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Swisscom boosts operating income – high levels of customer loyalty

‘I’m proud of our strong financial result and solid market performance in the first half of 2023,’ says CEO Christoph Aeschlimann. ‘Swisscom has delivered convincing performance across the board. Customer satisfaction is high. Although we have been unable to escape the current inflation unscathed, we are using efficient cost management to cushion the blow of rising costs. This allows us to guarantee that our blue subscription prices will remain unchanged until the end of 2024. «World Finance» magazine has rated Swisscom the world’s most sustainable telecommunications company for the third consecutive time. Our subsidiary Fastweb in Italy can also look back on a successful first half of the year.’

Slightly lower revenue in Swiss core business, growth at Fastweb
Group revenue fell slightly by 0.3% to CHF 5,450 million, which translates into an increase of 0.5% at constant exchange rates. In the Swiss core business, revenue fell slightly by 0.6% to CHF 4,044 million. Revenue from telecommunications services decreased by 1.2% to CHF 2,689 million. In contrast, revenue from IT services with business customers rose by 1.6% to CHF 583 million. The business in Italy continues to show positive development: year-on-year revenue growth at Fastweb comes in at EUR 52 million (+4.3%).

Consolidated operating income before depreciation and amortisation (EBITDA) is up by 5.1% in a year-on-year comparison to CHF 2,303 million. Excluding non-recurring items and at constant exchange rates, the increase comes to 2.1%. In the Swiss core business, the drop in revenue was offset by ongoing efficiency improvements, with EBITDA up by 0.9% on a like-for-like basis. The comparable EBITDA at Fastweb was up by 2.0% (in EUR). Net income rose by 8.0% year-on-year to CHF 848 million.

Network infrastructure: FTTH expansion continues
Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, consolidating its position at the cutting edge of technology. At CHF 1,113 million, investment across the Group was up on the level of the previous year (+5.7%).

Mobile network: over 77% 5G+ coverage
At the end of June 2023, Swisscom provided more than 77% of the Swiss population with 5G+. Rapid expansion is required to ensure high network quality and to continue to offer customers a first-rate mobile network. According to the industry association asut, 4.6 million 5G-enabled devices were in operation in Switzerland at the end of June 2023.

Broadband expansion: more optical fibre for the whole of Switzerland
In order to enable customers to use the high-speed FTTH connections, Swisscom made the decision at the end of 2022 to employ the point-to-point (P2P) architecture for new connections in the network expansion and to convert existing P2MP connections into P2P in the current rollout. Swisscom will have increased fibre-optic coverage (FTTH) to around 55% by the end of 2025, and to 70-80% by 2030.

Residential Customers: successful blue subscriptions – price security
At the end of June 2023, 2.01 million customers in the Residential Customers segment were using blue subscriptions. In this segment, blue accounts for 48% of all mobile subscriptions and 80% of fixed-line broadband connections. Despite inflation, Swisscom is maintaining stable prices for its blue offering (prepaid and postpaid), internet, TV and fixed network subscriptions, as well as secondary and third-party brands, and will not implement any general price increases until the end of 2024. The number of Swisscom fixed-line broadband connections fell by 0.7% year-on-year to 2.01 million connections, with the number of TV connections dropping by 2.1% to 1.55 million.

Revenue from telecommunications services in the Residential Customers segment remained more or less stable at CHF 1,919 million (-0.4%). The number of postpaid Swisscom mobile lines increased by 164,000 year-on-year, while the number of prepaid lines decreased by 126,000. The total number of mobile lines rose by 0.6% to 6.20 million.

Business Customers: fierce competition and higher demand for IT services
The market for business customers remains dominated by price pressure and technological changes. Revenue from telecommunications services was down by 3.1% year-on-year to CHF 770 million. Swisscom has a strong position as a full-service provider and customer satisfaction is high. Demand for cloud, security, IoT and SAP solutions and business applications continued to grow. Swisscom has further expanded its capacities in the IT business with the takeover of Axept Business Software AG. Revenue from IT services rose by 1.6% in the first half of 2023 to CHF 583 million.

Fastweb increases customers, revenue and EBITDA marking 10 years of continuous growth
Fastweb increased revenue in local currency terms by 4.3%. In the mobile communications market, the number of connections increased by 19.2% year-on-year to 3,34 million. Wireline customer base (retail and wholesale) grew overall by 2.1% to 3,16 million. Although the retail customer base in the broadband business fell slightly by 3.0% to 2,63 million, the number of lines provided by Fastweb to other operators grew and now reaches 532,000 (+37.8%). Bundled retail offers continue to play an important role, with 42% of customers using a package combining fixed network and mobile services. Residential customers revenues increased by 1.4% to EUR 580 million, while revenues in the business customer segment grew by 6.0% to EUR 527 million. Wholesale revenues also increased, by 10.8% to EUR 144 million.

Fastweb’s overall revenue rose year-on-year to EUR 1’251 million (+4.3%). Operating income before depreciation and amortisation (EBITDA) on a comparable basis rose by EUR 8 million (+2%). At the end of the first half of 2023 Fastweb marks 10 years of consecutive growth.

Long-term focus: reducing CO2
Sustainable business and the responsible use of resources have been a top priority for Swisscom for decades. The focus is on reducing CO2 emissions. The entire network has been running on 100% renewable energy from hydropower, sun and wind for more than 10 years. Ongoing technological modernisation and increased energy efficiency have allowed Swisscom to reduce CO2 emissions from its operations by more than 87% since 1990.

CT Bureau

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