Swisscom results beat expectations

24 Mar 2004

The Swisscom Group has said its net profit increased by more than 90% to CHF1.57 billion in 2003, despite total turnover remaining flat at CHF14.58 billion. EBITDA rose by 5.2% to CHF4.64 billion, marginally beating analyst expectations of CHF4.58 billion. The company is expecting the figure to fall to around CHF4.3 billion in 2004 following its planned divestment of German operator debitel. In 2002 Swisscom reported a net income of CHF824 million after writing down the value of its 93% stake in debitel. Swisscom has also unveiled plans to buy back up to CHF2 billion worth of shares, beginning in May 2004, and to pay shareholders a dividend of CHF13 per share, corresponding to a total payment of CHF861 million.

Swisscom’s fixed line division recorded a 5.5% drop in turnover to CHF4.5 billion in 2003 as strong growth in ADSL customers helped partially offset falling revenues from its retail and wholesale fixed line traffic operations. At the end of 2003 Swisscom said it presided over 487,000 ADSL lines, of which 274,000 were customers of its own Bluewin retail offering, and the remainder customers of other providers for which it provides wholesale access. Swisscom Mobile ended 2003 with revenues of CHF3.43 billion, up 1.8% over 2002, thanks to an expansion of its customer base and an increase in direct traffic termination with other mobile operators. These factors helped to offset the operator’s declining average revenue per user (ARPU) and average minutes per user figures.

Swisscom Mobile recently announced plans to set up a nationwide mobile broadband network combining wireless local area network (WLAN), UMTS and EDGE technologies by the beginning of 2005. The operator has said it plans to increase the coverage of its UMTS service to 70% of the population by the end of 2004, rising to 90% by the end of 2007. By the same date it claims the network will be capable of transmission speeds of up to 3Mbps, compared to the current maximum of 350kbps. Swisscom Mobile has set aside CHF500 million for expanding its mobile networks and service offerings in 2004.

Germany, debitel, Swisscom