Sunrise UPC slowed by rebranding in second quarter
The rebranding last May has slowed Sunrise UPC’s growth. As part of the phase-out of the UPC brand, the telecommunications group lost just over 15,000 TV, internet, and landline customers in the second quarter. Revenue and operating profit stagnated from April through the end of June.
The second quarter was one of the most intensive in the integration of Sunrise and UPC, said company CEO André Krause in an interview with news agency AWP on Friday. He said the new Sunrise unified brand was introduced and a new product portfolio was launched. The Sunrise UPC company was renamed Sunrise. The total cost of the change was 43.6 million francs.
Following the significant increase at the start of the year, sales from April to June stagnated at 739.1 million Swiss francs. This is a slight minus of 0.3 percent. Meanwhile, segment-adjusted operating profit before depreciation and amortization (EBITDA) rose by 0.5 percent to CHF 266.8 million, the number two Swiss telecom provider announced. Excluding integration costs, EBITDA would have increased by a significant 4.1 percent, said CFO Jany Fruytier.
UPC advertising scaled back
Before the brand change, advertising for the UPC brand was scaled back. As a result, fewer new customers were acquired, which led to a net loss of broadband customers, Krause explained. As a result, sales to fixed-network residential customers (including Internet, TV and telephone) fell by 4.6 percent to CHF 304.2 million.
However, he said the dip in customers was only a temporary effect. "We will make up for it," said Krause. That is why he is not losing any sleep.
In contrast, Sunrise continued to grow in mobile communications. The number of subscription customers rose by a good 47,000, and prepaid customers also increased. Mobile phone sales to private customers grew by 3.6 percent to CHF 295.5 million. Sales to corporate customers also increased by 1.8 percent to CHF 136.4 million.
New products in good demand
The new product portfolio has been very well received. Demand for the bundled subscriptions has been very good, he said. "I am very pleased with the numbers given the brand change," Krause said.
In addition to the renewal of products and the brand, the partnership with the fiber optic network provider Swiss Fibre Net was expanded in the second quarter. Sunrise secured long-term usage rights for access to the fiber-optic networks of all Swiss Fibre Net network partners in all parts of Switzerland.
This will enable the second-largest telecoms group to broaden its coverage outside its own cable network and not rely solely on Swisscom's fiber-optic network. (SDA)
