Investors see the silver lining in UBS’s gray cloud
Smartphones: sales up, but less messaging hurts Swisscom revenue as people use more apps, social networking
ZURICH, SWITZERLAND – Switzerland’s largest bank, UBS, turned in a glum first quarter financial report 2 May, showing a net profit of CHF828 million, down by 54 percent compared to the same period a year earlier. An accounting charge led to a loss at the investment bank: the value of UBS debt has risen, making it more expensive for the bank to buy back its own bonds. Bloomberg points out that “Chief Executive Officer Sergio Ermotti is shrinking UBS’s investment bank by almost half as stricter capital requirements and Europe’s sovereign-debt crisis hurt profits”, noting that Ermotti has called 2012 a year of transition for the investment bank arm of UBS.
Investors were not unhappy, however, with shares in the bank rising 6 percent in morning trading after the results were announced, reports Reuters.
The Financial Times reports that “the Swiss group issued an uncharacteristically upbeat forecast, emphasizing its ability to attract new money to its core private bank while shedding risk-weighted assets and boosting capital ratios”, while nevertheless cautioning that progress will be difficult until progress is made resolving the US federal budget problems and the eurozone debt crisis.
Social networks cut Swisscom revenue from messaging
Swisscom‘s net revenue slipped by 2 percent to CHF2.08 million in the first quarter, but it issued an update statement and pointed out that “capital expenditure in Swiss infrastructure increased by 24.1 percent to CHF 366 million. Swisscom is investing heavily in broadband network expansion throughout the country in order to further boost competitiveness. Headcount in Switzerland increased by 294 FTEs as a result of company acquisitions, network expansion and growth in customer services.”
An area hit hard was revenue from mobile phone messaging, down 28 percent to CHF59 million, which the company attributes to growing up of IP-based applications and social media. “Average revenue per mobile user per month (ARPU) declined by 4.3 percent to CHF 44.” Swisscom’s statement shows, despite good growth in the number of mobile access lines in Switzerland, up by 221,000, a 3.8 percent increase, and sales of 328,000 mobile devices, up 1.9 percent.
Smartphones accounted for 67 percent of mobile phone sales.
ZURICH, SWITZERLAND – Swisscom, the Swiss telecommunications giant, announced 14 December that it will “charge to income an exceptional impairment” of CHF1.2 billion as a result in the fall in value of Italian mobile company Fastweb, which it bought in 2007. The Italian firm has grown well in the corporate market, where it is number two, but it has suffered in the private telecoms market, according to its Swiss parent.
An “impairment test has now shown that, taking into account the higher capital costs and lower growth, Fastweb’s corporate value at the end of 2011 is approximately EUR 1.3 billion below the book value of net assets including goodwill.”
Swisscom has invested a total of euros 4.6 billion to buy the Italian company.
European construction growth "restrained" says Holcim
ZURICH, SWITZERLAND – The picture of the Swiss economy at the end of the third quarter 2011 is mixed, with some companies suffering badly from the overvalued Swiss franc while others appear to be sailing through the year relatively smoothly. This week’s results of financial results continues to feed the mix.
Swisscom shows net revenues down by 4.9 percent to CHF8.54 billion but net income up by 8.4 percent to CHF1.53b and it says the forecast for 2011 remains unchanged. “The 8.4% increase in net income to CHF 1,528 million is attributable to a provision booked in the previous year for VAT proceedings against Fastweb and a one-off amount which Fastweb will receive and which was booked in the third quarter of 2011 in settlement of a lawsuit.”
The telecommunications company notes that it created 400 fulltime equivalent jobs in Switzerland in 2011.
Holcim, Switzerland’s cement and construction multinational says that while construction grew briskly in emerging markets, it was “restrained” in North America and the eurozone. “Consolidated net sales decreased by 6.7 percent to CHF 15.5 billion, mainly because of exchange rate factors. On a like-for-like basis, it rose by 5.8 percent.” European results were affected by “the still outstanding sales of CO2 certificates”, but growth should remain steady in the region, the company says. “In the US, the ongoing insufficient demand for construction materials and the stabilization of prices at a low level both impacted results” but Holcim argues that its lean cost structure places it well to benefit from recovery when these markets improve.
Delighted Swiss mobile phone user
ZURICH, SWITZERLAND – Swisscom will cut roaming rates for mobile phones by 5 centimes a minute each year until 2014, starting 1 October.
The company announced the new rates Tuesday 20 September, saying the 25 percent reduction in roaming charges will kick in this year for subscribers, but only in 2012 for prepaid cards.
Swisscom currently charges CHF.085 a minute. The second 5 centime cut will take place in July 2012.
Swisscom not guilty says the high court
Bern, Switzerland (GenevaLunch) – A Swiss high court has decided in favour of Swisscom in a case brought by ComCo, the country’s competition commission.
In 2002 the commission began investigating what it ultimately decided was an abuse of the telecom’s dominant position, and it fined the company CHF333 million.
Swisscom took the case to court, but at the same time prices began to fall, and ComCo, in a press release (Fr) Wednesday 20 April, argued that while the court ruling might be seen as a setback, Comco had achieved its goal of seeing Swiss prices fall until they were in line with European termination fees.
These were 33.5 centimes in May 2005 and today they are 10 centimes, with Swisscom having undertaken a first price cut to 20 centimes in June 2005, shortly after ComCo released the results of its investigation
Swisscom was accused of overcharging for the “last mile”, or mobile phone termination fees, the fees charged by a mobile phone operator to other providers for terminating calls on its network.
The company has been targeted by ComCo in other cases, including one in 2009 where Swisscom was fined CHF219m for abusing its dominant position by squeezing out DSL competitors.
Switzerland has been making changes to its laws on cartels and regulations covering companies with dominant positions, in a bid to increase competition in the country.
Links to other sites: Dow Jones on Fox News, Global Competition Review
Expect delays says Swisscom
Zurich, Switzerland (GenevaLunch) – Swisscom mobile customers who use the Internet may experience “impaired service” in the next few hours, says the company. Its mobile data network was interrupted for several hours Monday, starting at 07:30 when a fault occurred on Swisscom’s GPRS network while maintenance work was being done.
About half of the customers had service again by 14:00, with the rest functioning by 17:30. The company noted that the mobile Internet service had to be restarted during the morning, causing interruptions in mobile data traffic.
On a normal day, Swisscom notes, several hundred thousand customers make use of mobile Internet services. The resumption of traffic meant that “an increase in data traffic is expected over the next few hours,” it said Monday evening, “which could lead to impaired service.
“The disturbance affected all mobile services requiring an Internet connection, from surfing the Internet to sending and receiving MMS messages and e-mails. Telephone services via the mobile network, the sending and receiving of SMS messages and connections to the fixed network (telephony, Internet, Swisscom TV) were not affected.
Zurich, Switzerland (GenevaLunch.com) – Swatch is well and truly out of the economic slump, but Swisscom is still weighed down by its purchase of Italy’s Fastweb. Financial results for the two companies published Wednesday 4 August show Swatch with half-year profits up 54.4 percent, to CHF465 million. Strong growth in Europe accounted for much of the 22 percent increase in sales and the company expects the second half of 2010 to be strong.
Swisscom saw its net profits fall from January to June by 14.4 percent, burdened by a CHF102 million provision for legal costs related to the continuing court case of its Italian company Fastweb. The subsidiary contributed euros 935 million to turnover.
A number of companies present their Q1 financial reports this week
Headwinds for Swiss, first quarterly loss since 2005
Zurich, Switzerland (GenevaLunch) - Swisscom Wednesday 5 May reported a first quarter net revenue increase of 1.3 percent to CHF2.95 billion, the bulk of which was due to a “slight recovery” in the economy. Profits for the first three months of the year fell by 22.1 percent to CHF 377 million, due to provisions for legal proceedings for subsidiary Fastweb, accused of fraud by Italian tax authorities.
Airline Swiss follows its parent, Lufthansa, with news of a first-quarter loss of CHF10 million, its first red-ink quarter in five years. After a difficult start to the year, business has picked up, but the company notes that the strength of the Swiss franc, continued steep rises in the price of jet fuel and low yields combined to keep revenues down. The company is not optimistic about a quick improvement, noting that the airline industry is facing continuing difficulties with currency, yield, uncertain fuel prices and structural problems, and “for the foreseeable future, Swiss sees only less-than-favourable developments.”
Won't be getting a new, shared logo in Switzerland
Bern, Switzerland (GenevaLunch) – The Swiss federal competition commission, Comco, will not allow a merger between France Telecom (Orange) and Sunrise to go ahead, it announced Thursday 22 April. The commission’s investigation into the cell phone market concluded that even though customers would benefit in some ways from a merger, the fact that Orange will soon become part of France Telecom means that Switzerland would be left with only two large cell phone companies that would dominate the market. Another large competitor would increase competition for Swisscom, the commission noted, but a third company would be highly unlikely to gain a foothold, so the positive impact on competition would be offset by having just two operators.
Zurich, Switzerland (GenevaLunch) – The founder of Fastweb, Italian company purchased to much fanfare by Swisscom in 2007, has been arrested in Rome. Silvio Scaglia, one of Italy’s wealthiest men and for several years the darling of high tech Italy, was arrested as he returned from a business trip abroad. He was taken to Rebibbia prison for questioning over his role in a fiscal fraud and money laundering ring that authorities say involves more than 50 Italian business people.
Scaglia issued a press release earlier saying that he is not guilty and is anxious to be interviewed by authorities in order to clear up the matter.
Fastweb came to international business attention in 2007 when Scaglia pushed it to the forefront of peer-to-peer web TV.
Links to other sites: Swisscom, TSR (Fre), Wall Street Journal
Bern, Switzerland (GenevaLunch) – The monthly fee charged by cable companies Cablecom and Swisscom which is turned over to copyright holders may be raised to CHF0.80 beginning in January 2010, if a decision by the Federal Arbitration Commission for copyright is not appealed by the the copyright holders’ representatives. These had asked for a monthly fee of CHF1.00 per subscriber per month, the Commission announced 21 December.
In Switzerland each set-top box rented or sold capable of storing copyrighted content broadcast by the cable companies is subject to the fee. The fee is also charged if storage space is rented out on a server.
One less place to change in a hurry - Swisscom to close phone booths
Bern, Switzerland (GenevaLunch) – Swisscom wants to close down little-used phonebooths around Switzerland, reports Swiss-German weekly Sonntagszeitung. There are still about 8,100 phone booths on public land, but many are not used more than once or twice a week. This is down from 12,900 in 1998, when Swisscom was still legally obliged to maintain at least one phone booth in each commune, no longer the case.
Swisscom sold 79,000 of the Apple iPhone 3GS model between its 19 June launch and the end of September 2009, according to industry media reports
Zurich, Switzerland (GenevaLunch) – Swisscom, Switzerland’s dominant telecommunications company, posted revenues of CHF8.92 billion Wednesday 11 November, a figure 1.8 percent below that for the same period a year earlier. Net income rose, however, by 16.6 percent to CHF1.31b, “on a par with the previous year”, says the company. The results were published just days after the company was fined CHF219 million, accused by Switzerland’s competition watchdog of earlier (2007) having a broadband pricing policy that hampered competition. The company, which once had a monopoly of the Swiss industry, has denied the charges. In today’s press release on the company’s results for the first nine months of the year it says that the weak Swiss market was responsible for the lower revenues.
Links to other sites: Swisscom, Trading Markets
© 2009 Swisscom
Bern, Switzerland (GenevaLunch) – Swisscom has been handed a fine for CHF 219 million for alleged anti-competitive behaviour in its DSL business until 2007. The company says it will appeal the decision by the federal Competition Commission (ComCo) 5 November, arguing that Swiss consumers have ample choice in the supply of DSL service.
ComCo had argued that Swisscom, the dominant market operator and owner of most of the infrastructure, set the price it charged to its competitors too close to what it charged its customers, thus squeezing out its competitors.
Links to other sites: Romandie News, Swisscom, TSR
Zurich, Switzerland (GenevaLunch) – Cablecom will offer video on demand throughout Switzerland in 2010, after a three-month trial in the Zurich area, the company told Swiss-German Sonntag newspaper. Hollywood films but also erotic content will be offered, with erotic movies counting for more than half of the films watched during the trial. Swisscom has been offering video on demand for three years, but it does not offer erotic content.
Related: Rapid TV News
Vevey and Bern, Switzerland (GenevaLunch) – Food and drink giant Nestlé 12 August announced results down 1.5 percent in the first half of 2009 to CHF 52.3 billion in group sales worldwide, compared to the first-half 2008. The Vevey-based company reported that organic growth was up 3.5 percent in the period, with a positive real internal growth rate of just 0.5 percent. Citing a “challenging business environment” worldwide, including a strong Swiss franc, the company nevertheless said it had significantly improved cash flow and reduced debts, improving over-all capital efficiency.
Swisscom announced a drop in revenue of 1.2 percent to CHF 5.9 billion in the first half of 2009, 12 August.
Swisscom announces profits
Bern, Switzerland (GenevaLunch) – Swiss communications giant Swisscom announced a drop of 0.6% of net sales to 2.9 billion francs in Q1, however, its net profit beat forecasts with a 14% increase to 485 million francs.
Swisscom says a slowdown for 2009 is still expected but profits should reach 9.2 billion francs.
Geneva and Lausanne, Switzerland (TSR, Fre) – Swiss will be doubling the capacity and also the speed of its Internet connection lines in coming months, and enlarging its mobile phone base by 20 percent, it has told TSR. The combination should create a major improvement in mobile phone service, particularly Internet via mobile phone. A longer term project will take two years but should provide regular wifi service in CFF double-decker and Intercity trains, where reception is currently patchy.
Lower calling rates, sweet news!
Bern, Switzerland (GenevaLunch) – Mobile phone owners in Switzerland should expect to see the cost of using their phones fall, thanks to a significant cut in basic prices that Swisscom can charge its competitors.
Swisscom, which announced 20 March it was buying The Phone House‘s Swiss branches, has been told to slow down by Comco, the competition watchdog, reversing an earlier decision. The government has concluded that since The Phone House also sells Swisscom products, such as DSL subscriptions, Comco should take a closer look. Swisscom has been notified that it must suspend all activity linked to the deal. The telecommunications giant says it plans to submit its plans to Comco in the next few days.
Photo reproduced by permission, Swisscom
Bern and Lausanne, Switzerland (Tribune de Geneve, Fre) – Swisscom’s monopoly on telephone and Internet access should have ended in April when the "last kilometre" arrangement, which has kept ownership of the lines in Swisscom’s hands, was scheduled to end. Legal wrangles and administrative hassles have in fact kept the change from occurring, and Swisscom continues to charge its own clients SFr25.25 a month for Internet access while other companies, which must rent the lines, are charged SFr33 a month, a cost passed on to their customers.
