Price erosion and currency fluctuations contributed to a 4.3 percent decline in Swisscom’s annual revenues.

The operator unveiled its latest financial results on Wednesday, which showed 2011 group revenues fell to €9.5 billion.

Net income was down 61.2 percent to €575 million, but this was mainly attributable to the previously announced €973 million hit the company took from its poorly performing Italian broadband subsidiary Fastweb.

Overall, EBITDA fell 0.3 percent to €3.8 billion.

Swisscom said bundling, flat-rate tariffs and a decline in mobile termination and data roaming rates cost it €414 million.

Currency effects worth €207 million – principally due to the average CHF/EUR exchange rate falling 10.1 percent below 2010 levels – were also to blame, the company added.

In its core Switzerland operating unit, which accounts for nearly three quarters of group revenues, sales declined 1.2 percent.

On the retail side, the number of mobile customers in Switzerland increased 3.8 percent y-o-y to six million.

This led to mobile data traffic doubling during the year and sales of mobile handsets rising 5.7 percent to 1.5 million.

However, the average price per megabyte fell by 40 percent and mobile customers’ ARPU fell by 4.1 percent to €39/month.

The number of Swisscom TV customers rose by 44.4 percent y-o-y to 608,000, while the number of broadband access lines with end customers grew 4.9 percent to 1.66 million.

Enterprise revenues remained flat, but wholesale revenues were hard hit – sales there fell 20 percent.

Against this backdrop, capex rose 10.1 percent y-o-y to €1.7 billion; Swisscom said it had invested heavily in expanding the broadband networks across the country.

“Consumers in Switzerland are very quality conscious,” the company said in a statement. “With high capital expenditure, Swisscom aims to consolidate both its leading position in network and service quality and its market position.”

In common with other operators, Swisscom is treading water at the present time. With traditional telephony revenues declining, the company is working hard to derive revenue from its mobile data, broadband and TV services.

As Point-Topic CEO Oliver Johnson told European Communications on Tuesday, patience is required before significant differences will be made to the bottom line.

On the plus side, Swisscom is investing heavily to ensure it offers a best-in-class service for the future. It says it is projected to spend a further €1.8 billion this year and is committed to similarly high investment levels in “the following years”.

It said its medium-term goal is to connect 30 percent of Swiss households and businesses directly with fibre-optic cables.

On the down side, the company is really betting the house on its home market. Although Switzerland is one of the wealthiest European nations and not part of the euro, Swisscom’s geographical mix does not provide huge optimism long term.

The Fastweb problem shows how going abroad can go wrong, but Swisscom may need to think about partnerships or acquisitions further afield in order to benefit from growth markets.

As 2011 has shown, the company has been dramatically affected by macroeconomic factors at home – something that looks set to continue for a while yet.