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Swisscom AG - Stock Quote SCMN

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Morningstar's Swisscom AG Stock Analysis

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Currency in CHF
Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Economic Moat

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Fastweb Compensates for Declines in Swisscom's Domestic Market in 2021

Javier Correonero Equity Analyst

Business Strategy and Outlook

| Javier Correonero |

Swisscom has a strong market position as the incumbent in wealthy Switzerland with a benign regulator. While it has a high-quality network and a product portfolio tilted toward premium offerings, we see few opportunities for growth in the domestic market, which generates almost 80% of earnings. The main Swiss market segments in which the firm operates have almost reached saturation. As a result, the firm’s strategy is to maintain its leading position by ongoing investments in fiber and ultrabroadband, grow cloud and IT security services, and optimize its cost base. This is a reasonable strategy, in our view. Swisscom's business-to-business solutions are one of the few areas that can generate new growth, but the firm has been historically slow to capture the local cloud, Internet of Things, and security services market growth. Additionally, these high-growth ICT services are a small part of the firm’s overall offering. In our view, average revenue per user is likely to remain under pressure, caused by price discounts mainly in convergent offerings.

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Swisscom AG's Company Profile

Business Description

Swisscom AG is the incumbent telephone operator in Switzerland. It dominates both the broadband and wireless market segments, with a 58% wireless postpaid share and 53% fixed broadband share, a level that dwarfs other developed countries' incumbent operators. Swisscom has also 37% market share in pay television. The firm owns Fastweb, an alternative telecom operator in Italy, offering fixed-line telephone, broadband, and wireless services. It holds a 16% market share in fixed broadband and 2% mobile market share.

Contact
Alte Tiefenaustrasse 6, Worblaufen, Ittigen
Bern, CH-3050, Switzerland
T +41 582219911
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 19,009