Swisscom earns more than expected in the starting quarter

Although Swisscom reported a 30 percent dip in bottom-line profits to CHF 447 million for the first quarter of 2022, this was due to special factors resulting from revaluations at the Italian subsidiary Fastweb and the sale of a stake. However, this was due to special factors resulting from revaluations at the Italian subsidiary Fastweb and the sale of an investment, which had boosted the result by CHF 207 million last year.

Excluding special effects, net income would have increased, Group CEO Urs Schaeppi said in a conference call on Thursday. The result was strong, he said. Swisscom had been able to make gains in the highly competitive market in Switzerland and Italy.

Expectations clearly exceeded

Operationally, the business was robust. Sales decreased by 1.2 percent to 2.77 billion Swiss francs due to the weakness of the euro. Excluding the currency effects, sales would have remained stable.

This showed the usual pattern: business is eroding in Switzerland, while it is growing in Italy. Operating profit before depreciation and amortization (EBITDA) rose by 1.2 percent to CHF 1.14 billion. The "Blue Giant" is sticking to its targets for the year as a whole.

Swisscom's figures exceeded the expectations of the financial community. The share climbed by almost two percent by midday in a slightly firm overall market.

Solution in fiber optics dispute looms on the horizon

The Federal Competition Commission (Comco) and Swisscom are moving closer together in the dispute over fiber-optic expansion. Solutions are on the horizon, said Schaeppi: "We are in very intensive talks with the Weko."

The Weko had stopped the fiber optic network expansion because it considered Swisscom's modified network architecture with only one feeder line from the telephone exchange to the street duct to be anti-competitive. (Werbewoche.ch reported). The Weko requires a four-fiber rollout.

In February, the telecoms group was still threatening to reduce its fiber rollout. In the worst case, if the Weko insisted on a four-fiber rollout, Swisscom would only be able to connect 1 million households with the ultra-fast lines by the end of 2025. That would be 500,000 households and businesses fewer than planned.

This would mean covering only 50 percent of the population instead of 60 percent. A solution with the Weko is most likely somewhere between the worst and best scenario, Schaeppi explained on Thursday. The CEO did not want to specify in which direction the company was moving. However, he no longer expects a solution by the summer.

This is now the job of Christoph Aeschlimann, the current head of networks and technology, who will succeed Schaeppi as Group CEO on June 1.

No decision yet on compulsory advertising on TV

Schaeppi did not yet want to be specific about the implementation of the new tariff in the television business (GT12) from the agreement between the telecom providers and the TV broadcasters and advertising marketers, which would actually have come into force at the beginning of the year. "We have not yet decided how to deal with it."

Swisscom is examining various options, he said. Whether this means compulsory advertising for customers when they fast-forward through commercial breaks or an exemption from this through a price surcharge, "I don't want to comment on that," said Schaeppi.

Salt has reduced the previous replay duration from seven days to just 30 hours as of May 1 and has eliminated the fast-forward function. Those who still want to continue using these functions will have to pay more. In addition to Swisscom, Sunrise UPC has also not yet announced how GT12 will be implemented. (SDA)