Swisscom’s operating results were within expectations in the first nine months of 2019. Revenue fell by 2.7% or CHF 233 million to CHF 8,456 million; at constant exchange rates, revenue declined by 1.9%. The year-on-year comparison of operating income before depreciation and amortisation (EBITDA) is affected by the application of new requirements for the recognition of leases (IFRS 16). At CHF 3,360 million, reported EBITDA was up by 4.0% or CHF 129 million, and unchanged from the previous year on a comparable basis. Net income decreased by 2.6% or CHF 32 million to CHF 1,181 million. The financial outlook for the 2019 financial year remains unchanged.
In the Swiss core business, revenue fell by CHF 216 million or 3.3% to CHF 6,367 million as a result of ongoing price pressure and the decline in the number of connections in fixed-line telephony. In contrast, revenue at Fastweb increased in local currency by EUR 68 million or 4.5% to EUR 1,584 million, driven by revenue growth in business with residential and business customers. The number of customers with Fastweb increased year-on-year by 3.7% to 2.6 million in the broadband business and by 31.6% to 1.7 million in mobile telephony. In the Swiss core business, EBITDA declined by 1.5% to CHF 2,745 million. This decline as a result of lower revenue was largely offset by the ongoing cost-cutting measures. At Fastweb, EBITDA rose in local currency by 6.7% to EUR 529 million as a result of the growth in revenue.
Swisscom’s capital expenditure increased by 13.1% or CHF 212 million to CHF 1,833 million. This figure includes CHF 196 million paid for mobile radio frequencies which Swisscom acquired at auction in Switzerland. The frequencies were allocated in April 2019 and will remain with Swisscom until 2034. Due to the expenses for the mobile frequencies acquired and higher investments in the expansion of broadband networks, capital expenditure rose in Switzerland by 19.6% to CHF 1,338 million. Capital expenditure at Fastweb was stable at the high prior-year level of EUR 443 million.
Operating free cash flow proxy declined by CHF 289 million to CHF 1,321 million, primarily as a result of the CHF 196 million spent on mobile radio frequencies. Net debt rose by CHF 226 million in the first nine months of 2019 to CHF 8,933 million. The number of employees at Swisscom declined 1.8% year-on-year to 19,500 FTEs. In Switzerland, headcount decreased by 377 FTEs or 2.2% to 16,788 FTEs.
Swisscom continues to expect net revenue of around CHF 11.4 billion, EBITDA of more than CHF 4.3 billion and capital expenditure of around CHF 2.5 billion (including expenditure of CHF 196 million for mobile radio frequencies in Switzerland) for the 2019 financial year. Subject to achieving its targets, Swisscom will propose payment of an unchanged, attractive dividend of CHF 22 per share for the 2019 financial year at the 2020 Annual General Meeting.