Fastweb write-down knocks Swisscom profits down 61.2%

15 Feb 2012

Swisscom, Switzerland’s incumbent fixed line operator, has reported its results for the year ended 31 December 2011, noting a 4.3% year -on-year fall in revenue to CHF11.467 billion (USD12.488 billion). Swisscom attributed the falling revenue to price erosion, not fully offset by subscriber and volume growth. The company’s wireless, broadband and TV customer bases increased by 3.8%, 4.9% and 44.4% over the reported period, ending the year with 6.05 million, 1.66 million and 608,000 subscribers respectively. Contributing to price erosion was the continued trend for customers to take convergent and bundled subscriptions; Swisscom recorded a total of 613,000 such subscriptions at the end of December 2011 compared to 406,000 a year earlier, an increase of 51%. The company saw an 11.5% increase in revenue from mobile data services, despite reporting a 40% fall in the average price per megabyte. Wireless data generated CHF485 million for the company in 2011, compared to CHF435 million in 2010. Of the 1.5 million handsets sold in 2011, around 60% were smartphones.

EBITDA fell by 0.3% over the twelve-month period to CHF4.58 billion, though net income fell by 61.2% to CHF694 million. The drop in net income was the result of a CHF1.2 billion reduction in the book value of Swisscom’s Italian subsidiary Fastweb on the back of worsening economic conditions in Italy. Heavy spending on broadband infrastructure development saw CAPEX for the year increase from CHF1.903 to CHF2.095 billion. Going forward, Swisscom intends to increase CAPEX to CHF2.2 billion in 2012, aiming to meet its goal of connecting 30% of Swiss homes and businesses with fibre-optic cable.

Switzerland, Fastweb, Swisscom