Swisscom’s operating profit tumbles

(Keystone: file picture) Keystone

The country's largest telecommunications operator, Swisscom, has suffered a huge drop in its operating income for the first six months of the year.

The figure of SFr1.1 billion is down a third on the corresponding numbers for the previous year. Sales, however, were up by 33.4 per cent due to the full consolidation of the German mobile operator, debitel.

Net profit almost doubled to SFr2.4 billion on asset gains made through the sale of Swisscom’s one-third stake in the cable television company, Cablecom.

The company said operating profit for the year as a whole would be considerably lower than it was in 1999 as the pressure on margins was sustained. But it said sales would be better and net profit would remain about the same.

Swisscom has faced stiff competition from other telecommunications operators since the liberalisation of the market last year. A price war between the different providers has seen telephone charges tumble, particularly for fixed-network customers.

Last week, Swisscom announced a sweeping reorganisation intended to transform the group into a series of independent operating companies by the end of the year. It is hoped that this will enable it to compete better in the changed market circumstances.

The executive board is to be replaced by largely autonomous management structures in the company’s individual units. The board is to concentrate on financial and strategic questions.

The radical changes will also see the mobile division launch itself on the stock market as a separate company.

swissinfo with agencies