Swisscom to focus on cost optimization and investment this year

Swisscom tower in SwitzerlandTelecom operator Swisscom last week said the main focus of the company will be on cost optimization and network investment this year.

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Switzerland-based Swisscom reported revenue of CHF 11,662 million (+0.2 percent), service revenue of CHF 9,058 million (–2.1 percent), EBITDA of CHF 4,295 million (–0.5 percent) in 2017.

The Swiss core business fell 2.4 percent, due to dip in fixed-line connections, pressure on pricing, increased inclusion of roaming in the basic charge and low subscription growth in a saturated market.

Swisscom reduced its Group-wide headcount to 20,506 as part of its strategy to bring down cost. Swisscom has slashed its employee base by 684 to 17,688 FTEs in Switzerland, the company headquarter.

Swisscom has made an investment of CHF 2,378 million towards its network infrastructure last year. Capex of CHF 1,678 million or 71 percent of the total Capex was in Switzerland. The share of capital expenditure as a proportion of revenue stands at 20.4 percent against 20.8 percent in the previous year.

Swisscom connected 3.9 million households and businesses with broadband with speeds of more than 50 Mbps including 2.5 million with more than 100 Mbps speed. Swisscom will make investment to make fibre-optic technology available to every Swiss municipality by the end of 2021.

Swisscom said digitisation of the fixed telephone network (All-IP technology) is running according to plan. Over two million customers are already profiting from HD voice quality, personalised block lists, automatic caller identification and an automatic filter for blocking unwanted advertising calls.

The company during an analyst call said work started on the full migration of customer lines to IP in the larger regions of Switzerland at the start of 2018, which will allow us to push forward with the decommissioning of the old infrastructure in these locations.

More than 99 percent of all Swisscom customers benefit from the modern 4G/LTE network. Swisscom covers 80 percent of the Swiss population with LTE advanced with speeds of up to 300 Mbps. 60 percent of the Swiss population can also achieve speeds of up to 450 Mbps.

In 2017, Swisscom increased surfing speeds to 1 Gbps, creating additional capacities. Eleven Swiss cities are already selectively taking advantage of this.

Swisscom will augment its mobile phone network with 5G from 2020 onwards.

The company said capital expenditure at Fastweb grew by 7.1 percent to EUR 622 million due to accelerated broadband expansion. Fastweb’s network now extends to eight million households (+500,000 year-on-year) in some 100 Italian towns and cities.

Swisscom is raising the cost cutting target to CHF 100 million per year in Switzerland between 2018 and 2020 against CHF 60 million per year by 2020 announced in February 2016.

Swisscom continues to cut costs mainly by simplifying workflows and reducing the number of positions in declining divisions. In contrast, the company will be adding new positions in growth areas such as the cloud and security.

Swisscom will cut headcount to around 17,000 FTEs in Switzerland by slashing around 700 jobs.

Swisscom last week made the forecast: revenue of CHF 11.6 billion, EBITDA of CHF 4.2 billion and capital expenditure of CHF 2.4 billion for 2018.