Wednesday, August 19, 2015

Winning by Losing or Losing by Winning?

Perhaps this is what winning now looks like, for many service providers: flat revenue, declining earnings and negative operating income. Seriously.

In part, that is viewed as a positive because operating metrics improved, ranging from strong growth of video subscriptions, high speed access and bundled services revenue.

“Despite price cuts for roaming services, currency effects and strong competition, we enjoyed a solid and pleasing result in the first half of the year,” said Swisscom CEO Urs Schaeppi.

Most of those results come in the “units sold” or “next generation services provided” area.

As at the end of June 2015, Swisscom had connected more than 2.5 million homes and businesses to ultra-fast broadband with speeds in excess of 50 Mbps.

By the end of 2016, 99 percent of the Swiss public should have access to bandwidths of up to 150 Mbps. Swisscom also is currently testing 4G/LTE bandwidths of up to 450 Mbps, which are expected to go on offer at the end of 2015.

Roaming data traffic accelerated as a result of a drop in prices. In the first half of the year, volumes rose by a factor of 2.3 in comparison with 2014, and tripled in July.

By the end of June 2015, the number of customers using a bundled package had increased year-on-year by 197,000 or 17.7 percent  to 1.31 million.

Revenue from bundled contracts rose year-on-year by CHF 168 million or 18.5% to CHF 1,077 million.

The number of Swisscom TV connections increased year-on-year by 147,000 or 13.5 percent to 1.2 million (+73,000 in the first half of the year).

The number of retail fixed-line broadband connections  increased 67,000, year over year, up 3.6 percent to 1.92 million.

The growth of TV and broadband connections more than offset the decline in the number of fixed network connections (-133,000 year over year). The number of revenue generating units (RGUs) increased year-on-year by 192,000 or 1.6 percent to 12.4 million.

Swisscom First Half 2015 Financial Results
Net revenue (in CHF million)
Operating income before depreciation and amortisation, EBITDA (in CHF million)
Operating income EBIT (in CHF million)
Net income (in CHF million)

Swisscom First Half 2015 Operating Metrics
Swisscom TV access lines in Switzerland (as at 30 June in thousands)
Mobile lines in Switzerland (as at 30 June in thousands)
Revenue from bundled contracts (in CHF million)
Broadband lines Fastweb (as at 30 June in thousands)

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