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Swisscom Switzer­land

In CHF million, except where indicated   2020   2019   Change
             
Net revenue and results
Telecom services   5,667   5,952   –4.8%
Solution business   1,058   1,049   0.9%
Merchandise   759   807   –5.9%
Wholesale   661   643   2.8%
Revenue other   48   33   45.5%
Revenue from external cus­tomers   8,193   8,484   –3.4%
Intersegment revenue   82   89   –7.9%
Net revenue   8,275   8,573   –3.5%
Direct costs   (1,747)   (1,897)   –7.9%
Indirect costs   (3,001)   (3,192)   –6.0%
Segment expenses   (4,748)   (5,089)   –6.7%
Segment result before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   3,527   3,484   1.2%
Margin as % of net revenue   42.6   40.6    
Lease expense   (230)   (224)   2.7%
De­pre­ci­a­tion and amor­ti­sa­tion   (1,509)   (1,515)   –0.4%
Segment result   1,788   1,745   2.5%
             
Operating free cash flow proxy
Segment result before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   3,527   3,484   1.2%
Lease expense   (230)   (224)   2.7%
EBITDA after lease expense (EBITDA AL)   3,297   3,260   1.1%
Capital ex­pen­di­ture   (1,599)   (1,761)   –9.2%
Operating free cash flow proxy   1,698   1,499   13.3%
             
Operational data in thousand and full-time equivalent employees
Fixed tele­phony access lines   1,523   1,594   –4.5%
Broad­band access lines retail   2,043   2,058   –0.7%
TV access lines   1,554   1,555   –0.1%
Mobile access lines   6,224   6,333   –1.7%
Revenue generating units (RGU)   11,344   11,540   –1.7%
Broad­band access lines wholesale   555   515   7.8%
Headcount   12,591   13,055   –3.6%

Net revenue for Swisscom Switzer­land fell by CHF 298 million or 3.5% to CHF 8,275 million as a result of continuing com­pet­i­tive and price pressure and lower roaming revenues. To contain the Covid-19 pandemic, in­ter­na­tional travel was severely restricted. This led to a total decline in revenue of CHF 89 million in both telecom­mu­ni­ca­tions services and Wholesale. Revenue from telecom­mu­ni­ca­tions services decreased by CHF 285 million or 4.8% to CHF 5,667 million. Of this decline, CHF 164 million (–4.0%) was attributable to the Residential Cus­tomers segment and CHF 121 million (–6.6%) to the Business Cus­tomers segment. Revenue from the solutions business in Business Cus­tomers remained largely stable at CHF 1,058 million (+0.9%). Revenue was also affected by the high level of promotions. Sales of merchandise were unable to match the high volumes seen in 2019, with revenue falling by 5.9% to CHF 759 million. In Wholesale, revenue from external cus­tomers increased by 2.8%, with the increase in revenue due to higher demand for broad­band con­nec­tions and ad­di­tional mobile network cus­tomers outweighing the decline in inbound roaming.

The number of inOne cus­tomers continues to grow. As at the end of 2020, Swisscom had 2.45 million inOne cus­tomers in the Residential Cus­tomers segment. In this segment, inOne accounts for 68% of postpaid mobile sub­scrip­tions and 76% of broad­band con­nec­tions. The market is showing signs of saturation in the area of mobile com­mu­ni­ca­tions and fixed-network services, with the mobile subscriber base falling by 109,000 (–1.7%) to 6.22 million. The number of postpaid lines grew by 81,000, while the number of prepaid lines fell by 190,000. The number of broad­band con­nec­tions fell by 15,000 (–0.7%) to 2.04 million. There was also a shift to second and third brands. The number of TV con­nec­tions remained stable at 1.55 million. In fixed-line tele­phony, the downward trend is slowing as the switch to IP tech­nol­ogy has been completed. The number of fixed tele­phony access lines fell by 71,000 or 4.5% to 1.52 million.

Segment expense fell by CHF 341 million or 6.7% to CHF 4,748 million. Direct costs decreased by CHF 150 million or 7.9% to CHF 1,747 million, with costs for acquiring and retaining cus­tomers, roaming and purchasing merchandise all falling. In addition, the cost of broadcasting sporting events decreased because either such events were cancelled or will not take place until 2021 due to Covid-19. Indirect costs were CHF 191 million or 6.0% lower at CHF 3,001 million. Excluding the expense for headcount reductions, costs were reduced by CHF 129 million or 4.1%. This was mainly attributable to the declining headcount and lower advertising costs, while fewer customer service de­ploy­ments as a result of the stable networks and platforms also reduced costs. Headcount fell as a result of efficiency mea­sures by 464 FTEs or 3.6% to 12,591. The segment result before de­pre­ci­a­tion and amor­ti­sa­tion was CHF 43 million or 1.2% higher at CHF 3,527 million. On an adjusted basis, EBITDA fell by CHF 19 million or 0.5% The decline in revenue was largely offset by ongoing cost-cutting mea­sures.

Capital ex­pen­di­ture fell by 9.2% to CHF 1,599 million. The figure for the previous year included ex­pen­di­ture of CHF 196 million for mobile radio fre­quen­cies. Adjusted for this, capital ex­pen­di­ture increased by CHF 34 million or 2.2% due to higher spending on mobile network expansion and on the expansion of fibre-optic broad­band in the fixed network. As at the end of 2020, 82% of all Swiss homes and businesses were connected with ultra-fast broad­band exceeding 80 Mbps. 59% of all homes and businesses benefit from fast con­nec­tions with bandwidths of more than 200 Mbps. Of these, more than 1.7 million have been upgraded to FTTH. Swisscom intends to make ultra-fast broad­band avail­able in every Swiss municipality by the end of 2021, even in remote locations. Swisscom also plans to double FTTH coverage for homes and businesses to up to 60% by the end of 2025 compared with 2019 levels.