Shareholders' Letter

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Business Overview Swisscom’s financial reporting focuses mainly on the three operating divisions: Swisscom Switzerland, Fastweb and Swisscom IT Services. Swisscom Switzerland Swisscom Switzerland comprises the customer-focused divisions Residential Customers, Small and Medium-Sized Enterprises, Corporate Business and Wholesale, as well as the Network & IT division. These divisions are reported separately under segment reporting. In CHF million, except where indicated 2008 2009 2010 Net revenue 8,681 8,453 8,566 Segment result before depreciation and amortisation 3,768 3,675 3,804 Margin as % of net revenue 43.4 43.5 44.4 Capital expenditure 1,171 1,219 1,204 Number of full-time equivalent employees 12,034 11,866 11,716 Residential Customers The Residential Customers segment is the contact partner for fixed-line and mobile customers, provides Switzerland with broadband Internet access and also serves a growing number of Swisscom TV subscribers. This segment also combines national and international telephone and data traffic, value added services, handset sales and directories. Small and Medium-Sized Enterprises The Small and Medium-Sized Enterprises segment serves the whole of Switzerland, providing the full range of products and services, from fixed-line and mobile communications to Internet and data services to IT infrastructure maintenance and operation. The SMEs receive integrated solutions tailored to their needs: compatible lines, secure access, professional services and intelligent networks. Corporate Business Whether voice or data, mobile or fixed network, individual products or integrated solutions, the Corporate Business segment, a leading provider in the field of business communications, supports customers in the areas of planning, implementation and operation of their IT and communications infrastructure with cost-effective solutions and reliable services. Wholesale The Wholesale segment offers Swiss telecoms providers an array of wholesale services that allow them to implement their own service offerings. These include regulated interconnection services, access to the access network infrastructure (unbundled subscriber lines, cabling, co-location services) as well as broadband and data services. The Wholesale segment also includes roaming with foreign providers. Network & IT The Network & IT segment builds, operates and maintains Swisscom’s nationwide fixed network and mobile communications infrastructure. It is also responsible for the respective IT platforms, and is driving forward migration of the networks to an integrated IT and IP-based platform (All-IP). Expenses incurred are not charged to the other segments. The Network & IT segment therefore reports only expenses but no revenue.
Fastweb Fastweb is the third largest broadband telecoms company in Italy. In EUR million, except where indicated 2008 2009 2010 Net revenue 1,708 1,853 1,880 Segment result before depreciation and amortisation 547 551 433 Margin as % of net revenue 32.0 29.7 23.0 Capital expenditure 438 434 427 Number of full-time equivalent employees 3,077 3,125 3,123 Fastweb offers products and services for voice, data, Internet and TV, as well as a full range of VPN and mobile communication services. Fastweb offers its services in all larger towns and cities in Italy as well as in all market segments. The services are offered directly via the company’s own fibre-optic network, via unbundled access lines as well as via wholesale products of Telecom Italy. Other operating segments and Group Headquarters Other operating segments mainly consist of Swisscom Participations and Swisscom IT Services, which is a leading provider of information technology services in Switzerland. In CHF million, except where indicated 2008 2009 2010 Net revenue 1,840 1,733 1,742 Segment result before depreciation and amortisation 190 191 215 Margin as % of net revenue 10.3 11.0 12.3 Capital expenditure 201 123 130 Number of full-time equivalent employees 4,832 4,488 4,708 Other operating segments mainly comprise the operating segments Swisscom IT Services, Swisscom Participations and Swisscom Hospitality Services. Swisscom IT Services’ core business encompasses the realisation of large IT projects (including consultancy and the implementation of new systems), the management of complex IT infrastructures, end-user services and service desk services. Swisscom IT Services is also the leading provider of integrated banking solutions, including peripheral systems, as well as Business Process Outsourcing (BPO) for the Swiss financial sector. In addition, Swisscom IT Services offers its customers the full range of SAP services, from SAP consulting to SAP industry solutions to SAP operation. The sole mission of the companies belonging to the Swisscom Participations segment is to identify and tap growth potential in areas closely related to Swisscom’s core business. Swisscom Hospitality Services specialises in serving the communications needs of the hotel industry Group Headquarters chiefly comprises the Group divisions Finance & Controlling, Strategy & Business Development, Group Communications and Human Resources. Introduction 4|5 Business Overview
Page 1 and 2: 2010 Annual Report
Page 3 and 4: Our promise We bring people togethe
Page 5: KPI’s of Swisscom Group In CHF mi
Page 9 and 10: Swisscom share performance in 2010
Page 11 and 12: Changes to the Board of Directors T
Page 13 and 14: Management Commentary We combine th
Page 15 and 16: Environment, strategy and organisat
Page 17 and 18: See www.swisscom.ch/ networkcoverag
Page 19 and 20: Development of exchange rate CHF/EU
Page 21 and 22: Regulatory developments in Switzerl
Page 23 and 24: Market shares mobile subscribers in
Page 25 and 26: Market shares IT services in Switze
Page 27 and 28: Subsidiaries Associates 6 Board of
Page 29 and 30: Maximise Maximise our market positi
Page 31 and 32: Enterprise value In CHF million, ex
Page 33 and 34: Share performance 1998-2010 in CHF
Page 35 and 36: Employees Swisscom offers employees
Page 37 and 38: Full-time equivalent employees at e
Page 39 and 40: Staff development Swisscom makes ta
Page 41 and 42: Employee satisfaction In May 2010 S
Page 43 and 44: Staff recruitment Recruiting new st
Page 45 and 46: Financial review Group Development
Page 47 and 48: Share of operating segments in net
Page 49 and 50: Net financial result Net financial
Page 51 and 52: Operating segment results Developme
Page 53 and 54: Swisscom TV customer base increased
Page 55 and 56: Development of third-revenue in CHF
Page 57 and 58:
Development of third-revenue in CHF
Page 59 and 60:
Development of third-revenue in EUR
Page 61 and 62:
Quarterly review 2009 and 2010 1. 2
Page 63 and 64:
Quarterly review 2009 and 2010 1. 2
Page 65 and 66:
Due to the early termination of cro
Page 67 and 68:
Development of net debt in CHF mill
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Development of capital expenditure
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Risks Taking calculated risks - the
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Measures are in place for most risk
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Environmental and health risks Elec
Page 77 and 78:
Ecology Leading role in business pr
Page 79 and 80:
Objectives/Strategy Board of Direct
Page 81 and 82:
See www.swisscomnature.ch/ CRblog P
Page 83 and 84:
Materiality matrix Swisscom 2010 Ma
Page 85 and 86:
See report page 100 See www.swissco
Page 87 and 88:
Environmentally friendly products a
Page 89 and 90:
See www.icnirp.org See www.swisscom
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Access for all See www.swisscom.ch
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See www.snowfriends.ch Internet for
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Energy-efficient infrastructure tio
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See www.cdproject.net/en-US the pas
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Innovation and development Swisscom
Page 101 and 102:
GRI topics / KPI Objective Status /
Page 103 and 104:
Corporate Governance and Remunerati
Page 105 and 106:
See www.swisscom.ch/basicprinciples
Page 107 and 108:
2 Capital structure 2.1 Capital At
Page 109 and 110:
3 Board of Directors 3.1 Members of
Page 111 and 112:
Hugo Gerber Michel Gobet Thorsten G
Page 113 and 114:
Felix Rosenberg Richard Roy Othmar
Page 115 and 116:
See report Page 128 3.6 Committees
Page 117 and 118:
See report Page 69 3.9 Controlling
Page 119 and 120:
4 Group Executive Board 4.1 Members
Page 121 and 122:
Kathrin Amacker-Amann Eros Fregonas
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Urs Schaeppi Urs Schaeppi Swiss cit
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6.2 Statutory quorum requirements T
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8.4 Supplementary fees The suppleme
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Remuneration report See report Page
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Remuneration paid to the Board of D
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sizes domiciled in Switzerland and
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Clause on change of control The emp
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Financial Statements Swisscom’s b
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Consolidated income statement In CH
Page 141 and 142:
Consolidated statement of cash flow
Page 143 and 144:
Notes to the consolidated financial
Page 145 and 146:
The exchange rates of significance
Page 147 and 148:
3.8 Business combinations and goodw
Page 149 and 150:
on sale-and-leaseback transactions
Page 151 and 152:
of radio services, multi-platform s
Page 153 and 154:
3.23 Income taxes Income taxes incl
Page 155 and 156:
In CHF million Reported Adjustments
Page 157 and 158:
Provisions for interconnection and
Page 159 and 160:
The main reasons for the recognitio
Page 161 and 162:
6 Segment information Operating seg
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Other Group Swisscom operating Head
Page 165 and 166:
7 Net revenue In CHF million 2010 2
Page 167 and 168:
Fastweb Employees of the Italian su
Page 169 and 170:
The analysis of the comPlan’s pen
Page 171 and 172:
12 Other operating expense In CHF m
Page 173 and 174:
15 Income taxes In CHF million 2010
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Balance Recognised Change in Foreig
Page 177 and 178:
Analysis of maturity and allowances
Page 179 and 180:
acquisitions. Other derivative fina
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Land, Advances made buildings and a
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As of 31 December 2010, other intan
Page 185 and 186:
The following table provides select
Page 187 and 188:
Private placements Carrying amount
Page 189 and 190:
The future payments of the liabilit
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Since 2000, several telecommunicati
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in the Federal Administrative Court
Page 195 and 196:
Other reserves Cumulative foreign c
Page 197 and 198:
The following currency risks and he
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tional Swaps and Derivatives Associ
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Asset/liability categories and fair
Page 203 and 204:
Asset/liability categories and resu
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In 2009, Swisscom terminated intere
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The value-added tax receivables are
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Key management compensation In CHF
Page 211 and 212:
41 List of Group companies Register
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Registered Registered Shareholding
Page 215 and 216:
Report on Other Legal Requirements
Page 217 and 218:
Balance sheet In CHF million Note 3
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6 Treasury shares Swisscom Ltd reco
Page 221 and 222:
Base emoluments and functional allo
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influence. Parents, siblings and ch
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Report of the statutory auditor Rep
Page 227 and 228:
Further Information Discovering new
Page 229 and 230:
Glossary Technical terms ADSL (Asym
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LAN (Local Area Network) A LAN is a
Page 233 and 234:
Networks Access network Swisscom’
Page 235 and 236:
Financial terms Average minutes per
Page 237 and 238:
Other terms Bit-stream access (BSA)
Page 239:
Index of keywords Board of Director
Page 242:
Publishing details Key dates > 17 F
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