Price erosion continues to hit Swisscom bottom line

8 Nov 2013

Swiss fixed line incumbent Swisscom has registered a 6.1% year-on-year decline in net profits for 9M13 as price erosion and greater network maintenance and IT expenses in its core Swiss business offset revenue and subscriber growth. Turnover expanded by 0.4% y-o-y to CHF8.463 billion (USD9.257 billion), bolstered by an increase in multi-play subscriptions to 938,000 (+26.9%) and wireless customer growth of 3.1% y-o-y. ARPU continued to fall, however, dipping by CHF4 in the mobile market to CHF39 and by CHF2 in the broadband segment to CHF36. Swisscom notes that price erosion in Switzerland negatively impacted the firm’s books by CHF300 million, contributing to a 2.9% decline in EBITDA to CHF3.248 billion. Swisscom reported that its ‘NATEL infinity’ offerings, which provide unlimited calls, SMS and data usage at capped speeds, have continued to grow in popularity, with more than 1.5 million of its 6.346 million wireless subscribers – equating to more than half of its 2.177 million residential post-paid users – having signed up to the tariff. Partially as a result of the telco’s unlimited tariffs, data usage increased by more than 130% y-o-y.

Switzerland, Swisscom