Italy remains Swisscom’s growth engine
Published: Thursday, Feb 8th 2024, 14:20
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Swisscom achieved a solid result in 2023. In operational terms, the usual pattern emerged: revenue in the Swiss core business declined slightly, while the subsidiary Fastweb in Italy grew. This is unlikely to change in 2024.
Specifically, the "blue giant" was able to maintain its turnover in the past financial year. It rose slightly by 0.2 percent to CHF 11.1 billion, as Swisscom announced on Thursday. However, revenue in the Swiss core business fell slightly once again, with - as usual - revenue from telecommunications services shrinking.
On the other hand, there was positive news from Italy. The subsidiary Fastweb there grew strongly, in local currencies by around 6% to EUR 2.6 billion.
The future growth of the Swiss industry leader should therefore also come from the south. "We are thinking about entering the Italian energy market," said Swisscom CEO Christoph Aeschlimann at the Group's annual media conference in Zurich.
Electricity and telephone from a single source
This is possible because, unlike Switzerland, this market is fully liberalized. There are therefore "exciting opportunities", said Aeschlimann.
However, Swisscom did not come up with the idea itself. In Italy, for example, the energy provider Enel entered the telecoms market last year under virtually the opposite circumstances.
According to experts, the aim of such product expansions is to enable customers to obtain electricity and telecoms services from a single source. Aeschlimann did not comment on rumors of a possible takeover of Vodafone Italy.
Cost reductions in Switzerland
In Switzerland, where the telecommunications industry as a whole is shrinking, Swisscom intends to further reduce costs in order to offset the decline, as CFO Eugen Stermetz added. Cost reductions of around 60 million were achieved in 2023.
Looking again at the other key financial figures for 2023, operating income before depreciation and amortization (EBITDA) rose by 4.9% to CHF 4.6 billion. Swisscom also earned significantly more on the bottom line: net profit increased by 6.7% to around CHF 1.7 billion.
As in previous years, shareholders will now receive a dividend of CHF 22 per share. If everything goes as planned, this should also be the case again in 2024, the company's management emphasized.
Otherwise, the management team is targeting sales of around CHF 11.0 billion for the current year, which would be equivalent to a slight decline, a slightly lower operating profit (EBITDA) of CHF 4.5 to 4.6 billion and investments of around CHF 2.3 billion.
Money for fiber optics
The large amount of money is to flow into the expansion of fiber optics, for example. Swisscom wants to connect up to 80 percent of households to the fiber optic network by 2030. Today, this figure is only 46 percent.
In addition, the aim is to achieve so-called 5G+ coverage of 90% by 2025. As is well known, Swisscom also announced the end of 3G by the end of 2025. The existing 3G bandwidths will be used for 5G in future.
©Keystone/SDA
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