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Less than three years have passed since Sunrise disappeared from the Swiss stock exchange. To merge the company with UPC, its American-British parent company delisted Liberty Global Sunrise in 2021. The now-merged Sunrise will be separated again and made independent, as announced this week. Sunrise CEO André Krause (53) says what this means for the local telecom market in an interview with Blick.
Mr. Krause, Sunrise is returning to the stock market. For what reason?
André Krause: There are several reasons. We have now realized the synergies resulting from the merger of Sunrise and UPC and are ready to move into the next phase of growth. Our numbers showed a very positive development in the fourth quarter of 2023 and we expect growth with the outlook for 2024. We also believe Sunrise’s valuation within Liberty Global is quite low.
Normally, an IPO is used to raise capital for investments.
The situation is different here. The capitalization of the company is not the reason for the IPO. Since this is a spin-off, not a classic IPO, no cash will be generated. Liberty Global shareholders will receive Sunrise shares in addition to Liberty shares. We believe Sunrise will be valued more on its own than if it remained part of the Liberty conglomerate. The split is supposed to create more equitable value for shareholders.
What does the IPO bring to telecom consumers in Switzerland?
We will continue our strategy from previous years and want to offer our customers a very interesting offer: a high-quality network, innovative products and often cheaper prices than competitors.
How do you want to stand out from the competition?
We achieve a strong differentiation with Sunrise Moments, where Sunrise customers can experience special events such as concerts and ski races that they normally cannot get when purchasing tickets. Our brand ambassadors Marco Odermatt and Roger Federer appeared in front of the camera for the first time in our new campaign. They perfectly represent Sunrise with their features.
Despite Odermatt and Federer: Swisscom is still the clear number one in the Swiss telecommunications market for mobile communications, with a market share of almost 60 percent. Is there a new dynamic now?
Market shares do not change by large steps. This is not possible because only a small portion of the market is redistributed each year. But every year we cut off a larger part of this piece. So today we are already gaining customer market share. Since prices are also under pressure, we cannot necessarily increase sales. We want to change this.
What are your market share targets? Is it realistic that these will be five or even ten percentage points higher in the foreseeable future?
Five or ten percentage points more will be difficult. Something less than one percent per year is more appropriate. As I said, huge leaps are not possible because only 15 percent of customers decide on a new subscription each year, and many stay with the provider they already have.
This is not a grand declaration of war against Swisscom.
When I look at Swisscom’s development over the last few years, I cannot see the company growing. On the contrary, Swisscom has shrunk in Switzerland; This is a difficult enough situation. I think we are on the right track.
At the beginning of the week, you announced a large order from Migros. Is your potential in corporate business greater than in private clients?
Today, we have around 30 percent market share in almost all segments. When it comes to business customers, we’re a little further down the line, so there’s still a little bit more potential there. The Migros agreement gives us strength, it is the largest B2B order in our history. Of course, such a thing is not possible every quarter. It is at least as important that Migros entrusted us with a very large and important project, namely connecting all locations with fiber optics and a new technology called SD-WAN.
The service has long been a favorite among telecom customers. When I told a colleague that I was interviewing Sunrise’s boss, he said: “Tell him customer service needs to be better.”
We have a strong focus on service and our figures show we are making significant progress. But we are not yet as good as we would like. Because after the Corona epidemic, we experienced serious personnel shortages in our call centers. The number of people willing to work in call centers has gradually decreased. We experienced high volatility, which also affected the quality at times. There are still situations where things don’t work out. We will look at them in more detail.
Call center employees are increasingly assigned abroad. This should not help improve quality.
Having a call center abroad does not necessarily mean loss of quality. The prerequisite is correct language skills. Our threshold is high here. Employees must complete language tests and meet quality standards. The truth is that running a call center in Switzerland is not only difficult economically, but also difficult due to the available staff. We’re not the only ones.
At the beginning, you mentioned the synergy created by the merger with UPC. In this context, 600 people were laid off in 2021 and 200 more people were laid off in the past weeks. This is brutal for those affected. Will peace finally return?
Downsizing is always difficult. However, when two companies merge, it is unfortunately inevitable that duplication will decrease and job loss will occur. But I believe we are in a good position now. No major restructuring is planned in the near future.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
