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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 nine months of 2021, a gain of CHF 25 million is disclosed under ‘Eliminations’ as a pension cost reconciliation item in accordance with IAS 19 (prior year: expense of CHF 47 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 18 million (prior year: CHF 18 million) and the accounting for the rental of buildings between segments. In addition, the leasing expenses of the previous year’s segments do not include allowances 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 nine months of 2021 includes IRU payments of CHF 11 million (prior year: CHF 11 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


1.01.–30.09.2021, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   3,366   934       4,300
Corporate customers   2,246   776   326     3,348
Wholesale customers   498   197       695
Net revenue from external customers   6,110   1,907   326     8,343
Net revenue from other segments   40   7   444   (491)  
Net revenue   6,150   1,914   770   (491)   8,343
Direct costs   (1,321)   (702)   (56)   48   (2,031)
Indirect costs   (2,153)   (556)   (578)   440   (2,847)
Segment result before depreciation and amortisation   2,676   656   136   (3)   3,465
Lease expense   (174)   (43)   (9)     (226)
Depreciation, amortisation and impairment losses   (1,120)   (480)   (40)   8   (1,632)
Segment result   1,382   133   87   5   1,607
Interest expense on lease liabilities                   33
Operating income                   1,640
Financial income and financial expense, net                   138
Result of equity-accounted investees                   (5)
Income before income taxes                   1,773
Income tax expense                   (237)
Net income                   1,536
                     
Segment result before depreciation and amortisation   2,676   656   136   (3)   3,465
Lease expense   (174)   (43)   (9)     (226)
Capital expenditure   (1,125)   (479)   (29)   28   (1,605)
Operating free cash flow proxy   1,377   134   98   25   1,634

Segment information Swisscom Switzerland 2021


1.01.–30.09.2021, in CHF million
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,491   652         2,143
Mobile   1,396   537         1,933
Revenue other     46         46
Telecom services   2,887   1,235         4,122
Solutions business     821         821
Merchandise   399   168         567
Wholesale       498       498
Revenue other   80   6     16     102
Net revenue from external customers   3,366   2,230   498   16     6,110
Net revenue from other segments   57   55   241   41   (354)   40
Net revenue   3,423   2,285   739   57   (354)   6,150
Direct costs   (821)   (599)   (326)   (5)   430   (1,321)
Indirect costs   (494)   (698)   (15)   (869)   (77)   (2,153)
Segment result before depreciation and amortisation   2,108   988   398   (817)   (1)   2,676
Lease expense   (30)   (24)     (120)     (174)
Depreciation, amortisation and impairment losses   (39)   (50)     (1,032)   1   (1,120)
Segment result   2,039   914   398   (1,969)     1,382
                         
Capital expenditure   (16)   (30)     (1,079)     (1,125)

Segment information 2020


1.01.–30.09.2020, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   3,320   903       4,223
Corporate customers   2,276   707   329     3,312
Wholesale customers   490   176       666
Net revenue from external customers   6,086   1,786   329     8,201
Net revenue from other segments   44   6   426   (476)  
Net revenue   6,130   1,792   755   (476)   8,201
Direct costs   (1,251)   (648)   (51)   44   (1,906)
Indirect costs   (2,200)   (536)   (566)   363   (2,939)
Segment result before depreciation and amortisation   2,679   608   138   (69)   3,356
Lease expense   (175)   (42)   (9)     (226)
Depreciation, amortisation and impairment losses   (1,139)   (462)   (46)   6   (1,641)
Segment result   1,365   104   83   (63)   1,489
Interest expense on lease liabilities                   34
Operating income                   1,523
Financial income and financial expense, net                   (113)
Result of equity-accounted investees                   4
Income before income taxes                   1,414
Income tax expense                   (248)
Net income                   1,166
                     
Segment result before depreciation and amortisation   2,679   608   138   (69)   3,356
Lease expense   (175)   (42)   (9)     (226)
Capital expenditure   (1,186)   (439)   (30)   23   (1,632)
Operating free cash flow proxy   1,318   127   99   (46)   1,498

Segment information Swisscom Switzerland 2020


1.01.–30.09.2020, in CHF million, restated
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,505   676         2,181
Mobile   1,460   575         2,035
Revenue other     45         45
Telecom services   2,965   1,296         4,261
Solutions business     786         786
Merchandise   355   171         526
Wholesale       490       490
Revenue other     6     17     23
Net revenue from external customers   3,320   2,259   490   17     6,086
Net revenue from other segments   56   56   237   46   (351)   44
Net revenue   3,376   2,315   727   63   (351)   6,130
Direct costs   (750)   (594)   (324)   (7)   424   (1,251)
Indirect costs   (557)   (705)   (12)   (853)   (73)   (2,200)
Segment result before depreciation and amortisation   2,069   1,016   391   (797)     2,679
Lease expense   (33)   (25)     (117)     (175)
Depreciation, amortisation and impairment losses   (54)   (57)     (1,028)     (1,139)
Segment result   1,982   934   391   (1,942)     1,365
                         
Capital expenditure   (19)   (27)     (1,140)     (1,186)