BERN, Switzerland -- Net revenue posted by the Swisscom Group fell by 2.9% in the first quarter of 2006 to CHF 2.45 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) by 5.3% to CHF 1.03 billion. As in the second half of 2005 this development is primarily due to one-time effects. Adjusted for these special effects, revenue from ordinary activities rose by 1.7% while EBITDA fell by 1.1%. Swisscom recorded a strong increase in ADSL customer numbers in the fixed network and mobile alongside a sharp fall in minute rates. The Group still expects to post net revenue of around CHF 9.5 billion and EBITDA of around CHF 4.0 billion for the 2006 financial year.

Table 1:

Net revenue as per 31 March 2006 fell by CHF 70 million or 2.9% to CHF 2,375 million year-on year, while EBITDA dropped by CHF 58 million or 5.3% to CHF 1,034 million. This decrease can primarily be attributed to the following special factors: The table below contains an overview of these changes:

Table 2:

Excluding the four one-off effects indicated above, net revenue rose on a like-for-like basis by CHF 40 million or 1.7%, while EBITDA fell by CHF 11 million or 1.1%.

As part of its inquiry concerning the mobile market, the Secretariat of the Competition Commission asked Swisscom Mobile to issue a statement on a draft ordinance containing a sanction against the alleged misuse of termination charges totalling CHF 489 million. As communicated previously on 10 April 2006, Swisscom disputes these allegations of market dominance and misuse of charges. Backed up by legal clarification, Swisscom believes that the prospect of an appeals procedure being successful is intact. No provision has therefore been established.

Net income of the Swisscom Group after deduction of minority interests decreased by 11.5% to CHF 460 million due to lower operating income and a reduced net financial result. As a result of last year's share buyback programme and the subsequent decrease in the number of shares, earnings per share saw a more modest decrease than net income, falling 4.1% to CHF 8.11.

Swisscom AG (NYSE: SCM)