Swisscom grew in 2014
Swisscom posted growth in nearly all areas in 2014. Revenue, profit, and the number of customers all increased. Bundled offers and flat-rate cell phone plans, in particular, were booming.
Swisscom CEO Urs Schaeppi had every reason to be happy on Thursday. For the first time in a long time, his company has managed to increase its profits along with its turnover. This rose by 0.6 percent to 1.7 billion Swiss francs. At 11.7 billion Swiss francs, turnover last year was 2.4 percent higher than in 2013.
Swisscom's top sellers in 2014 were, on the one hand, the so-called bundled offers, sales of which increased by almost a quarter to CHF 1.9 billion, and, on the other hand, mobile phone subscriptions that allow customers to make unlimited calls and surf the Internet. At the end of 2014, Swisscom already had 2.1 million customers with such fixed-price contracts.
The next digital revolution
According to Schaeppi, these trends also show where the telecoms industry is heading. The volume of data, especially on the mobile network, will continue to increase massively. In recent years, the volume has doubled every year.
The main driver behind this is the continuing advance of networking. According to Schaeppi, it will be normal in future to be online anytime, anywhere and with many more devices and applications. One consequence of this will be that the boundaries between many sectors will disappear.
According to Schaeppi, Swisscom sees this trend primarily as an opportunity. Telecoms and IT are becoming increasingly important as a result. Swisscom is therefore continuing to invest heavily in its networks.
Swisscom becomes an advertising intermediary
However, Swisscom also wants to compensate for the decline in normal telephone services with new activities. Last year, for example, Swisscom founded a subsidiary called Swisscom Health to bundle its activities in the healthcare sector.
The telecoms company is also increasingly entering the advertising market. Last year, Swisscom bought the advertising marketer Publigroupe in order to acquire the Swiss search engine Local.ch. According to Schaeppi, the plan is to merge Local.ch with Tamedia's search service Search.ch.
This merger of the existing Swiss market leaders is important in order to be well positioned in the advertising market, said Schaeppi. The competition is not other Swiss providers, but the really big Internet companies such as Google and Facebook.
Another future market for Swisscom is the key account business. Following the merger of two business areas at the beginning of 2014, a significant increase in orders of 16% has already been achieved in this area.
One trend in this area is cloud computing. Swisscom intends to move a large part of its own work and production processes to central data storage - so-called clouds - this year.
Strong franc not a problem for the time being
However, 2015 will also be the year in which Swisscom will have to digest the franc shock. According to Schaeppi, a model calculation has shown that with a euro exchange rate of one franc, revenue will be almost CHF 400 million lower and operating profit around CHF 100 million lower.
However, these effects are almost exclusively translation effects that do not affect the margin. "Our business is not heavily dependent on either the euro or the dollar." Swisscom only purchases materials worth around 200 to 300 million euros and dollars respectively (SDA).
