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Press release

Interim report at 30 June 2000: Swisscom posts high revenues and net income

29 August 2000

The Swisscom group increased revenues by 33.4% to CHF 6.9 billion in the first half of 2000 as a result of the full consolidation of debitel. The group considerably expanded its mobile communications customer base in Europe to 8.6 million, paving the way for continued success. Substantial price reductions led to significantly lower margins in fixed-network telephony. The operating income of the Swisscom group fell by around a third to CHF 1.1 billion. Owing to the sale of the Cablecom holding, net income rose to CHF 2.4 billion. The company anticipates considerably lower operating income for 2000 as a result of sustained pressure on margins.

Fixed network telephony continues to be characterised by price erosion and high pressure on margins: Public Com revenues fell by 22.4% to CHF 2097 million and the EBIT margin decreased from 32.4% to 18.2%. The continued boom in Internet traffic saw value-added service traffic volumes double. At the end of June 2000, Swisscom recorded 1.61 million ISDN channels (+43.1%) and 3.48 million analogue accesses. The launch of ADSL technology in autumn 2000 lays the foundations for continued growth.

Clear market leader in mobile communications

Mobile communications in Switzerland goes from strength to strength: Mobile Com acquired 424,000 new customers in the first half of 2000 and increased revenues by 20.4% to CHF 1364 million. With 2.72 million customers and market share of 68%, Swisscom is the clear market leader. Mobile Com´s operating expenditure increased by 38.9% on account of higher roaming costs, material expenditure and dealer commissions. The EBIT margin fell from 48.1% to 40.4%. By launching Switzerland´s major WAP portal, mobile e-commerce solutions and location-based data services, Swisscom is opening up targeted new market segments to further leverage mobile communications.

Business Com revenues (leased-line and data transmission services, corporate communication, equipment) remained practically unchanged at CHF 692 million. The EBIT margin fell from 2% to - 0.4% owing to high price pressure on international leased lines and the cost of setting up new areas of business. Swisscom´s Conextrade is a business-to-business marketplace that optimises purchasing processes and reduces their costs. Swisscom also has a holding in AG, the first integrated business-to-business portal for the Swiss SME segment.

Wholesale and Carrier Services posted an increase in revenues of 69.6% to CHF 575 million thanks to growth in national interconnection services and international carrier services.

Swisscom plans an IPO for Bluewin, Switzerland´s leading Internet provider, on the Swiss SWX new market stock exchange.

debitel - 260,000 new customers in Europe a month

In the first half of 2000, the number of debitel customers increased by 1.3 million to around 4.5 million in Germany, and by 1.6 million to around 6.3 million in Europe (5.9 million mobile customer at 30 June 2000). By the end of 2000, debitel aims to increase its customer base to over 6.5 million in Germany, and to over 8.6 million in Europe. debitel achieved revenues of CHF 1861 million in the first half year (+ 33.8%). As debitel was not acquired until 1 October 1999, the company was not included in the previous year´s figures. The EBIT before goodwill depreciation amounts to CHF 55 million and is therefore 33% lower than in the previous year. As Europe´s largest network-independent service provider, debitel plans to operate in this growth market as an alternative, innovative provider of UMTS services with partners from the pool of successful bidders.

Higher operating expenses - 1600 job cuts planned

The operating expenditure including depreciation increased by CHF 2280 million in the first half of 2000 compared to the same period in the previous year. debitel bears CHF 1973 million of that sum including goodwill depreciation. Excluding debitel, expenditure on materials and services increased by CHF 301 million. Personnel expenditure decreased by CHF 15 million, excluding debitel. Other expenditure increased by CHF 30 million. Not taking debitel into account, staff numbers were reduced by 8.1% to 18,288 employees in line with plans. Swisscom reached agreement with the social partners on the key values of the future social plan: between 2001 and 2003, around 3000 jobs will be shed in the Swiss core business and a similar number of jobs will be outsourced. Restructuring expenses will be incurred for measures concerning job cuts in the second half of 2000.

Outlook 2000: Higher revenues, lower operating income and stable net income

The full consolidation of debitel will lead to a significant increase in annual revenues for 2000. Owing to expansion of the customer base, Swisscom anticipates a further increase in revenues at Mobile Com. However, revenues at Public Com will be considerably lower than last year. Operating income (EBIT) will be significantly lower than last year because of restricted domestic growth opportunities and sustained price pressure. Owing to extraordinary transactions, such as the sale of our Cablecom holding, we anticipate similar net income to last year for the business year 2000. The sale of real estate in Switzerland is planned for 2001.

PDF: Half-year report at 30 June 2000 

Bern, 29 August 2000


Swisscom AG
Media Relations
3050 Bern