Table:
| Openreachc |  |  |  |  |
| --- | --- | --- | --- | --- |
| Adjusteda revenue £5,075m |  |  | Adjusteda operating profit £955m |  |
|  | 2019 (IFRS 15) | 2018 (IAS 18) | Change |  |
| Year to 31 March | £m | £m | £m | % |
| Adjusted a revenue | 5,075 | 5,278 | (203) | (4) |
| Adjusted a operating costs | 2,652 | 2,663 | (11) | – |
| Adjusted a EBITDA | 2,423 | 2,615 | (192) | (7) |
| Depreciation & amortisation | 1,468 | 1,401 | 67 | 5 |
| Adjusted a operating profit | 955 | 1,214 | (259) | (21) |
| Capital expenditure | 2,081 | 1,699 | 382 | 22 |
| Normalised free cash flowb | 685 | 1,100 | (415) | (38) |
Paragraphs:
Openreach has a UK-wide presence which is overlapped by our competitors in around half the country. This overlap is expected to grow as alternative network providers build-out new fibre footprint. Our volume discount deal, signed with the majority of our major communications provider customers, has led to another record quarter for fibre sales. We are also rapidly expanding our fibre-to-the-premises network to provide the next generation of services for our customers. We have experienced strong demand from businesses for Ethernet circuits for the second consecutive quarter.
Adjusteda revenue decline of 4% for the year was driven by regulated price reductions predominantly on FTTC and Ethernet products, non-regulated price reductions (mainly driven by communications providers signing up for fibre volume discounts), a small decline in our physical line base and a reclassification of costs to revenue. This was partly offset by 25% growth in our fibre rental base, a 9% increase in our Ethernet rental base and the impact of adopting IFRS 15.
Adjusteda operating costs were broadly flat, with higher costs from recruiting and training engineers to support our ‘Fibre First’ programme and help improve customer experience, as well as pay inflation and business rates, offset by efficiency savings and a reclassification of costs to revenue. Adjusteda EBITDA was down 7% for the year.
Capital expenditure was £2.1bn, up 22%, driven by investment in our FTTP and Gfast network build and higher year-on-year BDUK net grant funding deferrals, partly offset by efficiency savings.
Normalised free cash flowb was down 38% due to the EBITDA decline, higher underlying capital expenditure (excluding BDUK grant funding deferrals) and timing of customer receipts.
a Adjusted measures exclude specific items, as explained in the Additional Information on page 185. b Free cash flow after net interest paid, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items. c Openreach comparatives have been re-presented to reflect the transfer of Northern Ireland Networks from Enterprise to Openreach.
Question:
What was the reason for decrease in Adjusteda revenue decline?
Answer: driven by regulated price reductions predominantly on FTTC and Ethernet products, non-regulated price reductions (mainly driven by communications providers signing up for fibre volume discounts), a small decline in our physical line base and a reclassification of costs to revenue