Sunrise UPC gains customers at the start of the year and plans new umbrella brand
The merged telecommunications company Sunrise UPC continued to grow its customer base in the first quarter. A new umbrella brand is now being planned.
"All our growth engines are running at full speed," Sunrise-UPC CEO André Krause told news agency AWP on Thursday. "We are probably the fastest growing telecom company in Switzerland at the moment."
The combined company attracted 42,000 net mobile (postpaid), 14,400 Internet and 6,600 TV customers in the first quarter. Sunrise UPC had already increased its customer base in the final quarter. By comparison, top dog Swisscom recently reported significantly lower figures for the first quarter.
Hardly any more potential for prices
Revenue nevertheless decreased minimally by 0.3 percent on a comparable basis. The absolute amount was only given in the reporting currency of the parent company Liberty Global, i.e., in U.S. dollars. A conversion brings the figure to around CHF 770 million.
The price war in the Swiss telecom market is likely to have been a key reason why revenue stagnated despite the larger number of customers. "The promotions in recent months have shifted the price level a bit, but now there is not much potential downward," Krause commented.
He also attributed the revenue stagnation to a negative covid effect. In particular, the lack of international travel had had a negative impact on roaming revenues. "Without this effect, we would have already seen slight growth in the first quarter." Growth is then expected for the year as a whole.
Merger costs burden profit
Profitability declined more sharply than sales in the first quarter, as shown by the decline in operating profit (EBITDA) on a comparable basis. According to Krause, around two thirds of the 7.3 percent decline is the result of integration costs.
As is known, the company expects merger costs of 150 million Swiss francs in the current year. This also includes expenses for the planned job cuts, which will include around 600 jobs.
"Apart from that, we have invested a lot of money to grow faster - for example, in marketing and in the business customer area." For the full year, operating profit is now expected to decline by a low single-digit percentage.
From now on, synergies are expected to have a positive impact, and not only on the cost side. The company recently launched its first joint products. And there is still a lot of potential here, it was emphasized. Only one in three customers has a product that combines mobile communications, TV and Internet.
No details on new brand
Krause's goal is to get the integration over the line quickly. "We are currently moving forward with our integration plan a little faster than we originally thought."
A new umbrella brand is a next big step. "By the end of the year or the beginning of next year, this brand name should be fixed," Krause said. Whether the trend is toward Sunrise, UPC or a new name, he would not say.
However, it has already been decided that the company will rely on the new TV platform from the parent company Liberty Global in the future. This will still include a TV box, but it will be significantly smaller than the current one. "We want to launch this box in the fourth quarter, provided the current global shortage of semiconductors does not thwart this schedule," the CEO said. (SDA)
