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DSL/vectoring/G.fast

Swisscom Reports Q3

BERN, Switzerland -- Swisscom's financial statement at the end of the first nine months is characterised by increasing customer numbers, the takeover of Fastweb and special effects: revenue rose 12.3% to CHF 8.08 billion and operating income (EBITDA) increased 14.7% to CHF 3.28 billion. After adjustments for the takeover of Fastweb and special effects in the previous year, Swisscom's business proved stable: compared to the same period in the previous year, net revenue rose 0.3%, with just a slight 0.9% drop in EBITDA, despite the costs associated with new product launches and the development of new business segments. Due to the repurchase from Vodafone of a 25% stake in Swisscom Mobile in December 2006, net income after deducting minority interests rose 32.4% to CHF 1.63 billion. The financial outlook for the 2007 business year as a whole remains unchanged.

Table 1:
1.1.-30.9.2006 1.1.-30.9.2007 Change
Net revenue (in CHF millions) 7,196 8,082 12.3%
EBITDA (in CHF millions) 2,855 3,275 14.7%
EBIT (in CHF millions) 1,809 1,963 8.50%
Net income (in CHF millions)* 1,229 1,627 32.4%
Operating Free Cash Flow (in CHF millions)**) 1,685 1,602 -4.9%
Swisscom fixed lines (at 30.9., in millions) 5.06 5.25 3.8%
Of which DSL (at 30.9., in millions) 1.31 1.56 19.4%
Mobile lines (at 30.9., in millions) 4.56 4.89 7.3%
Fastweb customers (at 30.9., in millions) - 1.25 -
Capital expenditure (in CHF millions) 852 1,343 57.6%
Em! ployees (FTEs at 30.9.) 16,875 19,658 16.5%
* After deduction of minority interests
** EBITDA - Capital expenditure - changes in net working capital - payments to minorities




Excluding Fastweb, net revenues for the third quarter of 2007 stood at CHF 2,402 million, 0.9% lower than the previous year's figure. Continued growth in the number of customers with broadband and mobile lines as well as growth in the project and outsourcing business with corporate customers and other new business segments was not able to offset declining revenues in the traditional fixed-line business. In a quarterly comparison, operating income (EBITDA) rose by CHF 191 million (+18.3%) to CHF 1,233 million. The increase in EBITDA is largely due to the takeover of Fastweb (CHF 156 million). Excluding this effect, EBITDA rose by CHF 35 million (+3.4%), mainly as a result of the excellent market development in the mobile and business customer segment, as well as cost savings.

CHF 8,082 million in cumulative revenues was generated during the first nine months of 2007, 12.3% higher than the previous year's figure. Due to the takeover of Fastweb and special effects in the previous year, operating results (EBITDA) rose by CHF 420 million to CHF 3,275 million (+14.7%). On a like-for-like basis excluding special effects, EBITDA fell by CHF 26 million (-0.9%). The main reasons behind this drop are the costs of new product launches and the development of new business segments such as Bluewin TV. A pre-tax profit of CHF 157 million resulted from the sale of the subsidiary Antenna Hungária.

Due to the repurchase from Vodafone of a 25% stake in Swisscom Mobile in December 2006, net income after deducting minority interests rose to CHF 1,627 billion, 32.4% higher than the previous year. The absence of Vodafone's minority interest in Swisscom Mobile coupled with last year's share buy-back programme and the resultant reduction in the average number of shares led to earnings per share of CHF 31.41, an increase of 44.3%.

Swisscom AG (NYSE: SCM)

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