Price erosion in its domestic market has seen the net revenue of Switzerland’s incumbent telco, Swisscom, decline by 6.4% year-on-year. Swisscom posted net revenues of CHF3.04 billion (USD3.35 billion) for Q3 2011, compared to CHF3.25 billion a year earlier. EBITDA for the three months ended September 2011, was CHF1.25 billion, with an EBITDA margin of 44.4%, a slight increase compared 41.5% a year earlier, whilst operating income increased by 1.4% to CHF781 million over the same period. Investment in developing Long Term Evolution (LTE) and fibre-optic networks in Switzerland saw CAPEX for the quarter rise by 20.3% to CHF556 million.
Swisscom’s Italian subsidiary, Fastweb saw its subscriber figures decline by 8.9% year-on-year, from 1.71 million to 1.56 million, due to strong competition, and the implementation of stricter credit checks on new customers. Fastweb’s revenue suffered as a result of the reduction in its subscriber base, falling 21.2% from CHF624 million in Q3 2010 to CHF492 million a year later.
Domestic operations fared a little better, with revenues falling by 2.8% to CHF2.12 billion for the third fiscal quarter of 2011. This was largely thanks to price erosion, with the telco claiming that the price per MB for wireless data services has fallen by more than 40%, with the knock-on effect that the monthly average revenue per user (ARPU) for Q3 2011 fell by 5.8% compared to the previous year. The company saw an increase of 3.8% in wireless subscribers, however, with data services continuing to drive Swisscom’s growth; 60% of the handsets sold by the company in the twelve-months ended September 2011 were smartphones.
Group projections for the year remain unchanged, with net revenues of CHF11.5 billion expected for full year 2011.