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
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
From 4G to 5G: Alcatel-Lucent's Dave Geary

11|25|14   |   09:09   |   (0) comments


Dave Geary, President of Wireless at Alcatel-Lucent, talks about the evolution of the 4G market, small cells, partnerships, 5G and the IoT.
LRTV Huawei Video Resource Center
Building a Secure Telefonica Network With Huawei's High-End Firewall

11|24|14   |   4:37   |   (0) comments


Andrew Davies, IP architect of the Telefonica, a leading digital communications company, discusses the Huawei security gateway solution and putting the solution into the testbed.
LRTV Huawei Video Resource Center
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
LRTV Huawei Video Resource Center
Amsterdam ArenA as an Agile Campus

11|24|14   |   3:31   |   (0) comments


The Amsterdam ArenA, home of the Ajax soccer team, can be a crowded space. ArenA has partnered with Huawei to work on bringing ample bandwidth to 53,000 people at the same time.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Do You Have a 2020 Vision?
Dennis Mendyk, Vice President of Research, Heavy Reading, 11/21/2014
Operators Should Block Ads to Get Their Cut, Startup Says
Sarah Reedy, Senior Editor, 11/24/2014
$35B+ Spectrum Auction Dings Verizon, Shines Dish
Dan Jones, Mobile Editor, 11/24/2014
Like Us on Facebook
Twitter Feed