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2 Segment information

Reportable operating segments are determined on the basis of a management approach. Accordingly, external segment reporting reflects the Group’s internal organisational and management structure as well as internal financial reporting to the Chief Operating Decision Maker. Reporting is divided into the segments “Residential Customers”, “Small & Medium-Sized Enterprises”, “Enterprise Customers”, “Wholesale”, and “IT, Network & Innovation”, which are grouped under Swisscom Switzerland, as well as “Fastweb”, and “Other Operating Segments”. “Group Headquarters”, which includes non-allocated costs, is reported separately.

Group Headquarters charges no management fees to other segments for its financial management services, nor does the IT, Network & Innovation segment charge any network costs to other segments. Other intersegment services are charged at market rates. The results of the Residential Customers, Small & Medium-Sized Enterprises, Enterprise Customers and Wholesale segments are reported as a contribution margin before network costs. The results of the IT, Network & Innovation segment consist of operating expenses and depreciation and amortisation less the revenue from the rental and administration of buildings and capitalised costs of self-constructed assets and other income. The sum of the segment results of Swisscom Switzerland corresponds in aggregate to the opera­ting income (EBIT) of Swisscom Switzerland. The segment results of Fastweb and Other Operating Segments correspond to the operating income (EBIT) of these units. The latter reflects the net revenue from external customers and other segments less segment expense and depreciation, amortisation and impairment losses on tangible and intangible assets. Segment expense includes the costs of goods and services purchased, personnel expense and other operating costs less capitalised self-constructed assets and other income.

Segment expense includes the ordinary employer contributions as a pension cost. The difference between the ordinary employer contributions and the retirement benefit expense as provided for under IAS 19 is reported in the column “Elimination”. For the first quarter of 2016, an expense of CHF 18 million is disclosed under “Elimination” as a pension cost reconciliation item in accordance with IAS 19 (CHF 17 million in the first quarter of 2015).

Unrealised gains and losses may arise as a result of recharging services and sales of assets between the segments. These are eliminated and are reported in the segment information in the column “Elimination”.

Net revenue and the results of the individual segments for the first three months of 2016 are as shown below:


1.1.–31.3.2016, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
segments
  Group
Head-
quarters
 
Elimi-
nation
 

Total
Net revenue from external customers   2,329   480   76       2,885
Net revenue with other segments   16   2   53     (71)  
Net revenue   2,345   482   129     (71)   2,885
Segment result   599   (19)   4   (30)   (19)   535
Financial income and financial expense, net                       (79)
Share of results of associates                      
Income before income taxes                       456
Income tax expense                       (92)
Net income                       364

1.1.–31.3.2016, in CHF million
 

Residential
Customers
  Small and
Medium-
Sized
Enterprises
 

Enterprise
Customers
 


Wholesale
 

IT, Network &
Innovation
 

Elimi-
nation
 

Swisscom
Switzerland
Net revenue from external customers   1,252   328   605   139   5     2,329
Net revenue with other segments   35   8   51   81   25   (184)   16
Net revenue   1,287   336   656   220   30   (184)   2,345
Segment result   718   212   186   93   (609)   (1)   599

Net revenue and the results of the individual segments for the first three months of 2015 are as shown below:


1.1.–31.3.2015, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
segments
  Group
Head-
quarters
 
Elimi-
nation
 

Total
Net revenue from external customers   2,336   467   90       2,893
Net revenue with other segments   19   1   54     (74)  
Net revenue   2,355   468   144     (74)   2,893
Segment result   624   (30)   (1)   (29)   (20)   544
Financial income and financial expense, net                       (104)
Share of results of associates                       5
Income before income taxes                       445
Income tax expense                       (94)
Net income                       351

1.1.–31.3.2015, in CHF million
 

Residential
Customers
  Small and
Medium-
Sized
Enterprises
 

Enterprise
Customers
 


Wholesale
 

IT, Network &
Innovation
 

Elimi-
nation
 

Swisscom
Switzerland
Net revenue from external customers   1,252   320   607   148   9     2,336
Net revenue with other segments   39   7   50   82   25   (184)   19
Net revenue   1,291   327   657   230   34   (184)   2,355
Segment result   697   208   198   101   (579)   (1)   624