The pandemic did not benefit Swisscom in the first half of the year

Despite more intensive use of the network during semi-containment, turnover fell 3.9% over one year to 5.44 billion francs.

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The coronavirus pandemic did not support the results of the first half of the operator Swisscom in Switzerland, despite more intensive use of the network by its customers during the semi-containment. The merger of Sunrise and UPC should for its part strengthen competition somewhat, especially at the price level.

The blue giant has somewhat lowered its revenue expectations for 2020, due in particular to the decrease in roaming costs, business travel having fallen significantly because of the Covid-19.

Revenue fell 3.9% year on year to 5.44 billion francs, down 2.7% on a comparable basis and constant exchange rates, a statement said on Thursday.

Roaming charges, in-store sales and telecommunications solutions to business customers suffered in particular from semi-containment, although teleworking and home education resulted in heavy use of Swisscom’s network.

Pressure on prices also remained significant.

“We have generated more revenue in the business customer sector, but we cannot say that the crisis has supported our turnover in Switzerland,” Managing Director Urs Schaeppi said on a conference call.

Fastweb if renforce

On the other hand, Fastweb, the Italian subsidiary of Swisscom, recorded an improvement in revenue (+ 5.3% to 1.2 billion francs), especially during containment, the market configuration being quite different, with many households not having still internet at home. Fastweb has thus been able to gain market share with individuals but also with businesses, noted Mr. Schaeppi.

The group’s gross operating income (EBITDA) for its part fell 1.4% to 2.21 billion francs, while net profit fell 5.6% to 736 million francs.

Overall results are above the AWP consensus. The analysts questioned expected on average sales of 5.37 billion and an Ebitda of 2.19 billion francs.

For the year as a whole, Swisscom continues to bet on EBITDA of 4.3 billion francs and investments of 2.3 billion francs. Due in particular to COVID-19, the telecommunications group now anticipates a turnover of 11 billion against 11.1 billion previously.

The company has declared itself on the right track to achieve annual savings of at least 100 million, assured CFO Mario Rossi.

Increased competition

Commenting on the merger of operators Sunrise and UPC, the CEO noted that “competition will remain tough and prices are unlikely to increase.”

Not surprised by this consolidation of the branch, the boss attributes this trend to a greater demand for offers combining internet and mobile telephony as well as to pressure on prices and margins requiring more synergies.

The boss of Swisscom assesses the impact of the merger on the wholesale contract with Sunrise at 60 million. However, this amount will not disappear in one but over several years.

However, management did not provide details on the mobile network level contract with UPC (MVNO), which is expected to fall apart with this future merger. However, no change is planned for the fixed network.

Swisscom also does not anticipate establishing a close collaboration with Swiss Open Fiber, a joint venture between Sunrise and Salt in the fiber optic sector.

The merger between UPC and Swisscom, while strengthening competition, should also offer some potential for progress during the integration phase where customers could be won by the number one telecom company in Switzerland, for its part believes the Cantonal Bank of Zurich.

At 1:43 p.m., the title of the blue giant gleaned 0.08% to 507.2 francs in a stable SMI benchmark market.

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