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Swisscom Switzer­land

In CHF million, except where indicated   2021   2020   Change
             
Net revenue and results
Telecom services   5,478   5,667   –3.3%
Solution business   1,111   1,058   5.0%
Merchandise   776   759   2.2%
Wholesale   658   661   –0.5%
Revenue other   154   48   220.8%
Revenue from external cus­tomers   8,177   8,193   –0.2%
Intersegment revenue   56   57   –1.8%
Net revenue   8,233   8,250   –0.2%
Direct costs   (1,826)   (1,772)   3.0%
Indirect costs   (2,954)   (3,012)   –1.9%
Segment expenses   (4,780)   (4,784)   –0.1%
Segment result before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   3,453   3,466   –0.4%
Margin as % of net revenue   41.9   42.0    
Lease expense   (232)   (232)   0.0%
De­pre­ci­a­tion and amor­ti­sa­tion   (1,475)   (1,509)   –2.3%
Segment result   1,746   1,725   1.2%
             
Operating free cash flow proxy
Segment result before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   3,453   3,466   –0.4%
Lease expense   (232)   (232)   0.0%
EBITDA after lease expense (EBITDA AL)   3,221   3,234   –0.4%
Capital ex­pen­di­ture   (1,642)   (1,599)   2.7%
Operating free cash flow proxy   1,579   1,635   –3.4%
             
Operational data in thousand and full-time equivalent employees
Fixed tele­phony access lines   1,424   1,523   –6.5%
Broad­band access lines retail   2,037   2,043   –0.3%
TV access lines   1,592   1,588   0.3%
Mobile access lines   6,177   6,224   –0.8%
Revenue generating units (RGU)   11,230   11,378   –1.3%
Broad­band access lines wholesale   596   555   7.4%
Headcount   12,889   12,845   0.3%

Swisscom Switzer­land’s net revenue decreased by 0.2% or CHF 17 million to CHF 8,233 million. The continuing com­pet­i­tive and price pressure led to a drop of 3.3% or CHF 189 million in revenue from telecoms services to CHF 5,478 million. Of this decline, CHF 105 million (–2.7%) was attributable to the Residential Cus­tomers segment and CHF 84 million (–4.9%) to the Business Cus­tomers segment. By contrast, revenue from the solutions business increased by 5.0% or CHF 53 million to CHF 1,111 million.

The market is showing signs of saturation and com­pet­i­tive pressure in the area of mobile com­mu­ni­ca­tions and fixed-network services. The subscriber base in mobile com­mu­ni­ca­tions shrank by 0.8% or 47,000 year-on-year to 6.18 million. The number of postpaid lines increased by 128,000 year-on-year, while the number of prepaid lines decreased by 175,000. In the Residential Cus­tomers segment, the share of the secondary brand Wingo and third-party brands such as M-Budget Mobile and Coop Mobile in the postpaid portfolio increased from 19% to 23%. The number of broad­band and TV con­nec­tions remained virtually stable year-on-year, at 2.04 million broad­band con­nec­tions and 1.59 million for TV. As at the end of 2021, the Residential Cus­tomers segment had 2.52 million inOne cus­tomers. In this segment, inOne accounted for 66% of postpaid mobile lines and 81% of broad­band con­nec­tions. The number of fixed tele­phony access lines fell by 6.5% or 99,000 year-on-year to 1.42 million.

Segment expense fell by 0.1% or CHF 4 million to CHF 4,780 million. Direct costs increased by 3.0% or CHF 54 million to CHF 1,826 million. Costs for merchandise and services and costs for acquiring and retaining cus­tomers both went up. Indirect costs decreased by 1.9% or CHF 58 million to CHF 2,954 million. During 2021, indirect costs were also impacted by a CHF 52 million increase in provisions for litigation and an increase in provisions for headcount reduction. On a like-for-like basis, indirect costs fell by 4.0% or CHF 119 million, chiefly due to ongoing efficiency im­prove­ments. As a con­se­quence of the acquisitions of Webtiser and JLS Digital, the number of employees increased by 0.3% or 44 FTEs to 12,889 FTEs. The segment result before de­pre­ci­a­tion and amor­ti­sa­tion decreased by 0.4% or CHF 13 million to CHF 3,453 million, but increased by 1.4% on a like-for-like basis. The decline in revenue from telecoms services and the higher costs associated with services and subscriber acquisition and retention were offset by ongoing efficiency im­prove­ments. Capital ex­pen­di­ture rose by 2.7% or CHF 43 million to CHF 1,642 million. Capital ex­pen­di­ture on the expansion of broad­band networks and mobile networks increased, while capital ex­pen­di­ture on other in­fra­struc­ture decreased. As at the end of 2021, around 4.8 million Swiss homes and businesses, or 90% of the total, were connected with ultra-fast broad­band exceeding 80 Mbps. More than 3.9 million homes and businesses, or 72% of the total, enjoy even faster con­nec­tions with speeds of more than 200 Mbps.

There is currently a great deal of uncertainty shrouding the con­tin­ued rolling out of the fibre-optic network to homes and businesses (FTTH), which Swisscom is implementing for the whole of Switzer­land. In 2021, the Federal Ad­min­is­tra­tive Court confirmed the pre­cau­tion­ary mea­sures taken by the Competition Commission in December 2020, which partly call into question Swisscom’s network architecture. Until the situation is clarified, Swisscom is only building network elements relating to the P2P (point-to-point) network element (e.g. feeder to the home) or that are being built under coop­er­a­tions.