30 May 2000
Markus Rauh mentioned the emergence of numerous new Internet firms and the many partnerships among them. He also noted that the financial markets gave the dot.com companies very high ratings. "E-business is the key word and the crucial motor driving the new economy. The new economic order is forcing companies to adapt to a completely new ball game with a completely different set of rules. One of the main characteristics of the new economy is the fact that companies are only assessed to a certain extent according to profitability and cash flow. Investors and analysts rate sales growth, the number of customers and innovative services based on Internet protocol very highly. E-commerce, and above all mobile commerce, are the high flyers at the moment. Big is better, irrespective of scale and synergies that can be achieved in operational terms."
According to CEO Jens Alder, the future of Swisscom lies in three business areas: Swiss core business; international services, and e-business. Swisscom intends using these three business areas to position itself in the growth markets mobile & data and Internet. Alder: "There is great potential in the increasing demand for broadband access and broadband services in the fixed-line network. Swisscom will be meeting that demand with new services such as ADSL technology."
Swisscom is clearly the market leader in its successful Swiss mobile telephony business, and already has approximately 2.6 million customers. By acquiring a UMTS licence in Switzerland and Germany, Swisscom intends to capture a strong position in the third-generation mobile communication market - the market of the future.
A possible IPO of the rapidly growing Internet provider Blue Window in the second half of 2000 is already being planned. With 500,000 customers, Blue Window is the undisputed number one in Switzerland. An IPO of Swisscom´s Austrian subsidiary, UTA, is also being considered.
According to CEO Jens Alder, Swisscom expects a marked increase in revenues for the current year thanks to the consolidation of debitel. However, due to limited opportunities for growth in Switzerland, the operating income will probably be lower than in 1999. Thanks to extraordinary transactions, net income is expected to increase.
These prospects will force Swisscom to take far-reaching steps aimed at increasing efficiency and reducing costs, which include the job cuts effective from 2001 announced earlier in the year. Together with debitel, cost structures and performance should be improved; growth outside Switzerland should be further encouraged, hence consolidating and expanding Swisscom´s position as one of the leading Value-Added Service-Providers in Central Europe.
Zurich, May 30, 2000