Swisscom

With revenue of CHF 9.7 billion in 2005 and a workforce of 16,088 (FTEs), the Swisscom Group is Switzerland's leading telecoms company. Swisscom is present nationwide, delivering all services and products for mobile, fixed and IP-based voice and data communications.

In 2005, Swisscom increased the number of ADSL access lines from 802,000 to 1,098,000. In addition, at the end of December 2005 Swisscom Fixnet had 2.9 million analog telephone lines and 0.9 ISDN lines. Bluewin is Switzerland’s largest online portal for residential customers. Swisscom Fixnet has also established itself as a multimedia provider with the Bluewin TV 300 and Bluewin Phone products. As well as carrying out network maintenance, Swisscom Fixnet invests some CHF 400 million to CHF 500 million annually in upgrading the network.

Swisscom Mobile operates a nationwide GSM network (900/1800 MHz) that serves four million customers. The network has been enhanced with EDGE since spring 2005. Furthermore, Swisscom Mobile’s UMTS network already covers around 90% of the populated area of Switzerland. Swisscom Mobile is the first network carrier in Switzerland to roll out a new turbo network called HSDPA. Even at its inception it is approximately five times faster than UMTS, thus achieving the same speeds as ADSL connections.

Swisscom Solutions, the point of contact for business customers, specialises in providing complex and customised integrated solutions. Swisscom IT Services is one of the leading providers of IT services in Switzerland. Going forward, Swisscom aims to maintain its market leadership in its core businesses of fixed network and mobile communications, push ahead with systematic expansion in broadband communications and make further inroads on the path to the multimedia future.

Changing customer needs open up new growth opportunities

Customer needs and industry trends are changing. The demand for interactive services is increasing, and communication has to be guaranteed irrespective of time or place. The importance of content, attractive applications and information management is rising, and technology is migrating to standardized IP platforms. This is opening up opportunities for Swisscom to develop attractive new offerings. Thanks to a very broad market position, Swisscom can create new added value for the customer with bundled offerings and drive forward into fields that are being transformed in related markets under the influence of digitization and broadband penetration. Swisscom is therefore looking to grow in the field of convergence and multimedia, in the so-called "TIME" market. This comprises applications in the increasingly convergent areas of telecommunications, IT, media and entertainment. The aim is to offset the decline in traditional activities with new activities from around 2008 / 2009 onwards. The future business of successful telecommunications companies looks set to be very different from their current activities: by moving into the TIME market, Swisscom can respond to changing customer needs.

New strategy based on three pillars: strengthening of core business with convergent offerings; further growth in business customers solutions and targeted expansion projects

The most important pillar of the strategy is the strengthening of core business by offering a comprehensive portfolio of multimedia services and first-class customer service. Swisscom aims among other things to provide customers with highly attractive offerings from a comprehensive range of products, services, and network access options. Individual products will be increasingly bundled into all-round packages. Customers’ trust will be won with an improved, rapid and competent customer care with simplified access to customer contact points. Swisscom is looking to position itself as a Swiss role model in the field of customer service.

The second pillar of the strategy consists of expansion in activities in the business customer market. Swisscom plans to offer international companies with a decision-making center in Switzerland a one-stop shop for international services, e.g. with the help of cross-border alliances. Swisscom's broad-based competence in banking, healthcare and telecoms solutions is to be further expanded. In addition, Swisscom is looking to achieve substantial growth in the outsourcing market.

The third pillar covers expansion projects in areas where Swisscom has proven core competences. Firstly, opportunities are available to add value to the different customer segments in other countries by incorporating the Group's specialized know-how. Possibilities are emerging in countries where, for example, there is a pent-up demand for new technologies in order to address unsatisfied customer needs. There is also expansion potential in parts of the current business in Switzerland where Swisscom is not the market leader. Secondly, Swisscom plans to penetrate areas close to its current core business that are undergoing major changes under the influence of digitization and broadband market penetration (e.g. telemedicine).

Rigorous investment criteria will apply in implementing the strategy. Synergies or business logic must justify the price of an acquisition.

*Net income after deduction of minority interests
** Increase primarily attributable to Antenna Hungária (858 FTEs)