Swisscom Reports Slight Dip in Group Revenue During H1 2023

Swisscom, Switzerland’s leading telecommunications provider, announced a slight decline in group revenue during the first half of 2023.
Swisscom 5G networkAccording to their financial report, Swisscom Group’s revenue fell by 0.3 percent to CHF 5,450 million. The revenue from the Swiss core business also experienced a marginal decrease of 0.6 percent to CHF 4,044 million. However, the company’s revenue from IT services with business customers saw a positive growth of 1.6 percent, reaching CHF 583 million.

Telecommunications Services Revenue Decline, IT Services Show Growth

Swisscom faced challenges in its telecommunications services segment, as revenue from these services decreased by 1.2 percent to CHF 2,689 million. On the other hand, Swisscom witnessed growth in its IT services for business customers, where revenue increased by 1.6 percent to CHF 583 million.

Positive Development in Italy

Swisscom’s subsidiary in Italy, Fastweb, continued its positive development, reporting a year-on-year revenue growth of EUR 52 million, equivalent to 4.3 percent. Fastweb has shown consistent growth over the past decade, marking ten years of consecutive expansion at the end of the first half of 2023.

Consolidated Operating Income Sees Uptick

Despite the slight decline in revenue, Swisscom reported a 5.1 percent increase in consolidated operating income before depreciation and amortisation (EBITDA) compared to the previous year, reaching CHF 2,303 million.

Investment in Network Infrastructure

Swisscom continues to invest in its network infrastructure, with Capex (Capital Expenditure) across the Group amounting to CHF 1,113 million, a 5.7 percent increase compared to the previous year. The focus remains on the expansion of fiber-to-the-home (FTTH) connections to improve network quality, performance, and coverage.

Progress in 5G+ Coverage

Swisscom has made significant strides in the implementation of 5G+ technology, with more than 77 percent of the Swiss population now benefiting from 5G+ coverage. The demand for 5G-enabled devices in Switzerland has also increased, with 4.6 million such devices in operation as of June 2023.

Broadband Expansion Plans

The company aims to enhance broadband connectivity throughout Switzerland by employing point-to-point (P2P) architecture for new connections in its network expansion and converting existing point-to-multipoint (P2MP) connections to P2P. Swisscom plans to increase its fiber-optic coverage (FTTH) to approximately 55 percent by the end of 2025 and further expand it to 70-80 percent by 2030.

Stable Prices for Residential Customers

In the Residential Customers segment, Swisscom is maintaining stable prices for its blue subscriptions, internet, TV, and fixed network connections. Despite inflation, there will be no general price increases until the end of 2024. The number of Swisscom fixed-line broadband and TV connections has experienced slight declines, while postpaid Swisscom mobile lines increased year-on-year.

Business Customers Face Competition and Demand for IT Services

The market for business customers remains competitive, leading to a 3.1 percent decline in revenue from telecommunications services, reaching CHF 770 million. However, Swisscom has bolstered its IT services capacity by acquiring Axept Business Software AG, leading to a growth of 1.6 percent in IT services revenue during the first half of 2023, amounting to CHF 583 million.

Financial Outlook for 2023

Swisscom projects revenue in the range of CHF 11.1-11.2 billion, EBITDA between CHF 4.6-4.7 billion, and capital expenditure of approximately CHF 2.3 billion for the financial year 2023.

Despite the challenges faced in certain segments, Swisscom remains committed to advancing its network infrastructure and providing high-quality telecommunications and IT services to its customers in Switzerland and beyond.