and buildings.

The replacement value accorded the ducts suggests that they are the main source of competitive advantage to BT. This is despite the fact that the perceived wisdom in the telephone industry is that the real value of the business will increasingly lie in software and services.

The figures emerge for the first time in current cost accounts, which BT must now submit to Oftel in addition to its historic cost accounts. The same accounts put BT's total assets at pounds 17.2bn compared with pounds 15.58bn in the historic accounts. The pounds 32.1bn replacement cost figure for BT's assets compares with its stock market capitalisation of pounds 23.6bn.

----------------------------------------------------------------- BT'S ASSETS ----------------------------------------------------------------- Current Accumulated Net replacement cost depreciation cost pounds bn pounds bn pounds bn Land and buildings 3.4 1.4 2.0 Exchange equipment 5.6 2.7 2.9 Duct 9.9 4.6 5.4 Other plant and equipment 13.2 6.2 6.9 Balance 31 March 1994 32.1 14.9 17.2 -----------------------------------------------------------------