Telco posts 1.5% 1H earnings hike thanks largely to increased contribution from Italy’s Fastweb.

Swisscom posted a strong set of numbers for the first half of the year, but admitted that it is still suffering from an ongoing decline in fixed-line telephony usage.

The telco reported a 1.5% increase in EBITDA 2.26 billion francs (€2 billion), while net profit grew by 6.5% to CHF839 million.

The Swiss firm’s EBITDA was boosted by growth at Italian unit Fastweb, which increased its contribution by more than 20% to €403 million, thanks in no small part to a growing customer base in fixed broadband and mobile.

However, group revenue slipped by 1.4% to CHF5.69 billion.

"The decline in the use of fixed-line telephony has not slowed down, which in combination with intensive and heavily promotion-driven competition has resulted in a slight drop in revenue for telecommunication services," said Swisscom CEO Urs Schaeppi.

"Thanks to the initiatives we have set up to lower costs, we have been able to offset a large part of the decrease in revenue and are on course to meet our objectives for full-year 2017 despite price competition and a saturated market," he added.

The telco aims to generate CHF11.6 billion in net revenue for the full year, flat compared with 2016, and sees EBITDA growing slightly to CHF4.3 billion, "due to the compensation from legal proceedings recorded at Fastweb in the second quarter," it said.

It will propose an unchanged dividend of CHF22 per share for the full year at its 2018 AGM.

The telco is cutting costs in order to address its domestic revenue decline and is part-way through a plan to reduce its cost base in Switzerland by more than CHF300 million between 2015 and 2020.

At group level its employee base fell by 1.7% to 20,775 in the first half of the year, while in Switzerland alone the number of full-time employees was reduced by 2.2% between December and June to 17.974.