The Swiss Times - Swiss News in English

Swisscom will decide on brand in Italy in the next few years

Following the takeover of Vodafone Italy, Swisscom can continue to use the Vodafone brand in its southern neighbor for a maximum of five years. It is not yet clear which brand Swisscom will use for its mobile communications offering in Italy after that.

"We haven't decided yet," said Swisscom CEO Christoph Aeschlimann in an interview with the news agency AWP on Friday. "We have enough time to look at the issue in detail and decide how to proceed afterwards."

Brand matters must be approached very carefully, said Aeschlimann: "It also takes a very long time to establish a brand. I assume that the decision on the brand will be slower rather than faster."

Swisscom does not necessarily have to establish a new brand. With the takeover of Vodafone Italy, the company also acquired the secondary brand Ho, which is already anchored in the market. This will continue to exist, said Aeschlimann: "We also have the Fastweb brand, which is very well known. In this sense, we don't necessarily need a new brand if we can no longer use Vodafone."

Competition remains tough

When asked whether he expects further margin erosion in the Italian telecoms market, Aeschlimann said: "We assume that the market will remain very competitive. There are very many market players in both mobile telephony and the fixed network. The situation will not change even after the merger. It is therefore very important that we own the networks ourselves and can achieve economies of scale in order to remain competitive."

When asked whether he still expected resistance to the takeover, Aeschlimann said that the deal was highly complementary in terms of the infrastructure and capabilities of the two companies. "In this sense, the deal is very value-adding. For this reason, we assume that we will be able to implement the deal as planned," said the Swisscom CEO in response to criticism from Swiss politicians.

Both companies complement each other

According to the information provided, Fastweb and Vodafone complement each other very well. While Fastweb generates 87% of its revenue from the broadband network and only 13% from mobile telephony, Vodafone Italy does the opposite. The latter generates a good two-thirds of its revenue from the mobile network and just under a third from the fixed network.

Together, Fastweb and Vodafone have a market share of 31% in the fixed network and 26% in mobile communications in Italy. There is still room for improvement in the latest mobile technology 5G, where Vodafone has achieved coverage of 68%. "We want to continue the expansion of 5G," said Aeschlimann.

In terms of turnover, the two companies together are the clear number two with 7.3 billion euros behind the top dog TIM, which is expected to generate 9.2 billion in the Italian business following the planned spin-off of the network division. In terms of operating profit before depreciation and amortization (EBITDA) after leasing, Vodafone and Fastweb would even be ahead of TIM (1.8 billion) with 2.4 billion.


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