Swisscom repeats expectations of higher net profit

Swisscom which has just released poor first quarter results Keystone

Switzerland's largest telecommunications operator, Swisscom, is maintaining its forecast of higher full year sales and net profit.

However, in an interim report of its first quarter figures, the company says increasing pressure on its margins will result in a lower operating result.

Swisscom, which is still majority owned by the Swiss Confederation, reported that revenues were up 31 per cent to SFr 3.4 billion after the first three months.

However, without consolidation of the German mobile phone operator, debitel, in which Swisscom has a 74 per cent stake, revenues would have been down by 3.7 per cent.

First quarter net income more than tripled to SFr 2.065 billion, boosted by extraordinary gains of SFr1.335 billion on the sale of its one third stake in Swiss cable television operator Cablecom.

Operating income at Swisscom fell over the first quarter of 2000, in line with analysts’ expectations, dropping 30 per cent to SFr 660 million.

The company said this was due to “fierce competition, increased costs as well as price erosion, particularly in fixed-line telephony”.

Swisscom says its Internet provider Blue Window increased its customer base to 443,000 – a rise of 37.3 per cent in three months. Preparations are continuing for Blue Window to be listed as a separate company, with an initial public offering expected in the second half of the year.

Analysts continue to keep a keen eye on Swisscom’s performance as competition in the liberalised telecommunications sector in Switzerland increases.

swissinfo with agencies