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Corporate strategy and objectives

Corporate strategy

Swisscom is the Swiss market leader in the field of telecommunications (mobile telecommunications and fixed telephone network) and digital television. It is also one of the leading providers in a wide range of IT business segments. Fastweb is the leading alternative provider for both retail and business customers in the Italian fixed-line market.

Society and the economy currently find themselves in a constant state of change. Megatrends such as digitisation and connectivity, customisation and demographic change are reshaping our society and the economy and have a more indirect and long-term impact on Swisscom’s business. In this context, Swisscom recognises a series of short to medium-term trends that constitute direct, strategic influencing factors, such as the increasing proliferation of the Internet of Things, data-­centric business models and progress in the field of artificial intelligence.

The market environment in which Swisscom operates has already changed radically in recent years. Connectivity is ever-present and will increase further. In the future, countless people, applications and devices will be in permanent communication with each other and the exponential data growth will continue at the same pace. Technological change is likewise proceeding at a rapid pace and customer requirements are changing in equal measure. The competition on the saturated core market is becoming increasingly fierce. New providers from around the world are forcing themselves into other ICT markets – often with disruptive business models – and are thus stepping up competition. These developments have exerted pressure on the revenues generated in the traditional Swisscom core business. The resulting lower revenue and income need to be offset in order to ensure that sufficient financial resources are available for major investments in new technologies.

WSGE_DP_GR_Strategie

The vision of Swisscom: the best in the networked world – always and everywhere

In an increasingly networked and digitised world, Swisscom always offers its customers the best – regardless of their location. Thus, Swisscom is a pioneer and resolutely drives digitisation forward. Swisscom is focusing on internal digitisation in order to ensure that it can operate on the market as a leading, exemplary company. As an optimal companion in the networked world, Swisscom strives to ensure simplicity and is a trusted, inspiring partner for its customers. Swisscom helps business customers to create flexible ICT infrastructures, adjust their business processes to meet the new challenges of the digital world and optimise communication and teamwork among their employees. In this formative role, Swisscom is helping to shape this new world and make Switzerland into a leading European ICT centre. To always offer the best in the networked world, Swisscom must meet the highest expectations in terms of infrastructure, customer experience and growth.

Building the best infrastructure

A high-quality infrastructure allows Swisscom to deliver its products and services, provide a consistently positive customer experience and differentiate itself from its competitors. Swisscom wants to offer its customers in Switzerland and Italy the leading IT and communications infrastructure. Reliance on high-performance networks that are always available will continue to increase in future. Swisscom is fulfilling the ever-growing requirements of its customers with networks that are second to none in terms of security, availability and performance. In the fixed network area, Swisscom’s focus is on driving forward the continuous, cost-efficient expansion of the ultrafast broadband network through various fibre-optic technologies – both in Switzerland and in Italy. Swisscom is continuing to drive forward the technological transition from traditional to IP-based solutions. It is constantly expanding its mobile network infrastructure and thus providing customers with the best experiences when using the network-based offerings. Swisscom aims to better meet customer needs through a scalable infrastructure, increasingly virtualised services and infrastructure, and continual improvement processes. The Swisscom Cloud infrastructure offers a high level of quality and security and is the basis for new scalable offerings that are produced in Switzerland. The transfer of internal platforms to the Swisscom Cloud increases scalability, flexibility and cost efficiency.

Offering the best experiences

To clearly distinguish itself in its core business, Swisscom is committed to delivering first-class service to its customers and inspiring them with unique experiences across the board. Swisscom customers can count on us as a competent, reliable partner and enjoy service that is individual, flexible and personal at all points of contact. From the customer’s perspective, contact with Swisscom should always be simple and convenient. Swisscom is thus reducing complexity and is focused on providing relevant offerings. It is also standardising and simplifying procedures and processes. When optimising processes and creating new digital services and experiences, Swisscom always takes a customer-centric approach and aims to improve customer perception. In doing so, Swisscom aims to further boost customer loyalty, strengthen its brand and improve its efficiency and agility.

Realising the best growth opportunities

Swisscom anticipates that the relevant markets in Switzerland and Italy will continue to grow steadily on the whole. The main drivers of growth are modest increases in population and the number of households, the rising number of connected devices (as a result of the “Internet of Things”) and the ever-growing use of ICT in a wide variety of industries. In addition to this, there is still pent-up demand and growth potential for convergent offerings in Italy due to the relatively low level of broadband penetration.

Swisscom wants to realise growth opportunities by further developing its core business – for example by means of growth in entertainment services (such as TV) and fibre-optic connections. There are further opportunities for growth in other sectors, too, such as healthcare – in which Swisscom provides vertical ICT services – the cloud, digital solutions for business customers, and digital security offerings. Swisscom is aiming to launch new digital services in selected areas. These services will be offered via the Internet and will in some cases rely on new business models. Examples include the offerings provided by Admeira (advertising),siroop (e-commerce) and localsearch (digital services for SMEs). Another focal point is the further development of Fastweb in Italy, where Swisscom intends to further improve the market position of its Italian subsidiary in order to generate an increasing value proposition.

In response to the far-reaching developments in the market environment, Swisscom periodically re-evaluates its strategy and focuses its implementation on counteracting the dynamic market conditions. It has defined five priorities in connection with this:

  • Maximising the core business: Swisscom will ensure its position as market leader in the long term, differentiate itself by means of high-quality products, infrastructure and customer service, and tap new sources of income in the core business. Swisscom is confronting the erosion of its core business through active customer relationship management (e.g. with bundles and customer loyalty) and an attractive multi-brand portfolio.
  • Further development of Fastweb: Swisscom is improving Fastweb’s market position and achieving growth in Italy thanks to the further development of the ultrafast broadband network, the utilisation of partnerships, the expansion of the mobile communications business as well as high service quality.
  • Focus on growth: In order to offset the decline in revenue in the core business and continue to offer customers relevant services, Swisscom is selectively tapping new growth areas in TIME markets and further developing its Internet business.
  • Operational excellence: Over the next few years, Swisscom will continuously optimise its cost base in order to remain financially successful in the long term and to absorb the effects of price competition and margin erosion (e.g. through simplicity, reducing the complexity of processes and adjusting the product portfolio).
  • Transformation: Swisscom will continue to work on developing the corporate culture, agile and customer-oriented methods, management and technology in order to prepare for the challenges it will face in the future (e.g. through the development of relevant key skills, the technological transformation (All IP) and clear innovation fields).

Forerunner in corporate responsibility

Swisscom’s corporate responsibility activities focus on issues which have high relevance for stakeholder groups and at the same time are closely linked to the company’s core business and thus entail market opportunities. Swisscom’s vision is of a modern, forward-looking Switzerland: a country of great opportunities, particularly in the field of sustainability. Specifically, Swisscom focuses on the following six areas as strategic priorities in the area of corporate responsibility. For each of these, it has formulated a long-term target.

Energy efficiency and climate protection

Together with its customers, Swisscom is aiming to save twice as much CO2 as it emits through its operations and supply chain by 2020. Green ICT enables companies to massively reduce energy consumption and CO2 emissions. Video conferencing and home office solutions generate savings in travel time and costs, and ICT services from the cloud allow business customers to operate their IT operations more efficiently than if they were to use a server of their own. Buildings, vehicles and networks can be managed in an energy-efficient manner thanks to ICT solutions. Swisscom also offers residential customers numerous ways to reduce their carbon footprint, from online billing to a recycling service for mobile phones. Swisscom is committed to reducing its own CO2 emissions from its operations and supply chain and also requires its suppliers to reduce their carbon footprint.

Work and life

By 2020, Swisscom aims to be supporting one million people with its offerings in the healthcare sector, such as the Swisscom health platform and corresponding fitness sensors, electronic patient dossiers and offerings from its subsidiary Datasport. Swisscom also wants to offer one million people the opportunity to use mobile working models by 2020. To this end, it has included Work Smart services in its portfolio and supports mobile working methods through activities such as the Home Office Day.

Media skills and security

Swisscom aims to be the market leader in data security by 2020, helping one million people to use the media safely and responsibly. Swisscom has for many years now provided free Internet access to schools and introduced first-time users to the digital world through media training courses. In doing so, Swisscom aims to protect young people in the use of online media by means of technical solutions and offerings that promote media skills.

Attractive employer

Swisscom wants to be one of the most attractive employers in Switzerland by 2020. It offers employees opportunities for personal development and promotes work-life balance. Fair terms and conditions of employment are as important to Swisscom as an active social partnership and an above-average commitment to vocational training. Swisscom employees also have the chance to get involved in social and community projects, for example, by participating in the Corporate Volunteering Programme.

Fair supply chain

In the interests of a fair supply chain, Swisscom is committed to improving employment conditions for more than two million people by 2020. To this end, Swisscom has forged international partnerships that will ensure the implementation of relevant measures in close collaboration with suppliers. The company also ensures that working conditions at its suppliers are reviewed for improvements every year as part of the audit process.

Networked Switzerland

By the end of 2021, some 90% of all homes and businesses will have a minimum bandwidth of 80 Mbps by the end of 2021 – with around 85% of those achieving speeds of 100 Mbps or higher. Furthermore, 99% of the population was able to benefit from the fourth-generation mobile network incorporating 4G/LTE technology by the end of 2016. According to calculations performed by the Boston Consulting Group (BCG), Swisscom is thus indirectly contributing around CHF 30 bil­lion to the country’s GDP and helping to create and maintain some 100,000 jobs.

Swisscom’s targets

Based on its strategy, Swisscom has set itself various short- and long-term targets that take economic, ecological and social factors into consideration.

    Objectives   Effective 2016
         
Financial targets 1
Net revenue   Group net revenue for 2016 of more than CHF 11.6 bil­lion   CHF 11,643 million
Operating income before depreciation and amortisation (EBITDA)   EBITDA for 2016 of around CHF 4.2 bil­lion   CHF 4,293 million
Capital expenditure in property, plant and equipment and other intangible assets   Capital expenditure for 2016 of more than CHF 2.3 bil­lion   CHF 2,416 million
       
Other targets
Ultrafast broadband in Switzerland 2   Coverage of 90% by the end of 2021   more than 3.5 million in excess of 50 Mbps
Ultrafast broadband in Italy   Coverage of 30% by the end of 2016   30% or 7.5 million
Mobile network in Switzerland   Coverage of 99% with 4G/LTE by the end of 2016   99%
Energy efficiency in Switzerland   +35% by the end of 2020 compared to 1 January 2016   +8.9%
Ratio CO2 reduction to CO2 emmissions 3   Ratio 2:1 by the end of 2020   0.99
1 As already communicated in 2016, the financial targets for 2016 were adjusted as a result of compensation received by Fastweb from legal proceedings and increased capital expenditure in the broadband networks in Switzerland: EBITDA of around CHF 4.25 bil­lion and capital expenditure of around CHF 2.4 bil­lion.
2 Basis: 4.3 million homes and 0.7 million businesses (Swiss Federal Statistical Office – SFSO).
3 Swisscom would like to save twice as much CO2 jointly with its customers, as she caused by the operation and the supply chain by the end of 2020.