Shareholders' Letter

Market shares mobile subscribers in Switzerland* in %
17%
Orange
21%
Sunrise
*Estimate Swisscom
62%
Swisscom
Market shares broadband access lines in Switzerland* in %
17%
Others
28%
Cable
operators
*Estimate Swisscom
Mobile communications market
Three companies operate their own nationwide mobile networks in Switzerland: Swisscom,
Orange Switzerland and Sunrise. Orange Switzerland is a subsidiary of France Telecom. Sunrise
was sold in October 2010 by its Danish parent company TDC to CVC Capital Partners. Compared
with earlier years, 2010 saw slower growth (4%) in the number of mobile lines (SIM cards) as a
result of already high market penetration. In aggregate, the three network operators operated
around 9.3 million lines at the end of 2010. which exceeds the total population. with many customers
using additional SIM cards for mobile computers. smartphones and other devices.
55%
Swisscom
Development of mobile subscribers in thousand
8,000
6,000
4,000
2,000
0
5,359
2,121
3,238
2008
5,602
2,176
3,426
2009
5,828
2,213
3,615
2010
Development of broadband access lines in thousand
2,000
1,500
1,000
500
0
1,765
431
1,334
2008
1,809 1,810
331 226
1,478
1,584
2009
2010
Prepaid
Postpaid
In 2010 Swisscom increased the number of mobile lines in tandem with growth of the overall market
by some 4%, defending its market share of 62%. Switzerland has a much higher percentage of
postpaid customers (around 62%) compared with the European average of 45%. Prices for mobile
services were squeezed again by the competition in 2010, which resulted in a corresponding
decline in average monthly revenue per user. The increasing use of smartphones also led to strong
growth in mobile data traffic in 2010.
Broadband market
The two most widespread access technologies for fixed-line broadband connections in Switzerland
are the telephone network on a DSL basis (Digital Subscriber Line) and the cable television
network. At the end of 2010, the number of retail broadband connections in Switzerland totalled
some 2.8 million, which corresponds to around 35% of the population, making market penetration
in Switzerland significantly higher than the European average. In Europe, this high broadband penetration
is exceeded only by Denmark, the Netherlands and Norway.
Wholesale
Retail
In the last few years, the growth in telephone-based DSL broadband connections has far outpaced
the broadband connections provided by cable network operators, a trend which continued in 2010.
DSL broadband accounted for 79% of new connections, representing an increase in market share
of all broadband connections at the end of 2010 to around 72%. Of these, Swisscom end customers
accounted for 55% and Swisscom wholesale offerings together with fully unbundled lines around
17%.
Management Commentary 20 | 21
Environment, strategy and organisation