+++ Revenue stable, with EBITDA and net income slightly down on the previous year +++ Optical fibre expansion resolutely continuing +++ Business customers: growth in IT services +++ Fastweb increases customers, revenue and EBITDA – Participation in FiberCop sold at a profit +++ Vodafone Italia takeover on track – Walter Renna designated CEO of new company +++ Change on the Swisscom Group Executive Board: Gerd Niehage to leave Swisscom and Mark Düsener to take over as Head of the IT, Network & Infrastructure Group division +++

‘I am satisfied with the business performance in the first half of the year. It is in line with expectations,’ says CEO Christoph Aeschlimann. ‘Swisscom remains on track and confirms the guidance for the financial year 2024. With the new country-specific data roaming packages – the cheapest in Switzerland – and the Swiss AI Platform for business customers, we are continuing to set standards. This is also the case in our activities as an intermediary on the new sure insurance platform, where insurance policies with flexible terms can be taken out online quickly and easily. I am particularly pleased that Fastweb in Italy can also look back on a successful first half of the year. The takeover of Vodafone Italia is on schedule. In the second half of the year, we want to continue to inspire our customers in Switzerland and Italy and consistently increase our efficiency.’

Slightly lower revenue in the Swiss core business, growth at Fastweb

Group revenue remained almost stable at CHF 5,454 million, which translates to an increase of 0.8% at constant exchange rates. In the Swiss core business, revenue fell slightly by 1.4% to CHF 3,988 million. Revenue from telecommunications services decreased by 2.0% to CHF 2,648 million. In contrast, revenue from IT services with business customers rose by 6.0% to CHF 601 million. The business in Italy continues to show positive development: the year-on-year revenue growth at Fastweb comes in at EUR 89 million (+7.1%).

Consolidated operating income before depreciation and amortisation (EBITDA) is down by 1.0% in a year-on-year comparison to CHF 2,279 million. Excluding non-recurring items and at constant exchange rates, the decrease comes to 1.1%. In the Swiss core business, the drop in revenue was partially offset by ongoing efficiency improvements, with EBITDA declining by 2.3%. The comparable EBITDA at Fastweb was up by 1.5% (in EUR). Consolidated net income fell by 1.4% year-on-year to CHF 836 million.

Network infrastructure: expansion for a digital Switzerland

Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, consolidating its position at the cutting edge of technology. At CHF 1,157 million, investment across the Group was up on the level of the previous year (+4.0%).

Mobile network: over 83% 5G+ coverage

At the end of June 2024, Swisscom provided more than 83% of the Swiss population with 5G+. The Federal Court decided that new building applications had to be submitted in order to apply the correction factor for the efficient operation of adaptive antennas. Swisscom is complying with the applicable requirements and will submit the necessary applications to the authorities. This will likely result in the over 2,500 pending building applications for mobile communications systems doubling in number by the end of the year. Rapid expansion is required to ensure the high network quality and to continue to offer customers a first-rate mobile network.

Broadband expansion: more optical fibre for the whole of Switzerland

By the end of 2025, fibre-optic coverage is expected to increase from the current approximate figure of 49% to 57%¹  and to 75–80% by the end of 2030. By then, the latest network technologies such as optical fibre and 5G mobile communications should be available in almost all municipalities. At the same time, Swisscom will gradually decommission the copper access network, which is around 150 years old, wherever optical fibre is available.

Swisscom intends to complete the optical fibre network in all municipalities after 2030. This will enable the complete decommissioning of the copper access network and related electricity savings in the order of the annual consumption of a city with around 20,000 inhabitants (100 GWh).

Residential customers: more mobile lines

At the end of June 2024, 2.08 million customers in the residential customer segment were using blue subscriptions. In this segment, blue accounts for 50% of all mobile subscriptions and 81% of fixed-line broadband connections. The number of Swisscom fixed-line broadband connections fell by 1.5% year-on-year to 1.98 million lines, with the number of TV lines dropping by 2.5% to 1.51 million. In mobile communications, the number of lines rose by 0.2% to 6.27 million, with the customer structure changing due to an increase in postpaid lines (+102,000) and a decrease in prepaid lines (–91,000).

Revenue from telecom services in the residential customer segment fell by 1.6% year-on-year to CHF 1,895 million. Among other things, the decline in revenue was due to the increase in VAT not being passed on to customers.

Business customers: increased demand for IT services

The market for business customers remains dominated by price pressure and technological changes. Revenue from telecom services was down by 3.0% year-on-year to CHF 753 million. Swisscom has a strong position as a full-service provider and customer satisfaction is high. Demand for cloud, security, IoT and SAP solutions and business applications continued to grow. Revenue from IT services rose by 6.0% in the first half of 2024 to CHF 601 million.

Fastweb increases customers, revenue and EBITDA – Sale of stake in FiberCop

Fastweb increased its revenue by 7.1% in local currency terms. In the mobile communications sector, the number of connections was up by 11.4% on the previous year to 3.72 million. The customer base in the fixed-network business (retail and wholesale) grew overall by 5.4% to 3.34 million. Although this fell by 2.8% to 2.56 million in the retail business, the number of ultra-fast broadband connections that Fastweb provided to other operators rose to 778,000 (+46,2%). Bundled offerings continued to play an important role, with 43% of customers using a bundle of fixed network and mobile. Revenue from residential customers remained virtually stable at EUR 578 million (–0.3%). Revenue in the business customer segment grew by 9.9% to EUR 579 million. Wholesale also reporting higher revenue, with an increase of 27.1% to EUR 183 million. Furthermore, Fastweb sold its participation in fibre-optic network provider FiberCop. The 4.5% stake was sold for EUR 439 million to Optics Bidco, a subsidiary of US investment company KKR. The transaction was completed in early July 2024. The sale resulted in a profit of EUR 189 million in the second quarter of 2024, which was recorded directly in equity.

Fastweb’s overall revenue rose year-on-year to EUR 1'340 million (+7.1%). Operating income before depreciation and amortisation (EBITDA) on a comparable basis rose by EUR 6 million to EUR 417 million (+1.5%). At the end of the first half of 2024 Fastweb marks 11 years of consecutive growth.

Change on the Swisscom Group Executive Board: Gerd Niehage to leave Swisscom and Mark Düsener to take over as Head of the IT, Network & Infrastructure Group division

As of 1 September 2024, there will be a change on the Swisscom Group Executive Board. Mark Düsener, who has been head of the Mobile Network, Mobile Services & B2B Telco unit in the IT, Network & Infrastructure (INI) division of Swisscom since November 2020, is to take over as head of the INI Group division. As the new CTIO, he succeeds Gerd Niehage, who is leaving the company. There will be no changes to the strategic direction of INI or planned investments under the new leadership.

CEO Christoph Aeschlimann: ‘Gerd Niehage has addressed important future issues and been instrumental in driving forward the standardisation and harmonisation of data, processes, architectures and products. I would like to thank him for his valued contribution, hard work and dedication, and wish him all the best and continued success for the future. At the same time, I would like to extend a warm welcome to Mark Düsener, who takes over as CTIO. He is a strong leader, who has successfully implemented key transformation projects at Swisscom. Having helped develop and implement the current INI strategy, he is the right person to move forward with the next stages in the transformation.’

Financial outlook confirmed

Swisscom expects revenue of around CHF 11.0 billion, EBITDA of CHF 4.5–4.6 billion and capital expenditure of around CHF 2.3 billion for 2024. Subject to achieving its targets, Swisscom plans to propose payment of an unchanged attractive dividend of CHF 22 per share for the 2024 financial year at the 2025 Annual General Meeting.

Vodafone Italia transaction on track - Walter Renna designated CEO of new company

On 15 March 2024, Swisscom announced its takeover of Vodafone Italia and the merger of this acquisition with Fastweb. The acquisition is on schedule. In May, the Italian Presidency of the Council of Ministers approved the transaction without reservation in accordance with the Golden Power legislation. Likewise in May, and thus well ahead of the expected completion date within the first quarter of 2025, Swisscom secured the financing for the takeover price of EUR 8 billion. To this end, Swiss bonds totalling CHF 1.145 billion were issued as well as eurobonds with a total volume of EUR 4 billion. The remaining amount of EUR 3 billion was financed via a bank loan made available in two instalments. The Swiss Competition Commission approved the transaction unconditionally with its letter dated 23 July 2024. Furthermore, the UK Listing Rules were amended as of 29 July 2024, which means that Vodafone Group PLC does not have to have the transaction approved by the Annual General Meeting. Subject to other antitrust and standard approvals, the transaction is expected to be completed in the first quarter of 2025.

Moreover, the Swisscom Board of Directors appointed Walter Renna, CEO of Fastweb, as designated CEO of the new company. After a career as a consultant in mergers and acquisitions Renna joined Fastweb in 2008 and played a key role in shaping the company’s growth story to date – since October 2023 as CEO. In this role, he strengthened Fastweb’s market position, among others by implementing a successful diversification strategy and launching an innovative energy service as well as an AI supercomputer for Italy. Walter Renna’s final appointment is subject to the successful closing of the transaction.