Swisscom surprised positively in the last quarter under Urs Schaeppi

Swisscom performed well in the last quarter under the leadership of Urs Schaeppi. Net profit fell by 30 percent to CHF 447 million. However, the diver can be explained with special factors. In the same quarter of the previous year, for example, Swisscom sold its stake in the Belgian telecoms company Belgacom. The group did not benefit from such a tailwind this time.

Operating figures for the first three months are above analysts’ expectations. Sales fell by 35 million francs to 2.77 billion francs. However, Swisscom was able to increase operating profit (Ebitda) by 1.2 percent to CHF 1.14 billion.

Geographically, the almost traditional picture emerges for the “blue giant”: In the saturated Swiss home market, Swisscom is on the defensive as the market leader. Here, revenues fell slightly. The Italian subsidiary Fastweb, on the other hand, continued on its growth course. In order not to let the profit margin collapse, the group has been on the cost brake for years. In the current fiscal year, too, 100 million Swiss francs are to be saved.

There is no reason for the Swisscom line to change its financial goals. In 2022, Swisscom is still targeting sales of CHF 11.1 to 11.2 billion. That would roughly correspond to stabilization at the level of the previous year. When it comes to operating profit, the group has lowered the bar a little. He expects an operating profit (Ebitda) of 4.4 billion Swiss francs. That would be around CHF 100 million less than in 2021.

New boss without stable smell

On June 1st, the current Chief Technology Officer Christoph Aeschlimann will take over the CEO post from Urs Schaeppi. Schaeppi took over the role of CEO in 2013 after the suicide of his predecessor Carsten Schloter. Swisscom announced the change in leadership last February.

Aeschlimann is an IT engineer and joined the group in 2019. He has relatively little managerial experience; he is also not regarded as an outstanding expert on the telecoms industry. In spite of this, or precisely because of this, observers believe that the 45-year-old is capable of driving forward the transformation of Swisscom from a telecom to an ICT company. The fact that Aeschlimann, a fresh force without the typical Swisscom stable smell, is taking over the reins was largely positively received within the company.

Swisscom warns of fiber optic blockade

In the summer, Aeschlimann will also inherit some legacy assets. The so-called fiber optic dispute is causing Swisscom a lot of trouble. In December 2020, the Competition Commission (Weko) prohibited the group from expanding the fiber optic network with a new construction as a precautionary measure.

In contrast to the previous network architecture, only one fiber now runs from the Swisscom headquarters to the manhole. Competitors could therefore no longer use their own fiber and transmit the data with their own technology, but would have to rent standardized pre-products from Swisscom. From the point of view of the competition authorities, this harms competition.

A comparison of the construction methods of fiber optic networks

The Federal Administrative Court supported the Weko decision in autumn. The decision of the Federal Supreme Court on the precautionary measures is expected in the coming weeks. The main proceedings, in which ComCo deals with the question of whether Swisscom definitely has to return to the “old” construction method, continue to run in parallel. Observers assume that Swisscom and ComCo will find a compromise solution.

According to Swisscom, a return to the “old” way of building would mean that by the end of 2025 only 50 instead of the originally planned 60 percent of households could be connected to fiber optics. According to the group, there would also be additional costs of CHF 400 to 600 million. Critics of the new construction, on the other hand, consider the cost differences to be marginal.