Notes to the consolidated financial statements - Swisscom

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Review of the Group’s results Mobile CHF in millions 2000 2001 Connectivity voice Connectivity roaming Connectivity data and value-added services Wholesale mobile Other products Revenue from external customers Intersegment revenue Net revenue Segment expenses (incl. intercompany) EBITDA Margin as a % of net revenue Depreciation EBIT Postpaid Prepaid Total In 2001 Mobile increased revenue by 14.5% year-on-year to CHF 3,127 million. The Swiss mobile communications market is growing at a slower rate, as penetration has now reached 70%. Mobile participated successfully in market growth and defended its high market share. Its customer base increased by 6.5% to 3,373 million subscribers. Growth stemmed mainly from postpaid customers, who generate higher revenues than prepaid customers. The number of postpaid customers increased by 11% to 2,152 thousand subscribers. The number of prepaid customers was adjusted at year-end to take account of 207,000 inactive customers. After this adjustment, the number of prepaid customers remained almost constant at 1,221 million (–0.7%). Voice revenue rose 14.9% year-on-year to CHF 2,092 million, supported by the extended customer base. There were no significant tariff adjustments in the Swiss market. In the area of data traffic, the number of text messages (SMS) doubled to 2,299 million, pushing up revenue by 79.6% to CHF 273 million. At CHF 83, the average revenue per user per month (ARPU) fell short of the previous year’s CHF 89, as average telephony traffic per new customer is comparatively low. At CHF 280 million, wholesale revenue was down 13.3% year-on-year as competitors continued to expand their networks and therefore did not require the Swisscom network as extensively. Overall, operating expenses increased by 4.9%. Personnel expenses and the cost of goods and services purchased rose, driven by growth in this segment. Network operating and maintenance costs also rose. Customer acquisition costs, however, substantially reduced year-on-year, mainly as a result of the decline in the number of new customers and the reduction in dealer commissions in the prepaid area. EBITDA improved 26.5% year-on-year to CHF 1,875 million representing a margin of 47.1%. EBIT increased by 35.4% to CHF 1,585 million. 8 Swisscom Review of the Group’s results 1 820 373 152 323 62 2 730 762 3 492 2 009 1 483 42.5% 312 1 171 2 092 381 273 280 101 3 127 856 3 983 2 107 1 876 47.1% 291 1 585 Number of subscribers at period-end in thousands 2000 2001 1 939 1 229 3 168 2 152 1 221* 3 373 Change 14.9% 2.1% 79.6% –13.3% 62.9% 14.5% 12.3% 14.1% 4.9% 26.5% –6.7% 35.4% Change 11.0% –0.7% 6.5% * The number of prepaid customers was adjusted at year-end to take account of 207,000 inactive customers. The prior year number has not been restated. Customers who have not made or received a call in more than 12 months are regarded as inactive. Without this adjustment, the number of customers would have been 3,580 thousand, i.e. an increase in total subscribers of 13.0%.
debitel Impairment of goodwill CHF in millions 2000 2001 Germany International Net revenue Segment expenses EBITDA Margin as a % of net revenue Depreciation EBIT 9 Swisscom Review of the Group’s results 3 026 967 3 993 3 826 167 4.2% 39 128 2 738 1 070 3 808 3 621 187 4.9% 51 136 Number of subscribers in thousands 2000 2001 Germany: Mobile Germany: Fixed-line, Internet International Total 5 991 383 2 231 8 605 7 246 401 2 354 10 001 Change –9.5% 10.7% –4.6% –5.4% 12.0% 30.8% 6.3% Change 20.9% 4.7% 5.5% 16.2% The number of subscribers increased in all countries and, in 2001, passed the 10 million mark for the first time. The number of mobile communications subscribers in Germany was up 20.9% year-on-year to 7,246 thousand, enabling debitel to further extend its position as Europe’s largest network-independent mobile service provider. In October 2001 debitel acquired the Dutch company Talkline Nederland, which has around 160,000 postpaid customers. The company has been fully integrated into debitel Nederland. debitel’s net revenue fell 4.6% to CHF 3,808 million. Adjusted for the currency translation effect, this represents a 3% fall in revenue. Growth in the German mobile communications sector has weakened compared with the previous year. Tariff reductions and lower commissions and hardware sales could not be offset by higher revenue from call charges resulting from an increase in the number of subscribers and resulted in a 9.5% fall in mobile revenue in Germany. By contrast, revenue from international business increased by 10.7% as a result of the positive trend in France, the Netherlands and Denmark. EBITDA increased by 12.0% to CHF 187 million and EBIT by 6.3% to CHF 136 million. EBITDA in Germany fell by 3.7% to CHF 158 million. This was due to decreased billing margins and increased customer retention costs. In contrast, the EBITDA of companies operating outside Germany improved from CHF 3 million to CHF 29 million. In each country debitel posted a positive operating result and in particular, results in the Netherlands and Denmark showed a marked improvement. debitel entered into agreements in 2001 with network operators D2 Vodafone plc, T-Mobile, E-Plus Mobilfunk and Quam. This secures the existing business model and enables Debitel to also collaborate with these network operators in GPRS and UMTS. When debitel was acquired in 1999, two shareholders were given put options to sell a total of 20% of the outstanding shares to Swisscom. One option to sell 10% of the shares was exercised in January 2001 for CHF 468 million, and the second, also for 10% of the shares, was exercised in July 2001 for CHF 460 million. The acquisitions were accounted for under the purchase method. The transactions resulted in goodwill totaling CHF 906 million. As a result of significant changes in the telecommunications sector, including the expected delay in the implementation of the third generation system, UMTS, Swisscom concluded that it was necessary to review the carrying value of the assets of debitel. This review calculated a value per share of EUR 18, resulting in an impairment of CHF 1,130 million. See Note 25 to the consolidated financial statements.
Page 1 and 2: Financial Review 2001
Page 3 and 4: Review of the Group’s results
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Page 16 and 17: Consolidated balance sheet CHF in m
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Page 20 and 21: Notes to the consolidated financial
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Notes to the consolidated financial
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Financial statements of Swisscom AG
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Swisscom AG Income statement CHF in
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Notes to the financial statements 1
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Proposed appropriation of retained
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Notes to the consolidated financial statements - Swisscom

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