Naturally, this gets more expensive because more lines need to be laid and more roads dug. That’s why Swisscom is backing out on its expansion goals: It now only wants to cover 50 to 55 percent of the population by the end of 2025, as Swisscom announced in a Thursday statement. The annual budget for fiber optic investments of 500 to 600 million CHF remained unchanged.
In fact, the “Blue Giant” was aiming to double the number of fiber optic connections, comprising one-third of households and businesses, to around 60 percent by the end of 2025. That would be 1.5 million more fiber optic connections than today. Then 70 to 80 percent coverage should be achieved by 2030.
However, the Federal Competition Commission (Comco) stopped fiber optic expansion because it felt that the network architecture, which had been replaced by Swisscom with only one feed line from the telephone exchange to the manhole, was anticompetitive. Weko insists on a four-fiber expansion. Swisscom’s appeals against the Weko decision were dismissed first in the Federal Administrative Court and then in the Federal Supreme Court.
Due to the Weko veto, nearly 400,000 fiber optic connections that Swisscom had built in the meantime but were not allowed to put into operation are now blocked. The fiber optic partnership with Salt has been on hold for months. This means huge revenue losses.
Operationally, Swisscom was solid: sales fell 1.4 percent in the first nine months to CHF 8.2 billion. The weaker euro is to blame for the slight decline that negatively impacted Italian broadband subsidiary Fastweb’s result in Swiss francs. Operating profit before depreciation and depreciation (EBITDA) fell 3.6 percent to CHF 3.3 billion.
However, net profit fell 21 percent to CHF 1.2 billion due to special effects. Last year, revaluations from a fiber optic cooperation with Fastweb and the sale of a stake in Belgium resulted in a non-recurring gain of 207 million francs. On the other hand, Swisscom received a fine of approximately CHF 72 million from ComCo this year.
In the face of the weak euro, Swisscom is now slightly reducing its annual sales targets to CHF 11.1 billion. So far, the largest telecom group in Switzerland had targeted sales of 11.1 to 11.2 billion.
However, the other targets for 2022 as a whole remain unchanged. EBITDA is expected to be around 4.4 billion francs and investments around 2.3 billion francs.
(SDA)