Swisscom's net revenues in 2018 amounted to CHF 11.71 billion, a slight increase of 0.4 percent year-on-year and better than its outlook for flat revenues. Annual EBITDA fell 1.9 percent to CHF 4.21 billion, in line with guidance, and the EBITDA margin was down from 36.8 percent in 2017 to 36.0 percent in 2018. For 2019, Swisscom expects net revenue to drop to around CHF 11.4 billion, EBITDA to improve to over CHF 4.3 billion and capital expenditure of around CHF 2.3 billion.
The increase in EBITDA this year is largely due to new accounting rules on leasing, which will boost by the result by around CHF 200 million, Swisscom said. In addition, the operator plans continued cost reductions, of around CHF 100 million in 2019 and 2020. The capex forecast, down slightly from CHF 2.4 billion in the past two years, does not include any payments for the latest spectrum auction. The company left its annual dividend unchanged at CHF 22 per share and said it expects to pay the same amount next year.
Fourth-quarter revenue was down by 1.1 percent year-on-year to CHF 3.03 billion. Quarterly EBITDA grew by 4.4 percent to CHF 982 million, and the EBITDA margin was 32.5 percent, compared to 30.8 percent in Q4 2017.
An increasingly saturated market, pressure on prices and costs and fierce competition in its core business are all having an impact on Swisscom’s operations and activities, the company said. In 2018, Swisscom's net income fell 3 percent to CHF 1.52 billion. In contrast, in Q4 alone, net income grew by 3 percent year-on-year to CHF 308 million.
Fastweb leads growth, Swiss revenues lower
In 2018, the fastest growing segment of the group in terms of customers was the mobile segment in Italy, which increased by 34.5 percent year-on-year. The Italian subsidiary, Fastweb, reported strong revenue and customer growth. Revenue rose year-on-year by EUR 160 million or 8.2 percent to CHF 2.104 billion.
Revenue in the Swiss core business fell by 2.7 percent year-on-year to CHF 8.817 billion in 2018, mainly due to discounts on bundled offerings and price pressure in the corporate business segment. In addition, more and more customers are opting out of a separate fixed line for telephony, with the number of connections falling by 259,000 year-on-year to around 1.79 million. In Q4 alone, the company lost 58,000 lines.
Swisscom was successful with the inOne offer; 2.3 million customers opted for a service bundle combining mobile communications and fixed-line products such as broadband, TV and telephony at year-end.
There are also signs of market saturation in mobile telephony, as the number of mobile lines fell year-on-year by 1.3 percent to 6.55 million at end-2018, which is 39,000 less than in September 2018. Despite the fiercely contested market, Swisscom managed to keep its market share in mobile telephony stable at 60 percent and even increased its market share in TV to 35 percent from 33 percent in 2017.
The number of TV connections rose by 3.5 percent year-on-year to 1.52 million as of 31 December, after adding 9,000 during Q4. Broadband retail access lines slightly increased, by 0.9 percent year-on-year, to 2.03 million, with 3,000 customers acquired during Q4.
In total the number of RGUs in Switzerland was down by 2.3 percent to 11.89 million.
