Customer satisfaction ratings at Swisscom Mobile and customers' readiness to recommend the company to other consumers reached a new high at the end of 2006. This was attributable in part to the market acceptance of NATEL® liberty and the rollout of Euro Passport. The associated price reductions, however, caused earnings to drop slightly. Revenues and EBITDA generated by the company's 2,460 employees amounted to over CHF 4 billion and around CHF 1.8 billion respectively. Despite these lower figures, 2006 was a successful year overall: data business developed positively, partially off-setting the decline in earnings, and efficiency gains and cost-savings were achieved.
When it comes to customer loyalty, Swisscom Mobile deserves to be pleased: based on opinion poll results, customer satisfaction at the end of December 2006 scored 8.4 points, customer service 8.0 points. Both ratings put Swisscom Mobile at the top of the rankings in the Swiss mobile market and are a clear indication that more and more customers are recommending Swisscom Mobile to other consumers, while fewer are contemplating switching providers. Swisscom Mobile clocked up a further success following the results of the first customer benchmarking study to be carried out in Switzerland by the company Kundenmonitor Schweiz AG. Again Swisscom Mobile came out with flying colors as the top-ranked mobile provider. This good news was also reflected in customer numbers which, despite a near saturated market, grew by 8.2 percent in 2006 to 4.6 million confirming Swisscom Mobile once more as the undisputed market leader.
Operating income
The excellent customer satisfaction ratings and growth in customer numbers failed to prevent a drop in operating income. This was attributable to three factors: last year saw the first full-year impact of the reduction in termination charges. Secondly, the launch of NATEL® liberty, a new tariff family aimed at boosting customer loyalty, had a negative influence on prices as increased use of the product's hourly tariffs reduced earnings from calls from Swisscom Mobile's own network and to the fixed network. Thirdly, earnings dropped as a result of the launch of Euro Passport, an offering designed to optimize the cost of calls outside Switzerland. The price-driven fall in revenue to CHF 4 billion represents a year-over-year minus of 3.5 percent. Substantial cost-savings helped to lessen the impact of these factors on the operating result, which fell by 3.3 percent to CHF 1.8 billion.
Data business
Data business, which covers data traffic, proprietary information content and MMS messaging, posted positive performance. Our customers are generating ever-increasing volumes of download, browsing and streaming traffic, driving revenue in this area up by 10.4 percent year-over-year to CHF 667 million thanks to the growing popularity of data services such as SF Tagesschau 100 Sekunden (100-second news broadcast), Vodafone live!, MMS, Mobile Unlimited and OGO. New tariffs - including new roaming tariffs - also helped improve the attraction of data services. In the business customer segment, Swisscom Mobile secured a large number of future-oriented data projects, including one from the brewers Feldschlösschen. An important step towards expansion of the data business was made with the acquisition of Swapcom SA and Minick Holding AG.
Multimedia
At the end of 2006 more than one million Swisscom Mobile customers were registered on the Vodafone live! portal. Over 50 percent of mobile handsets sold are broadband-enabled (UMTS / EDGE and now also HSPDA). This factor has an impact on usage behavior as more and more customers with broadband handsets access multimedia offerings. One of the most popular applications in 2006 was mobile TV, where Swisscom Mobile has established an important foothold in the multimedia market with its successful 100-second news broadcast (SF Tagesschau 100 Sekunden / TSR Le Journal 100 secondes) and live sports broadcasts (2006 Football World Cup, Swiss National Ice Hockey League A, Axpo Super League Football).
Network expansion: HSDPA added to the broadband network
Growth in data service usage has only been made possible thanks to ongoing efforts to expand and upgrade the network. Again Swisscom Mobile set the pace, launching HSDPA in March 2006 to become the first provider in Switzerland to commission a mobile broadband network. Today, HSDPA is already five times faster than UMTS and, with speeds of up to 1.8 Mbps, as fast as ADSL. By the end of 2006 Swisscom was already providing HSPDA coverage to 40 percent of the population; this has since risen to over 90 percent, on a par with UMTS. Swisscom Mobile's technology mix - GPRS, EDGE, UMTS, HSDPA and WLAN - is unique in Switzerland and leads the way in Europe.
Mobile Unlimited is the ideal product for mobile broadband communication since it enables seamless handover between different networks and automatically selects the fastest available technology. Members of the product family include Unlimited PC Card 5in1 (GPRS, EGDE, UMTS, HSDPA, WLAN), Unlimited PC Card 4in1 (GPRS, EGDE, UMTS, WLAN) and Unlimited Notebooks. The latter are manufactured by Acer, Fujitsu Siemens and Lenovo, feature the same technologies as Unlimited PC Card 5in1 and are equiped with a Swisscom Mobile SIM card.
Electromagnetic radiation - another chapter completed
Sections of the population continued to harbor concerns about the health aspects of mobile communications in 2006. The eagerly awaited Swiss TNO follow-up study conducted by a Swiss research consortium from the Universities of Berne and Zurich failed to establish any adverse effects of mobile communications on health, thus negating the Dutch TNO study carried out a year earlier. This does not mean to say the controversy surrounding mobile communications, the environment and health is over. Critics cite the unknown consequences of long-term use and are awaiting the results of various studies being carried out as part of a national research program (NFP57) run by the Swiss National Science Foundation and due to be completed in 2010.
Swisscom once more did everything in its power to ensure compliance with the ONIR emission rates set by the Federal Government and the building permit regulations. To this end, it launched a quality system to monitor electromagnetic emissions from mobile phone masts. The system was certified to the highest level at the end of November 2006 by SGS (Société Générale de Surveillance SA) in accordance with ISO 15504, making Swisscom Mobile the first telecoms company worldwide to be certified in compliance with the strict criteria of this new standard.
Outlook
Swisscom's medium-term goal is to become customer service champion across the entire product and service portfolio. It will also be looking to capture growth potential outside its core business. Swisscom Mobile also aims to help offset declining revenues in the core business. Key to achieving these goals will be the creation of a culture in which innovation is actively fostered and practised. Products to look out for are so-called convergent offerings that combine services from fixed and mobile communications.
To keep pace with market developments, Swisscom Mobile must continue to optimize its cost structure while further improving efficiency. This is expected to result in the shedding of a number of jobs in 2007, most of these through natural wastage. 2007 will also see the transfer of the 600 or so Swisscom Shop employees from Swisscom Fixnet to Swisscom Mobile, while Swisscom Solutions will take over responsibility for business customers.