Swisscom, Switzerland’s leading telecommunications provider, continues to demonstrate its financial resilience in the face of market challenges.
Swisscom’s commitment to cutting-edge technology is evident through their substantial investments. With a focus on network infrastructure, the company allocated CHF 1,630 million, a 1.8 percent increase from the previous year. This investment, which includes expanding their fiber-optic network (FTTH), ensures the high quality, coverage, and performance of their services.
Swisscom’s capital expenditure in Switzerland, its home market, rose by 3.1 percent or CHF 36 million to CHF 1,197 million mainly due to the expansion and upgrading of transport networks. Swisscom plans to increase fibre-optic coverage (FTTH) to around 55 percent by the end of 2025, and to 70–80 percent by 2030.
The capital expenditure of Fastweb, Swisscom’s subsidiary in Italy, was EUR 445 million (–0.9 percent) during the third quarter.
Despite a slightly lower revenue in the Swiss core business, Swisscom reported a 0.3 percent rise in group revenue to CHF 8,202 million. In the Swiss core business, revenue dipped by 0.6 percent to CHF 6,067 million, primarily influenced by a 1.4 percent decrease in telecommunications services revenue. However, the decline was offset by a 2.6 percent rise in revenue from IT services for business customers, amounting to CHF 877 million. The drop in revenue suggests a competitive market environment or shifts in customer preferences that impact the company’s traditional services.
Fastweb, Swisscom’s subsidiary in Italy, showcased impressive growth, with a 6.0 percent increase in revenue, reaching EUR 1,911 million. The company’s strategic approach in the mobile telephony market led to a 16.7 percent rise in connections, contributing significantly to overall revenue.
Swisscom’s customer base remained robust, with 6.20 million mobile lines and 2.01 million fixed-line broadband connections in Switzerland. Notably, 2.04 million residential customers embraced blue subscriptions, accounting for 49 percent of all mobile subscriptions and 81 percent of fixed-line broadband connections. Fastweb’s fixed-network business expanded by 2.5 percent to 3.19 million customers, driven by a 16.7 percent increase in mobile access lines and a 38.5 percent rise in ultra-fast broadband connections.
Swisscom CEO Christoph Aeschlimann, said in its earnings report, said: “In the first nine months of this year, we achieved strong customer satisfaction and excellent financial results, with higher operating income.”
The report indicates market saturation, particularly in areas like fixed-line broadband and TV connections, which saw declines of 0.9 percent and 2.2 percent respectively. Additionally, the substitution of fixed-line telephony with mobile services (-7.5 percent) reflects changing customer habits, posing a challenge for Swisscom to adapt and innovate to meet evolving demands.
Despite a drop in revenue, the company managed a 0.4 percent increase in EBITDA in the Swiss core business, showcasing their adeptness at balancing revenue challenges with cost-effective measures.
Swisscom’s commitment to environmental sustainability is exemplified by their achievement in reducing carbon emissions. Together with their customers, they avoided almost 1.2 million tonnes of CO2 emissions, surpassing their 2025 target. Their initiatives in flexible working, IoT, energy-efficient data centers, and the circular economy contributed significantly to this achievement.
Despite challenges such as a strong Swiss franc and lower hardware sales, Swisscom remains optimistic about their financial outlook. They slightly adjusted their revenue forecast for 2023 to about CHF 11.0 billion.
Swisscom said the expectations for EBITDA of CHF 4.6 to 4.7 billion and capital expenditure of CHF 2.3 billion remain unchanged for 2023.
The telecommunications industry remains highly competitive, characterized by price pressures and technological advancements. This intense competition can impact pricing strategies, profit margins, and customer acquisition efforts, requiring Swisscom to continuously differentiate itself and invest in innovative solutions to stay ahead.
As technology continues to advance, Swisscom must continually invest in upgrading its network infrastructure and services to meet the growing demands of consumers. Balancing the need for significant investments with maintaining profitability poses a delicate challenge for the company.
Rajani Baburajan
