Swisscom : resists price pressure and strong competition – growth at Fastweb

In view of the compensation from Telecom Italia and higher levels of capital expenditure in the broadband network in Switzerland, Swisscom is adjusting its forecast for 2016. While Swisscom continues to expect net revenue of more than CHF 11.6 billion, it now anticipates EBITDA of around CHF 4.25 billion (previously: around CHF 4.2 billion) and capital expenditure of around CHF 2.4 billion (previously: more than CHF 2.3 billion). Subject to achieving its targets, Swisscom will propose an unchanged dividend of CHF 22 per share for the 2016 financial year at the 2017 Annual General Meeting.

Since 1 January 2016, Swisscom has reorganised its Group structure, which is now geared more firmly towards the challenges and opportunities of digitisation. In the wake of the efficiency improvement measures, Swisscom has announced a slightly lower headcount for 2016. The Group's headcount fell accordingly, by 43 FTEs or 0.2% to 21,443 FTEs. Adjusted for company acquisitions, headcount fell by 0.7%. At the end of June, Swisscom had a headcount of 18,754 FTEs (-0.4%) in Switzerland.

Infrastructure: Sustained high level of capital expenditure, switch to IP proceeding according to plan

According to a recent study by the Federal Institute of Technology Lausanne (EPFL), Switzerland is operating at an extremely competitive level in the area of ICT infrastructure. This has a lot to do with Swisscom and its capital expenditure, Group-wide capital expenditure increased by CHF 51 million or 4.5% to CHF 1,193 million in total. In Switzerland, capital expenditure rose by CHF 34 million or 4.0% to CHF 876 million. At the end of June, around 2.3 million lines were equipped with the latest fibre-optic technology. In total, Swisscom has connected around 3.3 million homes and offices with ultra-fast broadband (with speeds of more than 50 Mbps). This makes Swisscom a market leader by international standards.

Rapid headway is also being made with the switch from fixed network connections to IP technology. To date, Swisscom has already migrated the lines of 1.3 million customers - more than half of all its customers - to IP technology. Swisscom expects that around three-quarters of its customers will be using IP technology by the end of 2016. At this point, Swisscom is expected to offer All IP customers an automatic spam filter for blocking unwanted calls from telemarketers - a highly sought-after benefit of the new technology - as an optional service. Swisscom intends to complete the migration to All IP by the end of 2017.

Since the volume of mobile data traffic is doubling every year, Swisscom is continuing to further expand the high-speed 4G/LTE network. Over 98% of all Swisscom customers are already able to enjoy the advantages of the latest-generation mobile network. Swisscom, together with its partner Ericsson, became the first provider in Europe to successfully transfer data at 1 Gbps over the mobile broadband network back in April. The commercial launch of this technology is planned for early 2017. Swisscom is expected to augment its network with 5G by 2020. 5G will not only guarantee much higher speeds and extremely short response times in future, but also a greater degree of reliability and stability. This is why Swisscom has teamed up with EPFL and Ericsson to launch the initiative '5G for Switzerland', aimed at developing the potential of 5G together with industry partners. The results will be taken into account in the definition of the globally recognised common standardisation for 5G, which is expected to be completed by 2019.