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2 Segment information

Changes in segment reporting

Swisscom has simplified its internal settlement as of 1 January 2022. The costs for roaming calls and for termination on networks of other telecommunications providers are no longer charged to the Residential Customers and Business Customers segments, but remain in the Wholesale segment. In turn, proceeds from termination on Swisscom’s network are no longer credited to the Residential Customers and Business Customers segments, but likewise remain in the Wholesale segment. In addition, Swisscom has reassigned various areas within Swisscom Switzerland among the segments as of 1 January 2022. The prior year’s figures were restated as follows:

In CHF million   Reported   Adjustment   Restated
             
Net revenue 2021 financial year
Residential Customers   4,592   (47)   4,545
Business Customers   3,058   (27)   3,031
Wholesale   971   (317)   654
Infrastructure & Support Functions   76     76
Elimination   (464)   391   (73)
Swisscom Switzerland   8,233     8,233
Fastweb   2,583     2,583
Other Operating Segments   1,033     1,033
Elimination   (666)     (666)
Total net revenue   11,183     11,183
             
Segment result 2021 financial year
Residential Customers   2,676   145   2,821
Business Customers   1,189   88   1,277
Wholesale   524   (227)   297
Infrastructure & Support Functions   (2,644)   (6)   (2,650)
Elimination   1     1
Swisscom Switzerland   1,746     1,746
Fastweb   197     197
Other Operating Segments   99     99
Elimination   (20)     (20)
Total segment result   2,022     2,022

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 any network costs or management fees for its services 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 2022, expenses of CHF 30 million were disclosed under ‘Eliminations’ as a pension cost reconciliation item in accordance with IAS 19 (prior year: income of CHF 36 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 right-of-use assets excluding depreciation on indefeasible rights of use (IRU) of CHF 10 million (prior year: CHF 12 million) as well as 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 six months of 2022 includes IRU payments of CHF 6 million (prior year: CHF 5 million).

Swisscom Switzerland sometimes sells mobile handsets at a subsidised rate as part of a bundled offering with a mobile 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 2022


1.1.–30.6.2022, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   2,231   587       2,818
Corporate customers   1,541   510   206     2,257
Wholesale customers   290   129       419
Net revenue from external customers   4,062   1,226   206     5,494
Net revenue from other segments   32   4   294   (330)  
Net revenue   4,094   1,230   500   (330)   5,494
Direct costs   (847)   (426)   (34)   35   (1,272)
Indirect costs   (1,499)   (391)   (383)   242   (2,031)
Segment result before depreciation and amortisation   1,748   413   83   (53)   2,191
Lease expense   (111)   (30)   (5)     (146)
Depreciation and amortisation   (747)   (306)   (23)   8   (1,068)
Segment result   890   77   55   (45)   977
Interest expense on lease liabilities                   22
Operating income                   999
Financial income and financial expense, net                   (13)
Result of equity-accounted investees                   (1)
Income before income taxes                   985
Income tax expense                   (200)
Net income                   785
                     
Segment result before depreciation and amortisation   1,748   413   83   (53)   2,191
Lease expense   (111)   (30)   (5)     (146)
Capital expenditure   (755)   (306)   (14)   22   (1,053)
Operating free cash flow proxy   882   77   64   (31)   992

Segment information Swisscom Switzerland 2022


1.1.–30.6.2022, in CHF million
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,005   421         1,426
Mobile   922   374         1,296
Telecom services   1,927   795         2,722
Solutions business     589         589
Merchandise   244   148         392
Wholesale       290       290
Revenue other   60       9     69
Net revenue from external customers   2,231   1,532   290   9     4,062
Net revenue from other segments   8   25   6   27   (34)   32
Net revenue   2,239   1,557   296   36   (34)   4,094
Direct costs   (423)   (371)   (131)   (4)   82   (847)
Indirect costs   (342)   (493)   (9)   (608)   (47)   (1,499)
Segment result before depreciation and amortisation   1,474   693   156   (576)   1   1,748
Lease expense   (19)   (15)     (77)     (111)
Depreciation   (30)   (36)     (681)     (747)
Segment result   1,425   642   156   (1,334)   1   890
                         
Capital expenditure   (17)   (22)     (717)   1   (755)

Segment information 2021


1.1.–30.6.2021, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
Residential customers   2,242   629       2,871
Corporate customers   1,511   526   216     2,253
Wholesale customers   325   134       459
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


1.1.–30.6.2021, in CHF million, restated
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   1,004   439         1,443
Mobile   929   394         1,323
Telecom services   1,933   833         2,766
Solutions business     547         547
Merchandise   266   119         385
Wholesale       325       325
Revenue other   43   1     11     55
Net revenue from external customers   2,242   1,500   325   11     4,078
Net revenue from other segments   7   23   4   28   (37)   25
Net revenue   2,249   1,523   329   39   (37)   4,103
Direct costs   (450)   (346)   (156)   (3)   88   (867)
Indirect costs   (335)   (469)   (9)   (575)   (51)   (1,439)
Segment result before depreciation and amortisation   1,464   708   164   (539)     1,797
Lease expense   (20)   (16)     (80)   (1)   (117)
Depreciation and amortisation   (27)   (34)     (697)   1   (757)
Segment result   1,417   658   164   (1,316)     923
                         
Capital expenditure   (9)   (21)     (723)     (753)