Swisscom presents mixed results

Fierce competition leaves its mark on Swisscom results Keystone

Switzerland's largest telecommunications group, Swisscom, has warned that operating profits in 2000 will fall considerably, after they dropped 33 per cent in the third quarter to SFr1.6 billion ($905 million).

However, the company said net profits would be slightly higher.

Sales in the third quarter rose by 36 per cent to SFr10.5 billion, with much of the increase coming from Swisscom’s German mobile communications subsidiary, debitel, which posted revenues of SFr2.9 billion.

Swisscom’s mobile communications business remained a growth sector with revenues rising by 21 per cent to SFr2.1 billion. But massive price reductions led to significantly lower revenues and margins in fixed-network telephony.

As expected by analysts, gains from the sale of investments and a positive financial result lifted the company’s overall net profit to SFr3 billion.

Swisscom said in a statement that it anticipates substantially lower operating profit in 2000 compared to 1999 on account of pressure on margins and loss of market share in fixed-network telephony.

However, thanks to the successful sale of holdings the group expects a slight increase in net profit in comparison to the previous year.

In fixed-network telephony, loss of market share and price reductions caused revenues to fall by 19.4 per cent to SFr3.2 billion. The main declines in revenue were in national long-distance and international phone traffic.

Swisscom said its mobile communications operation acquired 681,000 new customers in the first nine months of 2000. With market share of around 67 per cent, the number of customers stood at close to three million.

Another growth area was the short message service (SMS) messages – a total of 418 million SMS messages were sent in 2000, more than three times the number sent in the first nine months of the previous year.

swissinfo with agencies