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6 Segment information

General disclosures

Operating segments requiring to be reported are determined on the basis of the management approach. Accordingly, external segment reporting reflects the internal financial reporting to the Chief Operating Decision Maker. The segment information disclosed is in line with that reported in the internal reporting system. Reporting is divided into the segments “Residential Customers”, “Small and Medium-Sized Enterprises”, “Enterprise Customers”, “Wholesale” and “IT, Network & Innovation” which are regrouped under Swisscom Switzerland, as well as “Fastweb” and “Other Operating Segments”. In addition, “Group Headquarters”, which includes unallocated costs, are reported separately in segment reporting. Further segment disclosures are set out in Note 3.16.

Group Headquarters charges no management fees for its financial management and the segment IT, Network & Innovation charges no network costs to other segments. Other services between the segments are recharged between the segments at market prices. The results of the segments Residential Customers, Small and Medium-Sized Enterprises, Enterprise Customers and Wholesale equate to a contribution margin prior to network costs. The segment results of IT, Network & Innovation reports, as its segment result, operating expenses and depreciation and amortisation, less revenues from the rental and management of real estate, the capitalised costs of self-constructed assets and other income. The segment results of Swisscom Switzerland correspond in aggregate to the operating results (EBIT) of Swisscom Switzerland. The services offered by the individual operating segments are described in Note 3.16. The segment results of Fastweb and Other Operating Segments correspond to the operating results (EBIT) of these units. This latter encompasses net revenues from external customers and other segments, less segment expenses, depreciation and amortisation and impairment losses on property, plant & equipment and intangible assets. Segment expenses comprise the costs of materials and services, personnel expenses and other operating costs less capitalised costs of self-constructed assets and other income.

Segment expense includes ordinary employer contributions as retirement-benefit expense. The difference between the ordinary employer contributions and the retirement-benefit expense as provided for under IAS 19 is reported in the column “Eliminations”. In 2016, an amount of CHF 72 million is included in the column “Eliminations” as a reconciling item to retirement-benefit expense in accordance with IAS 19 (prior year: CHF 60 million).

Services provided to or sales of assets recharged between the individual segments may include unrealised gains or losses. These are eliminated and are reported in the segment information in the column “Eliminations”.

Segment information 2015 and 2016

Segment information for 2016 of Swisscom may be analysed as follows:


2016, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
  Group
Head-
quarters
 
Elimi-
nation
 

Total
Net revenue from external customers   9,374   1,948   320   1     11,643
Net revenue from other segments   66   9   274   1   (350)  
Net revenue   9,440   1,957   594   2   (350)   11,643
Segment result   2,197   124   27   (114)   (86)   2,148
Financial income and financial expense, net                       (155)
Share of results of associates                       (3)
Income before income taxes                       1,990
Income tax expense                       (386)
Net income                       1,604
                         
Associates   112   4   77       193
Capital expenditure in property, plant and equipment and other intangible assets   1,743   633   60     (20)   2,416
Depreciation, amortisation and impairment losses   1,489   597   67     (8)   2,145
Gain (loss) on disposal of property, plant and equipment, net   11           11
Share of results of associates   (9)     6       (3)

Segment information 2016 of Swisscom Switzerland may be analysed as follows:


2016, in CHF million
 

Residential
Customers
  Small and
Medium-
Sized
Enterprises
 

Enterprise
Customers
 

Whole-
sale
 
IT,
Network &
Innovation
 

Elimi-
nation
  Total
Swisscom
Switzer-
land
Net revenue from external customers   5,020   1,334   2,400   591   29     9,374
Net revenue from other segments   140   33   211   398   100   (816)   66
Net revenue   5,160   1,367   2,611   989   129   (816)   9,440
Segment result   2,748   847   722   388   (2,508)     2,197
                             
Associates   39   1   15   56   1     112
Capital expenditure in property, plant and equipment and other intangible assets   137   40   159     1,407     1,743
Depreciation, amortisation and impairment losses   122   45   117     1,204   1   1,489
Gain (loss) on disposal of property, plant and equipment, net   1   (1)   (4)     15     11
Share of results of associates   (25)   (1)   1   16       (9)

Segment information 2015 of Swisscom is to be analysed as follows:


2015, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
  Group
Head-
quarters
 
Elimi-
nation
 

Total
Net revenue from external customers   9,475   1,862   340   1     11,678
Net revenue from other segments   70   5   263   1   (339)  
Net revenue   9,545   1,867   603   2   (339)   11,678
Segment result   2,218   (16)   (5)   (117)   (68)   2,012
Financial income and financial expense, net                       (272)
Share of results of associates                       23
Income before income taxes                       1,763
Income tax expense                       (401)
Net income                       1,362
                         
Associates   105   42   76       223
Capital expenditure in property, plant and equipment and other intangible assets   1,817   581   48     (19)   2,427
Depreciation, amortisation and impairment losses   1,383   635   74     (6)   2,086
Gain (loss) on disposal of property, plant and equipment, net   20     (3)       17
Share of results of associates   16     7       23

Segment information 2015 of Swisscom Switzerland is to be analysed as follows:


2015, in CHF million
 

Residential
Customers
  Small and
Medium-
Sized
Enterprises
 

Enterprise
Customers
 

Whole-
sale
 
IT,
Network &
Innovation
 

Elimi-
nation
  Total
Swisscom
Switzer-
land
Net revenue from external customers   5,075   1,339   2,449   579   33     9,475
Net revenue from other segments   149   31   205   377   97   (789)   70
Net revenue   5,224   1,370   2,654   956   130   (789)   9,545
Segment result   2,797   859   818   198   (2,454)     2,218
                             
Associates   31   2   15   56   1     105
Capital expenditure in property, plant and equipment and other intangible assets   180   50   171     1,416     1,817
Depreciation, amortisation and impairment losses   136   48   92     1,107     1,383
Gain (loss) on disposal of property, plant and equipment, net       (5)     25     20
Share of results of associates   (3)       19       16

Disclosures by geographical regions

­Swisscom’s operations are conducted mainly in Switzerland where it provides a comprehensive range of telecommunication services. Business activities abroad mainly relate to Fastweb which primarily provides fixed-network and IP-based products in Italy. Net revenue and assets are allocated to regions. Net revenue and assets are allocated according to the registered office of the related Group company.

  2016   2015

In CHF million
 
Net revenue
  Non-current
assets
 
Net revenue
  Non-current
assets
Switzerland   9,665   14,368   9,764   14,151
Italy   1,948   2,876   1,864   2,904
Other countries in Europe   30   132   43   125
Other countries outside Europe       7  
Not allocated     543     592
Total   11,643   17,919   11,678   17,772

Disclosures by products and services

In CHF million   2016   2015
Mobile access lines single subscriptions   2,695   2,804
Fixed access lines single subscriptions   3,272   3,439
Bundled contracts   2,499   2,248
Other   3,177   3,187
Total net revenue   11,643   11,678

The products and services offered by each operating segment are described in Note 3.16.

Significant customers

­Swisscom has a large number of customers. No individual customer accounted for more than 10% of segment revenue in 2015 and 2016.