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2 Segment information

Changes in segment reporting

As of 1 January 2021, Swisscom amended its organisational structure in Switzerland and the segment formerly known as IT, Network & Infrastructure was renamed Infrastructure & Support Functions. The departments with overlapping functions were merged organisationally at Swisscom Switzerland. As a result, Group Headquarters is no longer reported separately in the segment reporting. In addition, Swisscom has transferred various areas among the segments of Swisscom Switzerland and the Other Operating Segments as of 1 January 2021. The prior-year figures were restated as follows:

In CHF million   Reported   Adjustment   Restated
             
Net revenue 2020 financial year
Residential Customers   4,564   (4)   4,560
Business Customers   3,100     3,100
Wholesale   976     976
Infrastructure & Support Functions (previously IT, Network & Infrastructure)   85   (2)   83
Elimination   (450)   (19)   (469)
Swisscom Switzerland   8,275   (25)   8,250
Fastweb   2,470     2,470
Other Operating Segments   1,020   (6)   1,014
Elimination   (665)   31   (634)
Total net revenue   11,100     11,100
             
Segment result 2020 financial year
Residential Customers   2,586   (2)   2,584
Business Customers   1,235   3   1,238
Wholesale   523     523
Infrastructure & Support Functions (previously IT, Network & Infrastructure)   (2,556)   (64)   (2,620)
Swisscom Switzerland   1,788   (63)   1,725
Fastweb   166     166
Other Operating Segments   111   (1)   110
Group Headquarters   (64)   64  
Elimination   (99)     (99)
Total segment result   1,902     1,902

General information

WSGE_DP_GR_Swisscom_Segmente

Reporting is divided into the segments Residential Customers, Business Customers, Wholesale, and IT, Infrastructure & Support Functions, which are grouped under Swisscom Switzerland, as well as Fastweb and Other Operating Segments.

The Infrastructure & Support Functions segment does not charge network costs or management fees to other segments. Any other services between the segments are charged at market prices. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.

Segment expense encompasses the direct and indirect costs, which include personnel expense, other operating costs less capitalised costs of self-constructed assets and other income. Pension cost includes ordinary employer contributions. The difference between the ordinary employer contributions and the pension cost as provided for under IAS 19 is reported in the column “Eliminations”. In the first three months of 2021, an expense of CHF 13 million is disclosed under “Eliminations” as a pension cost reconciliation item in accordance with IAS 19 (prior year: CHF 15 million).

Leases between the segments are not recognised in the balance sheet in accordance with IFRS 16. The reported lease expense of the segments comprises depreciation and interest on leases excluding depreciation of indefeasible rights of use (IRU) of CHF 6 million (prior year: CHF 6 million) and the accounting for the rental of buildings between segments. The lease expense of assets of low value is presented as direct costs.

Capital expenditure consists of the purchase of property, plant and equipment and intangible assets and payments for indefeasible rights of use (IRU). In general, IRUs are paid in full at the beginning of the use and are classified as leases under IFRS 16. From an economic point of view, IRU payments will be considered as capital expenditure in the segment information. Capital expenditure in the first three months of 2021 included IRU payments of CHF 5 million (prior year: CHF 3 million).

Swisscom Switzerland sells some mobile handsets on a subsidised basis in a bundled offering with a mobile communications contract. As a result of the reallocation of revenue over the pre-delivered components (mobile handset), revenue is recognised earlier than the date of invoicing. This results in contract assets deriving from this business being recognised. In the segment reporting of Swisscom Switzerland, the recognition and dissolution of these contract assets is reported as other revenue. The amounts invoiced are reported under revenue from telecommunications services or merchandise.

Segment information 2021


2021, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   1,130   312       1,442
Business customers   764   259   104     1,127
Wholesale customers   173   61       234
Net revenue from external customers   2,067   632   104     2,803
Net revenue from other segments   13   2   136   (151)  
Net revenue   2,080   634   240   (151)   2,803
Direct costs   (447)   (231)   (18)   16   (680)
Indirect costs   (717)   (208)   (188)   114   (999)
Segment result before depreciation and amortisation   916   195   34   (21)   1,124
Lease expense   (58)   (14)   (3)     (75)
Depreciation and amortisation   (374)   (161)   (13)   4   (544)
Segment result   484   20   18   (17)   505
Interest expense on lease liabilities                   11
Operating income                   516
Financial income and financial expense, net                   224
Result of equity-accounted investees                  
Income before income taxes                   740
Income tax expense                   (102)
Net income                   638
                     
Segment result before depreciation and amortisation   916   195   34   (21)   1,124
Lease expense   (58)   (14)   (3)     (75)
Capital expenditure   (371)   (168)   (9)   8   (540)
Operating free cash flow proxy   487   13   22   (13)   509

Segment information Swisscom Switzerland 2021


2021, in CHF million
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   503   223         726
Mobile   465   182         647
Revenue other     15         15
Telecom services   968   420         1,388
Solutions business     273         273
Merchandise   147   65         212
Wholesale       173       173
Revenue other   15   1     5     21
Net revenue from external customers   1,130   759   173   5     2,067
Net revenue from other segments   19   19   70   14   (109)   13
Net revenue   1,149   778   243   19   (109)   2,080
Direct costs   (279)   (202)   (99)   (2)   135   (447)
Indirect costs   (171)   (238)   (6)   (276)   (26)   (717)
Segment result before depreciation and amortisation   699   338   138   (259)     916
Lease expense   (10)   (8)     (40)     (58)
Depreciation and amortisation   (14)   (17)     (342)   (1)   (374)
Segment result   675   313   138   (641)   (1)   484
                         
Capital expenditure   (3)   (10)     (358)     (371)

Segment information 2020


2020, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   1,120   300       1,420
Business customers   766   225   109     1,100
Wholesale customers   164   53       217
Net revenue from external customers   2,050   578   109     2,737
Net revenue from other segments   15   2   132   (149)  
Net revenue   2,065   580   241   (149)   2,737
Direct costs   (412)   (212)   (17)   15   (626)
Indirect costs   (744)   (187)   (182)   113   (1,000)
Segment result before depreciation and amortisation   909   181   42   (21)   1,111
Lease expense   (59)   (14)   (3)   1   (75)
Depreciation and amortisation   (377)   (153)   (15)   2   (543)
Segment result   473   14   24   (18)   493
Interest expense on lease liabilities                   11
Operating income                   504
Financial income and financial expense, net                   (37)
Result of equity-accounted investees                   1
Income before income taxes                   468
Income tax expense                   (74)
Net income                   394
                     
Segment result before depreciation and amortisation   909   181   42   (21)   1,111
Lease expense   (59)   (14)   (3)   1   (75)
Capital expenditure   (367)   (148)   (7)   6   (516)
Operating free cash flow proxy   483   19   32   (14)   520

Segment information Swisscom Switzerland 2020


2020, in CHF million, restated
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   505   226         731
Mobile   497   196         693
Revenue other     15         15
Telecom services   1,002   437         1,439
Solutions business     267         267
Merchandise   120   55         175
Wholesale       164       164
Revenue other   (2)   1     6     5
Net revenue from external customers   1,120   760   164   6     2,050
Net revenue from other segments   17   19   61   15   (97)   15
Net revenue   1,137   779   225   21   (97)   2,065
Direct costs   (248)   (195)   (89)   (1)   121   (412)
Indirect costs   (186)   (247)   (4)   (282)   (25)   (744)
Segment result before depreciation and amortisation   703   337   132   (262)   (1)   909
Lease expense   (11)   (8)     (40)     (59)
Depreciation and amortisation   (17)   (20)     (340)     (377)
Segment result   675   309   132   (642)   (1)   473
                         
Capital expenditure   (5)   (9)     (353)     (367)