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2 Segment information

Changes in segment reporting

Swisscom has simplified its internal settlement as of 1 January 2022. The costs for roaming traffic and for termination on networks of other telecommunications providers are no longer charged to the Residential Customers and Business Customers segments, but remain in the Wholesale segment. In turn, proceeds from termination on Swisscom’s network are no longer credited to the Residential Customers and Business Customers segments, but likewise remain in the Wholesale segment. In addition, Swisscom has reassigned various areas within Swisscom Switzerland among the segments as of 1 January 2022. The prior year’s figures were restated as follows:

In CHF million   Reported   Adjustment   Restated
             
Net revenue 2021 financial year
Residential Customers   4,592   (47)   4,545
Business Customers   3,058   (27)   3,031
Wholesale   971   (317)   654
Infrastructure & Support Functions   76     76
Elimination   (464)   391   (73)
Swisscom Switzerland   8,233     8,233
Fastweb   2,583     2,583
Other Operating Segments   1,033     1,033
Elimination   (666)     (666)
Total net revenue   11,183     11,183
             
Segment result 2021 financial year
Residential Customers   2,676   145   2,821
Business Customers   1,189   88   1,277
Wholesale   524   (227)   297
Infrastructure & Support Functions   (2,644)   (6)   (2,650)
Elimination   1     1
Swisscom Switzerland   1,746     1,746
Fastweb   197     197
Other Operating Segments   99     99
Elimination   (20)     (20)
Total segment result   2,022     2,022

General information

WSGE_DP_GR_Swisscom_Segmente

Reporting is divided into the segments ‘Residential Customers’, ‘Business Customers’, ‘Wholesale’, and ‘Infra­structure & Support Functions’, which are grouped under Swisscom Switzerland, as well as ‘Fastweb’ and ‘Other Operating Segments’.

The Infrastructure & Support Functions segment does not charge any network costs or management fees for its services to other segments. Any other services between the segments are charged at market prices. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.

Segment expense encompasses the direct and indirect costs, which include personnel expense, other operating costs less capitalised costs of self-constructed assets and other income. Pension cost includes ordinary employer contributions. The difference between the ordinary employer contributions and the pension cost as provided for under IAS 19 is reported in the column ‘Eliminations’. In the first three months of 2022, expenses of CHF 15 million were disclosed under ‘Eliminations’ as a pension cost reconciliation item in accordance with IAS 19 (prior year: CHF 13 million).

Leases between the segments are not recognised in the balance sheet in accordance with IFRS 16. The reported lease expense of the segments comprises depreciation and interest on right-of-use assets excluding depreciation on indefeasible rights of use (IRU) of CHF 5 million (prior year: CHF 6 million) as well as the accounting for the rental of buildings between segments. The lease expense of assets of low value is presented as direct costs.

Capital expenditure consists of the purchase of property, plant and equipment and intangible assets and payments for indefeasible rights of use (IRU). In general, IRUs are paid in full at the beginning of the use and are classified as leases under IFRS 16. From an economic point of view, IRU payments will be considered as capital expenditure in the segment information. Capital expenditure in the first three months of 2022 includes IRU payments of CHF 3 million (prior year: CHF 5 million).

Swisscom Switzerland sells some mobile handsets on a subsidised basis in a bundled offering with a mobile communications contract. As a result of the reallocation of revenue over the pre-delivered components (mobile handset), revenue is recognised earlier than the date of invoicing. This results in contract assets deriving from this business being recognised. In the segment reporting of Swisscom Switzerland, the recognition and dissolution of these contract assets is reported as other revenue. The amounts invoiced are reported under revenue from telecommunications services or merchandise.

Segment information 2022


1.01.–31.03.2022, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
 
Residential customers   1,127   295       1,422  
Business customers   779   255   100     1,134  
Wholesale customers   149   63       212  
Net revenue from external customers   2,055   613   100     2,768  
Net revenue from other segments   15   2   141   (158)    
Net revenue   2,070   615   241   (158)   2,768  
Direct costs   (434)   (210)   (15)   16   (643)  
Indirect costs   (706)   (214)   (184)   116   (988)  
Segment result before depreciation and amortisation   930   191   42   (26)   1,137  
Lease expense   (56)   (14)   (3)   1   (72)  
Depreciation and amortisation   (368)   (152)   (11)   4   (527)  
Segment result   506   25   28   (21)   538  
Interest expense on lease liabilities                   11  
Operating income                   549  
Financial income and financial expense, net                   2  
Result of equity-accounted investees                   (1)  
Income before income taxes                   550  
Income tax expense                   (103)  
Net income                   447  
                       
Segment result before depreciation and amortisation   930   191   42   (26)   1,137  
Lease expense   (56)   (14)   (3)   1   (72)  
Capital expenditure   (364)   (163)   (6)   11   (522)  
Operating free cash flow proxy   510   14   33   (14)   543  

Segment information Swisscom Switzerland 2022


1.01.–31.03.2022, in CHF million
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   505   212         717
Mobile   460   188         648
Telecom services   965   400         1,365
Solutions business     297         297
Merchandise   132   82         214
Wholesale       144       144
Revenue other   30       5     35
Net revenue from external customers   1,127   779   144   5     2,055
Net revenue from other segments   4   12   3   13   (17)   15
Net revenue   1,131   791   147   18   (17)   2,070
Direct costs   (220)   (192)   (62)   (2)   42   (434)
Indirect costs   (166)   (246)   (4)   (265)   (25)   (706)
Segment result before depreciation and amortisation   745   353   81   (249)     930
Lease expense   (10)   (7)     (38)   (1)   (56)
Depreciation and amortisation   (14)   (18)     (336)     (368)
Segment result   721   328   81   (623)     506
                         
Capital expenditure   (5)   (14)     (345)     (364)

Segment information 2021


1.01.–31.03.2021, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 

Elimination
 

Total
 
Residential customers   1,134   312       1,446  
Business customers   759   259   104     1,122  
Wholesale customers   174   61       235  
Net revenue from external customers   2,067   632   104     2,803  
Net revenue from other segments   13   2   136   (151)    
Net revenue   2,080   634   240   (151)   2,803  
Direct costs   (447)   (231)   (18)   16   (680)  
Indirect costs   (717)   (208)   (188)   114   (999)  
Segment result before depreciation and amortisation   916   195   34   (21)   1,124  
Lease expense   (58)   (14)   (3)     (75)  
Depreciation and amortisation   (374)   (161)   (13)   4   (544)  
Segment result   484   20   18   (17)   505  
Interest expense on lease liabilities                   11  
Operating income                   516  
Financial income and financial expense, net                   224  
Result of equity-accounted investees                    
Income before income taxes                   740  
Income tax expense                   (102)  
Net income                   638  
                       
Segment result before depreciation and amortisation   916   195   34   (21)   1,124  
Lease expense   (58)   (14)   (3)     (75)  
Capital expenditure   (371)   (168)   (9)   8   (540)  
Operating free cash flow proxy   487   13   22   (13)   509  

Segment information Swisscom Switzerland 2021


1.01.–31.03.2021, in CHF million, restated
 
Residential
Customers
 
Business
Customers
 

Wholesale
  Infrastructure
& Support
Functions
 

Elimination
  Total
Swisscom
Switzerland
Fixed-line   504   222         726
Mobile   465   199         664
Telecom services   969   421         1,390
Solutions business     273         273
Merchandise   146   65         211
Wholesale       169       169
Revenue other   19       5     24
Net revenue from external customers   1,134   759   169   5     2,067
Net revenue from other segments   3   12   2   14   (18)   13
Net revenue   1,137   771   171   19   (18)   2,080
Direct costs   (238)   (175)   (76)   (2)   44   (447)
Indirect costs   (171)   (236)   (6)   (278)   (26)   (717)
Segment result before depreciation and amortisation   728   360   89   (261)     916
Lease expense   (10)   (8)     (40)     (58)
Depreciation and amortisation   (14)   (17)     (342)   (1)   (374)
Segment result   704   335   89   (643)   (1)   484
                         
Capital expenditure   (3)   (10)     (358)     (371)