Swisscom mobile revenues flat despite growing wireless data consumption

Swisscom relied on its fixed-line business for growth in the first quarter of 2014, as growing subscriber numbers at the Swiss incumbent's wireless business failed to translate into higher revenues.

Total net income fell 4.4 per cent year on year to 373 million Swiss francs (€306 million/$426 million) in the first three months of 2014, as mobile subscription revenues at Swisscom's domestic business remained flat on the same period of 2013 at 673 million francs.

The company noted mobile revenues were hit by lower roaming charges during the period, as well as growth in the number of subscribers signing up to its Natal Infinity tariff, which offers unlimited calls and SMS to all Swiss networks. Overall, Swisscom grew the number of mobile lines in use by 22,000 year-on-year to 6.4 million at the end of the first quarter.

Swisscom said 1.8 million of its mobile subscribers were on the Infinity option by end-March, and that the total number of post-paid users grew 25,000 during the quarter, more than offsetting a 3,000 fall in the number of pre-pay users. The growth in Infinity customers contributed to an 83 per cent year-on-year rise in mobile data traffic, and the company noted subscribers that switched to the unlimited tariff transmitted four times more data than its other subscription users.

The company's fixed-line business relied on growing sales of bundled services--typically a combination of TV, telephony, and internet access--for its revenue growth during the quarter. Sales of bundled services grew 25.8 per cent year on year, while single fixed-line subscription income fell 10.3 per cent.

Fastweb, the operator's Italian ISP, recorded a marginal 0.5 per cent drop in revenue during the quarter, as lower interconnection revenue was offset by declines in operating costs.

Chief executive, Urs Schaeppi, said Swisscom's performance in the opening quarter of 2014 was "encouraging", pointing to "growth in revenue and operating income despite price erosion."

Swisscom is now on track to achieve its first like-for-like growth in profit since 2008, Bloomberg noted, adding that the company's revenues in the first quarter were some 50 million francs higher than the average predicted by analysts in a poll.

For more:
- see Swisscom's first quarter press release
- see Swisscom's full earnings report [PDF]
- see this Bloomberg article

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