Swisscom posts better than expected results for first quarter
The country's biggest telecommunications operator, Swisscom, beat market expectations on Thursday by reporting a rise in first-quarter operating income.
The 5.7 per cent increase in operating income to SFr1.21 billion ($697 million) was attributed to improvements in efficiency and higher traffic volume. However, the company maintained its forecast of lower operating income for the year as a whole. It is expecting higher profits, though, because of a huge sale of assets.
Swisscom recently sold a 25 per cent stake in its mobile phone operation to the world's largest operator, Vodafone. It has also benefited from the sale of much of its real estate portfolio.
And unlike other European telecommunications companies, Swisscom, did not spend billions on acquiring its UMTS third generation mobile licence. It bought its licence for just SFr50 million.
Swisscom has embarked on a major restructuring programme since the liberalisation of the telecommunications market more than two years ago. This has led to an aggressive tariff war that has eroded profit margins at the former state monopoly.
On Wednesday, Swisscom postponed the partial flotation of its Bluewin Internet service provider because of continuing weakness among technology stocks.
It was the second time the flotation had been put off and Swisscom revealed that it was now reconsidering whether the move would go ahead at all.
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