Swisscom increases cost reduction target after flatlining in 2017

Swisscom has earmarked more job cuts after full-year sales and profits showed no improvement from 2016.

The operator had being looking to reduce costs by CHF60 million per year between 2016 and 2020, but this has now been raised to CHF100 million per year.

It cited “persistent market pressure in its core business” for upping the target, which it said would be achieved by “simplifying workflows” and job cuts.

In 2017, the company cut 621 jobs, reducing the number of full-time employees down to 20,506.

Despite this, EBITDA remained flat at CHF4.29 billion as sales of CHF11.6 billion were the same as 2016.

Net income fell 2.2 percent to CHF1.57 billion.

The operator saw revenues in Switzerland decrease 2.1 percent to CHF9.06 billion as it registered declines across its residential, enterprise and wholesale customer base.

Swisscom cited fierce competition, lower roaming revenues and a 13.5 percent fall in the number of fixed telephony lines for the downward trend.

The performance in its home market was offset by Fastweb, Swisscom’s Italian opco, which saw revenues rise 10.6 percent to CHF2.16 billion.

The addition of 389,000 mobile subscribers and 96,000 broadband customers accounted for the rise, along with an upturn in wholesale revenues.

Swisscom CEO Urs Schaeppi said: “Despite fierce competition, we managed to assert ourselves well on the market and we achieved the targets set.

“The pressure on the market will continue to increase in 2018.

“We will need to continue to cut costs due to a slight decline in our Swiss core business.

“And it will become all the more important to further develop the current regulatory framework with sound judgement.

“This is the only way that Swisscom and Switzerland will be able to carry on playing at the top level.”

Read more: Swisscom CTO goes on offensive about "strict" Swiss regulation hindering 5G

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