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Swisscom Switzer­land

In CHF million, except where indicated   2019   2018   Change
             
Net revenue and results
Telecom services   5,932   6,222   –4.7%
Solution business   1,021   1,027   –0.6%
Merchandise   808   718   12.5%
Wholesale   643   566   13.6%
Revenue other   80   202   –60.4%
Revenue from external cus­tomers   8,484   8,735   –2.9%
Intersegment revenue   79   71   11.3%
Net revenue   8,563   8,806   –2.8%
Direct costs   (1,897)   (1,971)   –3.8%
Indirect costs   (3,175)   (3,259)   –2.6%
Segment expenses   (5,072)   (5,230)   –3.0%
Segment result before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   3,491   3,576   –2.4%
Margin as % of net revenue   40.8   40.6    
Lease expense   (226)   (221) 1   2.3%
De­pre­ci­a­tion   (1,515)   (1,471)   3.0%
Segment result   1,750   1,884   –7.1%
             
Operational data at end of period in thousand
Fixed tele­phony access lines   1,594   1,788   –10.9%
Broad­band access lines retail   2,033   2,033   0.0%
Swisscom TV access lines   1,555   1,519   2.4%
Mobile access lines   6,333   6,370   –0.6%
Revenue generating units (RGU)   11,515   11,710   –1.7%
Broad­band access lines wholesale   515   481   7.1%
             
Capital ex­pen­di­ture and headcount
Capital ex­pen­di­ture   1,761   1,620   8.7%
Full-time equivalent employees at end of year (number)   13,979   14,448   –3.2%
1 Includes expenses for operating and finance leases in accordance with IAS 17.

Net revenue for Swisscom Switzer­land fell by CHF 243 million or 2.8% to CHF 8,563 million as a result of continuing price pressure and the decline in the number of con­nec­tions in fixed-line tele­phony. Revenue from telecom­mu­ni­ca­tions services decreased by CHF 290 million or 4.7% to CHF 5,932 million. Of this decline, CHF 178 million (–3.4%) was attributable to the Residential Cus­tomers segment and CHF 112 million (–10.9%) to the Enterprise Cus­tomers segment. In Enterprise Cus­tomers, revenue from the solutions business remained relatively stable (–0.6%). The decline as a result of price pressure and lower volumes in the workplace and banking areas was nearly offset by growth in the areas of security and the cloud. Incoming orders in 2019 amounted to around CHF 3.1 bil­lion. In Wholesale, revenues increased due to higher demand for broad­band con­nec­tions, ad­di­tional mobile network cus­tomers and higher inbound roaming volumes.

The number of revenue-generating units decreased by 1.7% or 0.2 million to 11.5 million, chiefly as a result of the downward trend in fixed-line tele­phony. The number of fixed-line tele­phony con­nec­tions fell by 194,000 or 10.9% to 1.6 million. In the saturated mobile tele­phony market, the subscriber base remained almost stable at 6.33 million (–0.6%). The number of prepaid lines declined by 7.8% to 1.56 million, while postpaid lines increased by 2.0% to a total of 4.77 million. The broad­band and TV markets are also saturated. Nevertheless, the number of TV cus­tomers rose by 2.4% to 1.56 million, while the number of broad­band con­nec­tions remained stable at 2.03 million. The number of inOne cus­tomers is continuing to increase. In 2019, the inOne customer base grew by 0.4 million to 2.8 million. These cus­tomers are using a total of 5.4 million products, which represents an increase of 0.9 million within the space of a year. inOne mobile, which was launched in February 2019 and in­te­grates roaming (voice and data) in Europe into the basic charge, had 1.15 million cus­tomers at the end of 2019.

Segment expense fell by CHF 158 million or 3.0% to CHF 5,072 million. Direct costs decreased by CHF 74 million or 3.8% to CHF 1,897 million. Lower costs for acquiring and retaining cus­tomers were offset by higher costs for the purchase of services and goods. Indirect costs were CHF 84 million or 2.6% lower at CHF 3,175 million. Adjusted for provisions of CHF 62 million recog­nised for headcount reduction, the decrease was CHF 146 million or 4.5%. This was mainly driven by the declining headcount and lower costs for external staff and the operation of IT systems. Headcount fell as a result of efficiency mea­sures by 469 FTEs or 3.2% to 13,979. The segment result before de­pre­ci­a­tion and amor­ti­sa­tion was CHF 85 million or 2.4% lower at CHF 3,491 million. This decrease, which is attributable to lower revenue, was largely offset by ongoing cost-cutting mea­sures. Capital ex­pen­di­ture climbed by CHF 141 million or 8.7% to CHF 1,761 million as a result of the ex­pen­di­ture on the mobile radio fre­quen­cies acquired. Capital ex­pen­di­ture for the expansion of the broad­band networks remained at a high level. As at the end of 2019, 74% of all households and businesses were connected with ultra-fast broad­band exceeding 80 Mbps. 47% of all homes and offices benefit from fast con­nec­tions with bandwidths of more than 200 Mbps.