Segment results

Swisscom’s reporting focuses on the operating divisions Swisscom Switzerland and Fastweb. The other business divisions are grouped together under Other Operating Segments. Swisscom Switzerland comprises the customer segments Residential Customers, Business Customers and Wholesale, along with the Infrastructure & Support Functions business division. Fastweb is a telecommunications provider for residential and business customers in Italy. Other Operating Segments primarily comprises the Digital Business division, Swisscom Broadcast Ltd (radio transmitters) and cablex Ltd (network construction and maintenance).

The Infrastructure & Support Functions business division does not charge any network costs or management fees to other segments for its services. The remaining services between the segments are charged at market prices. Network costs in Switzerland are budgeted, monitored and controlled by the Infrastructure & Support Functions segment, which is managed as a cost centre. For this reason, no revenue is credited to the Infrastructure & Support Functions segment within the segment reporting, with the exception of the rental and administration of buildings and vehicles. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.

Swisscom Switzerland

Swisscom Switzerland’s revenue decreased slightly by 0.6% or CHF 12 million to CHF 2,044 million. Revenue from telecoms services decreased by 1.2% or CHF 17 million to CHF 1,348 million. Of the decrease, CHF 12 million (–3.0%) is attributable to the Business Customers segment, while revenue from telecoms services in the Residential Customers segment remained almost stable at CHF 960 million (–0.5%). In contrast, revenue from IT services increased slightly by 0.7% to CHF 291 million. Market saturation is reflected in fewer connections and declining subscriber bases for broadband retail (–0.6%) and TV (–1.8%). Fixed network telephony (–7.6%) is significantly affected by its substitution with mobile telephony. In mobile telephony, the number of subscribers increased slightly (+0.4%), while the customer structure changed due to an increase in postpaid lines (+161,000) and a similarly strong decrease in prepaid connections (–135,000). The share of secondary and third-party brands in the Residential Customers segment rose from 24% to 29%.

The operating expense decreased by 2.2% or CHF 25 million. Direct costs remained almost stable. The costs for subscriber acquisition and retention increased, while the costs for purchasing services and merchandise decreased. Indirect costs fell by CHF 28 million (–4.0%). In telecommunications, cost savings of CHF 27 million were realised through efficiency improvement measures and optimised network maintenance. In the area of IT services, in­direct costs remained stable. Headcount fell by 1.2% to 12,841 FTEs. Operating profit before depreciation and amortisation (EBITDA) increased by 1.5% or CHF 13 million to CHF 943 million. The decline in revenue from telecoms services was more than compensated for thanks to ongoing cost-cutting measures.

Capital expenditure increased by 8.2% or CHF 30 million to CHF 394 million mainly due to transport networks. Swisscom plans to increase fibre-optic coverage (FTTH) to around 55% by the end of 2025, and to 70–80% by 2030.

Fastweb

Fastweb’s revenue rose year-on-year by 4.7% or EUR 28 million to EUR 623 million. Competition remained fierce. The customer base in the fixed-network business (end-customer and wholesale) grew by 2.1% to 3.16 million. While this fell by 2.5% to 2.66 million in the end-customer business as a result of the value strategy pursued by Fastweb and because of the challenging market environment, the number of ultra-fast broadband connections provided by Fastweb to other operators rose to 498,000 (+37.2%). Among end customers, the share of ultra-fast broadband connections increased by 4 percentage points to 87%. The number of mobile access lines increased by 582,000 (+22.0%) to 3.2 million, with bundled offerings continuing to play an important role here. 41% of broadband customers used a bundled offering combining fixed network and mobile. Revenue from residential customers increased by 1.4% or EUR 4 million to EUR 289 million, mainly as a result of the greater mobile customer base. Revenue from business customers increased by 5.7% or EUR 14 million to EUR 261 million, driven by the strong market position in the area of public administration. Revenue from wholesale business increased by 14.5% or EUR 9 million to EUR 71 million due to the higher number of subscribers.

Operating expenses increased by EUR 25 million (+6.1%). Driven by revenue growth, the operating result before depreciation and amortisation (EBITDA) increased by EUR 3 million (+1.6%). Capital expenditure fell by 2.5% to EUR 153 million due to a decrease in customer-driven investment. Headcount increased by 12.8% or 350 FTEs to 3,087 FTEs as the company took on external staff and the growth created a need for more personnel.

Other Operating Segments

Revenue in Other Operating Segments remained almost stable year-on-year at CHF 243 million (+0.8%). Due to higher costs, the operating result before depreciation and amortisation (EBIDTA) decreased by 19% or CHF 8 million to CHF 34 million, and the profit margin shrank accordingly to 14.0% (prior year: 17.4%). Headcount increased by 1.6% or 51 FTEs to 3,324 FTEs, partly as the result of an acquisition.