Light Reading
Sharp decline in traditional business not quite offset by growth areas

Swisscom Makes CHF1.38B Profit Jan-Sept

Light Reading
News Wire Feed
Light Reading
11/8/2012
50%
50%

BERNE, Switzerland -- In the first nine months of 2012 Swisscom posted a fall in net revenue of CHF 111 million or 1.3% to CHF 8,427 million and a drop in operating income before depreciation and amortisation (EBITDA) of CHF 157 million or 4.5% to CHF 3,363 million. On a like-for-like basis and at constant exchange rates, revenue was down by 0.3%, EBITDA fell by 0.7% and net income fell by 1.2%. Also on a like-for-like basis, net revenue in the Swiss business was slightly down versus the prior year (–0.4%) to CHF 6,862 million, while operating income (EBITDA) in the Swiss business also reported a year-on-year decline of 0.4% to CHF 2,931 million. Price erosion amounting to CHF 280 million was almost offset by growth businesses. Capital expenditure in Switzerland was up 36.1% to CHF 1,458 million due to the expansion of broadband networks and costs associated with the mobile frequency auction. Fastweb is on track, with revenue increasing to EUR 1,190 million in local currency (+0.3%) and EBITDA rising to EUR 355 million (+1.1%) on a like-for-like basis. The customer base grew by 144,000 or 9.2% to 1.7 million year-on-year. As a result of one-time restructuring costs amounting to CHF 50 million, Swisscom has revised its EBITDA slightly down for the full year to CHF 4.35 billion. All the Group's other financial projections for full-year 2012 remain unchanged. If all targets are met, Swisscom will again propose a dividend of CHF 22 per share for the 2012 financial year at the next Annual General Meeting.

Swisscom posted a fall in net revenue in the first nine months of 2012 of CHF 111 million or 1.3% to CHF 8,427 million and a drop in operating income before depreciation and amortisation (EBITDA) of CHF 157 million or 4.5% to CHF 3,363 million. The Group's net income declined by CHF 141 million or 9.2% to CHF 1,387 million due to non-recurring items. On a like-for-like basis and at constant exchange rates, revenue was down by 0.3%, EBITDA fell by 0.7% and net income fell by 1.2%. Swisscom's capital expenditure increased by CHF 388 million or 26.5% to CHF 1,853 million.

In the Swiss business, Swisscom posted net revenue of CHF 6,862 million (–0.4%) and EBITDA of CHF 2,931 million (–2.2%). Adjusted for non-recurring expenses, EBITDA for the Swiss business posted a year-on-year decline of 0.4% on a like-for-like basis. Capital expenditure in Switzerland was up CHF 387 million or 36.1% to CHF 1,458 million due to the expansion of broadband networks and costs of CHF 360 million in connection with the mobile frequency auction in the first quarter of 2012.

Sharp decline in traditional business almost offset
Price erosion in the Swiss market amounting to CHF 280 million was almost offset by growth businesses worth CHF 255 million. The trend towards bundled offerings and new price models such as flat-rate tariffs continued during the reporting period. At the end of September, 739,000 customers (+31.3% or +176,000 year-on-year) were already taking advantage of Swisscom's combined offerings such as Vivo Casa and Vivo Tutto, which comprise fixed line access with telephony, Internet and TV or an additional mobile line.

The new Natel infinity mobile subscriptions launched by Swisscom in June 2012, which allow unlimited calling, texting and Internet on all networks, met with a very positive response from customers. At the end of October 2012 630,000 customers were already taking advantage of these new Infinity offerings. The decline in average revenue per user (ARPU) among customers who have switched to Natel infinity is currently CHF 6 per month on average. Swisscom expects the decline in ARPU to continue to slow over the next few months.

The number of mobile lines grew by 173,000 or 2.9% to 6.2 million versus the prior year. The number of postpaid customers grew by 60,000 in the third quarter (single subscriptions and bundled offerings), while the number of prepaid customers fell by 21,000. In the first nine months of 2012 Swisscom sold 998,000 mobile handsets (+1.0%), around 66% of which were smartphones. The number of Swisscom TV connections increased year-on-year by 172,000 or 30.9% to 728,000 (+34,000 in the third quarter). The number of fixed line broadband connections rose by 73,000 or 4.5% to 1.71 million versus September 2011 (+14,000 in the third quarter).

Fastweb grows customer base to 1.7 million
Fastweb increased net revenue excluding hubbing (wholesale revenue from interconnection services) by 0.3% to EUR 1,190 million in local currency. Adjusted for non-recurring income of EUR 56 million resulting from the settlement of a legal dispute with another telecoms provider in 2011, the segment result before depreciation and amortisation rose by 1.1% to EUR 355 million. Fastweb's customer base grew by 144,000 or 9.2% to 1.7 million in the space of a year (+31,000 in the third quarter). Fastweb has posted three times more net customer gains in 2012 than in 2011. The bundled TV and broadband offering launched a year ago in partnership with Sky Italia has attracted 123,000 customers to date.

Financial outlook adjusted for EBITDA
As a result of non-recurring costs amounting to CHF 50 million in connection with the changes in headcount, Swisscom has revised its EBITDA figure down for the full-year from CHF 4.4 billion to CHF 4.35 billion. Other financial projections for full-year 2012 remain unchanged. Swisscom expects net revenue of CHF 11.3 billion and capital expenditure of up to CHF 2.2 billion (excluding expenditure on mobile frequencies amounting to CHF 360 million). Excluding low-margin wholesale business (hubbing), Fastweb expects revenue to remain stable at EUR 1.6 billion. Fastweb is expected to close 2012 with slightly higher EBITDA and slightly lower capital expenditure compared with 2011. If all targets are met, Swisscom will again propose a dividend of CHF 22 per share for the 2012 financial year at the next Annual General Meeting.

Swisscom AG (NYSE: SCM)

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Huawei Video Resource Center
The Inaugural Optical Innovation Forum in Nice

9|2|14   |     |   (0) comments


More than 170 attendees from network operators, service providers, analyst firms, and component companies from around the world convened in Nice in June for the inaugural Optical Innovation Forum, co-produced by Huawei and Light Reading.
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Hot Topics
Nokia's Maps Land on Samsung Devices
Sarah Reedy, Senior Editor, 8/29/2014
Now Google Planning Drones-to-Go
Dan Jones, Mobile Editor, 8/29/2014
Music to My Mobile
Sarah Reedy, Senior Editor, 8/28/2014
Be Open to the Freedom of Openness
Kelly Herrell, 8/29/2014
Netflix to FCC: Kill Comcast-TWC Deal
Alan Breznick, Cable/Video Practice Leader, 8/28/2014
Like Us on Facebook
Twitter Feed