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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’s 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 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 six months of 2021, income of CHF 36 million is disclosed under ‘Eliminations’ as a pension cost reconciliation item in accordance with IAS 19 (prior year: expense CHF 31 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 12 million (prior year: CHF 12 million) and the accounting for the rental of buildings between segments. In addition, lease expense of the previous year’s segments do not include impairments on right-of-use assets amounting to CHF 7 million. 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 six months of 2021 includes IRU payments of CHF 5 million (prior year: CHF 6 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   2,235   629       2,864
Corporate customers   1,511   526   216     2,253
Wholesale customers   332   134       466
Net revenue from external customers   4,078   1,289   216     5,583
Net revenue from other segments   25   4   289   (318)  
Net revenue   4,103   1,293   505   (318)   5,583
Direct costs   (867)   (476)   (36)   29   (1,350)
Indirect costs   (1,439)   (397)   (386)   306   (1,916)
Segment result before depreciation and amortisation   1,797   420   83   17   2,317
Lease expense   (117)   (29)   (6)   1   (151)
Depreciation and amortisation   (757)   (320)   (27)   5   (1,099)
Segment result   923   71   50   23   1,067
Interest expense on lease liabilities                   22
Operating income                   1,089
Financial income and financial expense, net                   162
Result of equity-accounted investees                   (4)
Income before income taxes                   1,247
Income tax expense                   (201)
Net income                   1,046
                     
Segment result before depreciation and amortisation   1,797   420   83   17   2,317
Lease expense   (117)   (29)   (6)   1   (151)
Capital expenditure   (753)   (330)   (19)   19   (1,083)
Operating free cash flow proxy   927   61   58   37   1,083

Segment information Swisscom Switzerland 2021


2021, in CHF million
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,001   438         1,439
Mobile   928   361         1,289
Revenue other     31         31
Telecom services   1,929   830         2,759
Solutions business     547         547
Merchandise   267   119         386
Wholesale       332       332
Revenue other   39   4     11     54
Net revenue from external customers   2,235   1,500   332   11     4,078
Net revenue from other segments   38   37   141   28   (219)   25
Net revenue   2,273   1,537   473   39   (219)   4,103
Direct costs   (534)   (400)   (200)   (3)   270   (867)
Indirect costs   (334)   (472)   (11)   (571)   (51)   (1,439)
Segment result before depreciation and amortisation   1,405   665   262   (535)     1,797
Lease expense   (20)   (16)     (80)   (1)   (117)
Depreciation, amortisation and impairment losses   (27)   (34)     (697)   1   (757)
Segment result   1,358   615   262   (1,312)     923
                         
Capital expenditure   (9)   (21)     (723)     (753)

Segment information


2020, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   2,200   599       2,799
Corporate customers   1,531   464   215     2,210
Wholesale customers   322   112       434
Net revenue from external customers   4,053   1,175   215     5,443
Net revenue from other segments   31   4   272   (307)  
Net revenue   4,084   1,179   487   (307)   5,443
Direct costs   (819)   (429)   (32)   28   (1,252)
Indirect costs   (1,484)   (361)   (373)   235   (1,983)
Segment result before depreciation and amortisation   1,781   389   82   (44)   2,208
Lease expense   (117)   (27)   (6)     (150)
Depreciation and amortisation   (766)   (305)   (30)   4   (1,097)
Segment result   898   57   46   (40)   961
Interest expense on lease liabilities                   22
Operating income                   983
Financial income and financial expense, net                   (104)
Result of equity-accounted investees                   3
Income before income taxes                   882
Income tax expense                   (146)
Net income                   736
                     
Segment result before depreciation and amortisation   1,781   389   82   (44)   2,208
Lease expense   (117)   (27)   (6)     (150)
Capital expenditure   (776)   (294)   (18)   13   (1,075)
Operating free cash flow proxy   888   68   58   (31)   983

Segment information Swisscom Switzerland


2020, in CHF million, restated
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,005   453         1,458
Mobile   975   385         1,360
Revenue other     30         30
Telecom services   1,980   868         2,848
Solutions business     527         527
Merchandise   228   122         350
Wholesale       322       322
Revenue other   (8)   3     11     6
Net revenue from external customers   2,200   1,520   322   11     4,053
Net revenue from other segments   38   37   127   31   (202)   31
Net revenue   2,238   1,557   449   42   (202)   4,084
Direct costs   (483)   (398)   (184)   (4)   250   (819)
Indirect costs   (369)   (483)   (8)   (577)   (47)   (1,484)
Segment result before depreciation and amortisation   1,386   676   257   (539)   1   1,781
Lease expense   (22)   (17)     (78)     (117)
Depreciation and amortisation   (39)   (38)     (688)   (1)   (766)
Segment result   1,325   621   257   (1,305)     898
                         
Capital expenditure   (12)   (17)     (747)     (776)