Sunrise slowed in summer – price increase hits customer numbers
Published: Wednesday, Nov 1st 2023, 11:30
Updated At: Thursday, Nov 2nd 2023, 00:54
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The decline at Sunrise continues. Switzerland's second-largest telecoms group also posted slightly lower revenues and earnings in the summer quarter. The price increase at the beginning of July had an impact on customer numbers.
"A price adjustment always leads to losing customers," said Group CEO André Krause in an interview with news agency AWP on Wednesday. Sunrise lost 7400 Internet customers from July to September and on the other hand gained only 29,200 new mobile subscribers. "These are not bad numbers, but they are not very strong numbers either."
By comparison, in the same quarter of the previous year, the Group attracted over 42,000 new cell phone subscribers.
"But the churn rate was significantly lower than we had feared in our worst expectations," Krause said. The price increases had not led to a flight-like exodus of customers.
Fewer roaming packages sold
In addition, there was a headwind in the summer quarter: For the period of the summer vacations, when cell phone usage abroad is at its highest, customers had taken out more subscriptions with roaming packages than in the past, Krause explained. As a result, Sunrise was able to sell fewer individual roaming packages.
In addition, fewer cell phones were sold, said Krause. This is also a result of the fact that the company has held back in the discount battle and has launched less aggressive promotional offers on the market.
And so overall sales fell by 0.6 percent to CHF 759.1 million. Segment-adjusted operating profit before depreciation and amortization (EBITDA) fell by 5.9 percent to 274.9 million Swiss francs.
The decline was mainly due to higher costs for hardware and access to Swisscom's and Swiss Fibre Net's optical fibers. "These were partially offset by somewhat lower operating costs, although higher network maintenance and energy costs were also incurred here," Sunrise wrote.
In addition, the acquisition of the telecoms business of Genossenschaft Elektra Baselland (EBL) weighed on earnings. Without this, adjusted EBITDA would have declined by only 3.4 percent, said CFO Jany Fruytier.
On the road to recovery
However, the decline was less than in previous quarters, said Krause: "We are on the road to recovery. Basically, we are on target after nine months."
In the first nine months as a whole, revenue decreased by 1.0 percent to CHF 2.2 billion. In the case of consumers, there was a decline in mobile communications and in the fixed network. By contrast, the corporate customer business increased.
Segment-adjusted EBITDA fell by 7.3 percent to CHF 776.2 million. Excluding the acquisition costs for EBL, operating profit would have declined by only 4.3 percent.
"We expect the fourth quarter to show further improvement as the headwinds from the third quarter disappear," Krause said.
Therefore, Sunrise confirms the financial targets for the full year 2023. The Group continues to expect a revenue decline in the low single-digit percentage range. Segment-adjusted EBITDA is expected to decline in the low to mid single-digit range.
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