Swisscom

Swisscom AG is a major telecommunications provider in Switzerland.[3] Its headquarters are located in Worblaufen near Bern.[4] The Swiss government owns 51.0 percent of Swisscom AG.[5] According to its own published data, Swisscom holds a market share of 60% for mobile, 67% for broadband and 33% for TV telecommunication in Switzerland. Its Italian subsidiary Fastweb is attributed 16% of private clients and 29% of corporate clients share of Italian broadband and is also active in the mobile market.[6]

Swisscom AG
Aktiengesellschaft
Traded asSIX: SCMN
ISINCH0008742519 
Industrytelecommunications industry, mobile phone industry, internet industry 
Founded1998 
Headquarters
Switzerland
RevenueCHF 11.453 billion (2019)[1]
CHF 1.910 billion (2019)
CHF 1.669 billion (2019)
Total assetsCHF 24.247 billion (2019)
Total equityCHF 8.875 billion (2019)
OwnerSwiss Government (51%), Various (49%)
Number of employees
19,317 (FTE, end 2019)
Websitehttp://www.swisscom.ch
Primary ASN3303
Traffic Levels1Tbps+[2]

The Swiss telegraph network was first set up in 1852, followed by telephones in 1877. The two networks were combined with the postal service in 1920 to form the PTT (Postal Telegraph and Telephone). It struggled to develop a homegrown digital network, with the first digital exchange launched in 1986, but pioneered the NATEL A mobile service in 1978 and the GSM-based NATEL D offering a digital service in 1993. The Swiss telecommunications market was deregulated in 1997. Telecom PTT was spun off and rebranded Swisscom ahead of a partial privatisation in 1997, which has left the Swiss government with a 51% stake. Besides pioneering the first mobile telephone network NATEL A, the present-day Swisscom owns the protected brand NATEL, which is used and known only in Switzerland.[7]

In 2001, 25% of Swisscom Mobile was sold to Vodafone. Since then, Swisscom has bought a majority stake in Italy's second-biggest telecom company Fastweb and invested in areas such as hospitality support, cloud services and billing. New services in the areas of digitisation and IT services are intended to compensate for the risk of revenue losses from the traditional core business.

History

Pioneers (1852–1911)

Switzerland's entry into the telecommunications era came in 1851, with the passage of legislation giving the Swiss government control over the development of a telegraph network throughout the country. The government's initial plans called for the creation of three primary telegraph lines, as well as a number of secondary networks. In order to build equipment for the system, the government established the Atelier Fédéral de Construction des Télégraphes (Federal Workshop for the Construction of Telegraphs).

In July 1852, the first leg of the country's telegraph system—between St. Gallen and Zurich—was operational. By the end of that year, most of the country's main cities had been connected to the telegraph system. In 1855, the network was extended with the first underwater cable, connecting Winkel-Stansstad and Bauen-Flüelen. Night service was also launched that year, starting in Basel, St. Gallen and Bellinzona.

Telegraph traffic took off in the late 1860s after the government had reduced the cost of 20-word messages in 1867. While telegraph traffic continued to rise in the following decade, the technology was soon to be replaced by the telephone.

Switzerland's entry into the telephone age came in 1877, when the first experimental phone lines appeared, starting with a line linking the post office building with the Federal Palace and then with a link, using the existing telegraph line, between Bern and Thun. The following year, the government passed legislation establishing a monopoly on the country's telephone network. Nonetheless, private operators were allowed to bid for licenses in order to develop their local concessions. By 1880, Switzerland's first private network had been created in Zurich. This was a central system with the capacity for 200 lines. The first directory was also published that year and listed 140 subscribers.

Basel, Bern and Geneva all launched their own local networks between 1881 and 1882. One year later, the first intercity telephone line was established, linking Zurich's private exchange with Winterthur's public system. Yet the Zurich company ran into difficulties by the mid-1880s. With its development falling behind the telephone concessions elsewhere in the country, the federal government bought out the private operator, paying just over CHF 300,000 in 1886.

The national telephone network continued to expand. Telephone numbers were introduced in 1890, replacing the initial system whereby callers had been able to ask for their party by name. The number of Switzerland's telephone subscribers steadily grew, particularly after the inauguration of a new telephone switchboard capable of handling nearly 4,000 lines.

By 1896, Switzerland's telephone network had been extended to include all of Switzerland's cantons. By 1900, the country had also established its first international connection, between Basel and Stuttgart, Germany. Switzerland began testing its first public phone booths in 1904. Initially restricted to local calls, the public telephones allowed national calling for the first time in 1907.[8][9]

Telephony takes off (1912–1965)

The first automatic telephone exchanges were installed by private networks in 1912. By 1917, a semi-automatic exchange had been installed in Zurich-Hottingen. The following year, in order to extend the country's phone system into rural parts of Switzerland, the government began promoting the establishment of party-line systems.

In 1920, the Swiss government created the Swiss PTT, combining the country's postal services and telegraph and telephone systems into a single, government-controlled entity. Development of the country's telephone system now came entirely under the purview of the government. In 1921, the PTT launched its own directory enquiries service. The following year, the PTT started the first fully automatic public telephone exchange in Zurich-Hottingen.[10]

The PTT began telex services in 1934, and by 1936 had linked up the cities of Zurich, Basel and Bern, which were then linked via Zurich to the international market. In the meantime, the PTT also became responsible for developing the company's radio broadcasting as well as television broadcasting services.

Switzerland's telephone system took off in the years following World War II. By 1948, the country boasted 500,000 telephone subscribers. Over the following decade, that number doubled. In 1957, the PTT added computer capacity in order to handle billing for its fast-growing network. Through this period, the state-owned organization had continued to invest in automating its telephone network, and in 1959, Switzerland became the first country to feature a fully automated telephone exchange system.[8][9]

Space-age communications (1966–1981)
The original Telstar, the first telecommunications satellite to be launched into space.

Telstar – the first telecommunications satellite – was launched into space in 1962.[11] At Expo 1964 in Lausanne, the first exchange to permit international direct dialing was unveiled. In 1974, the Leuk satellite earth station went into operation in the canton of Wallis.

Moving towards mobile in the 1980s

Automation enabled the PTT to introduce pulse-metering for local calls in 1963, priced at 10 centimes per pulse. In 1966, the PTT introduced automated international dialing services, initially from Montreux. International direct dialing was rolled out to the rest of the country over the following decade, achieving full coverage in 1982.

As the PTT's subscriber base topped two million at the beginning of the 1970s, the country introduced a new, seven-digit phone numbering system. By then, the PTT was also becoming interested in a number of new technologies. In 1970, the PTT led a work group, including a number of prominent Swiss telecommunications players, in an effort to create an integrated digital telecommunications network (IFS). Originally intended to be rolled out by the middle of that decade, the first IFS exchange did not become operational until 1986.

Other technologies proved more accessible to the PTT. In 1976, the company launched facsimile transmission services from its customer service centers. Two years later, the PTT established its first mobile telephone network, called NATEL (for Nationales Autotelefonnetz). Although rudimentary—with calls limited to just three minutes, coverage restricted to five minutes, unlinked local networks, and often difficult-to-establish connections—the NATEL network marked one of the earliest and most successful attempts at making telephony mobile.

In 1980, the PTT enabled facsimile transmission for the home and office market. By then, its subscriber base had risen to nearly three million fixed-line users. In 1983, the PTT launched its next-generation mobile network, NATEL B, which, among other enhancements, reduced the size of mobile telephone equipment to a 25-pound unit that fit in its own carrying case. In 1985, the first fibre-optic cable was laid between Bern and Neuchâtel.

Other new technologies appeared in the mid-1980s, including the Telepac data transmission network, rolled out in 1983, and the first videoconferencing services, launched in 1985. In 1987, the PTT upgraded the NATEL network again. The new NATEL C network provided more extensive coverage, digitally transmitted sound, and smaller telephone sizes. The new network permitted mobile telephony to take off in Switzerland, and by 1992 the country had some 200,000 subscribers on the NATEL network.

In the 1990s, the PTT faced the loss of its telecommunications monopoly. As a run-up to the coming deregulation of the telecommunications market, the PTT put into place a new corporate strategy, separating its postal and telecommunications operations into two focused units. The telecommunications business became known as Swiss Telecom PTT. New telecommunications legislation was passed in 1992 that stripped away the government's monopoly status, starting with the equipment sector and digital data communications services, although maintaining the company's de facto hold on the local telephone market for most of the remainder of the decade.

As part of its repositioning, Telecom PTT invested more heavily in the mobile telephony business, launching the new GSM-based NATEL D network in 1992. That network, which also provided customers with compatibility throughout most of Europe, marked the start of a new era for the telephone market as callers adopted the new technology. By then end of the 1990s, nearly two million customers had connected to the NATEL D network.[8][9]

Public company in the 21st Century

As one of the smallest European telecommunications companies, Telecom PTT's aspirations to achieve international growth took a cumbersome path. At the very beginning, the company formed a Unisource partnership with the Netherlands' KPN and Sweden's Telia. Although the Unisource partnership attempted to enter a number of markets around the world, including Malaysia and India, it finally collapsed after several years of losses.

Telecom PTT's subsequent entry into the Internet proved to be more successful, as the company set up the service provider Blue Window (later Bluewin), which became the country's leading Internet service provider (ISP). In addition, the company had also introduced digital ISDN subscriber services, increasing its subscriber base from 250,000 in 1996 to more than two million by 2003.

In 1997, Swiss government passed new legislation fully deregulating the Swiss telecommunications market. As part of that process, Telecom PTT was transformed into a special public limited company, its name was changed to Swisscom on 1 October 1997, its shares were listed on the Swiss Stock Exchange, and it conducted a public offering of its shares in 1998. However, Swiss government remained a major shareholder of the company.

In 1998, for the first time in its home market, Swisscom faced competition. Diax (which later changed its name to Sunrise) entered the Swiss mobile telephone market as a new player. Two years later, in 2000, the situation in this market segment was further intensified by the arrival of France Telecom-dominated Orange. Nonetheless, Swisscom held onto its leading position among mobile users.

Simultaneously to the developments in the domestic market, Swisscom also implemented its expansion strategy regarding international markets. In 1999, the company acquired Germany's publicly listed Debitel, then the third-largest mobile services provider on the German market, which also operated in France, the Netherlands, Slovenia and Denmark. Debitel quickly became the leading network-independent provider for mobile services in Europe. At that time, Debitel's customers base exceeded ten million subscribers. Swisscom rapidly built up its holding in Debitel to 93% in 2003.

In advance of planned public offerings of both Bluewin and Swisscom Mobile, Swisscom restructured its own operations. The company formed six primary business units, and in 2001, it sold a 25% stake in Swisscom Mobile to England's Vodafone. At that time, Vodafone was a major investor in so-called 3G (third-generation) mobile telephone technology.

In 2000, Swisscom won a UMTS (Universal Mobile Telecommunications Systems) license. While others, including Vodafone, paid billions for their UMTS licenses, Swisscom paid just CHF 50 million, which softened the blow on the company when the bottom dropped out of the UMTS market soon after.

In the early 2000s, Swisscom also began rolling out new DSL (digital subscriber line) broadband technology. Its customer base revealed a rapid grow, increasing to 200,000 subscribers by the beginning of 2003. Compared to its European competitors whose profit forecasts were hindered by significant indebtedness, the company accumulated between CHF 5 billion and CHF 10 billion for possible acquisitions.

In 2002, Swisscom Eurospot was founded (later Swisscom Hospitality Services (SHS)). The company originally specialised in providing High-Speed Internet Access (HSIA) services to hotel guests in European 4- and 5-star hotels.[12] With the rising complexity of information and communication technology and increasing cost pressures affecting the hotel business, SHS expanded their range of applications including Voice over IP, Hotel TV, High-speed Internet and tablet-based room controls that are offered through a converged hotel network infrastructure.[12]

These funds enabled the company to target the growing wireless "hotspot" market, areas providing wireless network access. In May 2003, its newly formed subsidiary, Swisscom Eurospot, merged with the Netherlands' Aervik, which operated some ten hotspots and had access to another 45 sites. By the end of that month, Swisscom advanced its position on the European WiFi market segment by acquiring England's Megabeam and Germany's WLAN AG. As a result, the company controlled 206 hotspots in Germany and Switzerland as well as the third-largest hotspot network in the United Kingdom.[8][9]

Modern times

The former state-owned PTT (Post, Telegraph, Telephone, founded 1852) was privatized in several stages from 1988 onward and became a public limited company with special legal status in October 1998.[13] The Swiss Confederation currently holds 51.0% of the share capital.[13] The Telecommunications Enterprise Act limits outside participation to 49.9% of the share capital.[14]

In its 5 April 2006 message, the Federal Council proposed to Parliament that Swisscom should be completely privatized and that the Swiss Confederation should sell its shares in stages. On 10 May 2006, the National Council declined to support the proposal. On 20 May 2006, the Advisory Committee of the Council of States advised the Council of States to endorse the proposal – but only so that it could be referred back to the Federal Council for revision.

In the first half of 2007, Swisscom acquired a majority holding in the Italian company Fastweb. During the offer period, which ran from 10 April to 15 May 2007, Swisscom acquired 80.7% of Fastweb's share capital, which, when added to Swisscom's existing stake, meant that Swisscom owned 82.4% of Fastweb shares by the cut-off date of 22 May. The total transaction amounted to EUR 4.2 billion or CHF 6.9 billion.[15] Fastweb is the second largest network in Italy.[16]

Swisscom announced its new visual identity on 14 December 2007.[17] The previous sub-brands of Swisscom Fixnet, Swisscom Mobile and Swisscom Solutions ceased to exist on 1 January 2008.[18] As part of the restructuring, Swisscom redesigned its logo and transformed it into a moving picture element, an innovation for Switzerland and the industry.[19]

In 2008, Swisscom acquired its five millionth NATEL customer, which means that the two thirds of the Swiss population used the Swisscom mobile network[20] and in 2013 Swisscom TV counted a million customers.[7] On 23 July 2013, the CEO of Swisscom, Carsten Schloter was found dead from an apparent suicide and Urs Schaeppi was appointed interim CEO.[21] Since November 2013, Schaeppi has been the CEO of Swisscom.[22] As of June 2018, Swisscom rank on Forbes "The World's Largest Public Companies" list, the Global 2000,[23] at number 561.[24]

In 2012, Swisscom Hospitality Services introduced a Managed Network Services offering specifically for its hotel customers.[25] SHS services are at that time used e.g. by Hyatt, Rezidor, IHG, Marriott, Hilton Worldwide, Accor, Mandarin Oriental,[26] and other large hotel groups across North America, Europe, the Middle East and Asia-Pacific.[27] In June 2015, Swisscom Hospitality Services became part of a new company, Hoist Group, following its acquisition by the Sweden-based HoistLocatel.[28]

In June 2018, Danish software firm Nordija partnered with Swisscom to develop the new TV-as-a-Service platform, TVaaS 2.0.[29][30][31]

On 17 April 2019, Swisscom began to deploy its 5G network.[32] At present, the company delivers 5G service in 110 cities and villages including Zurich, Geneva and Bern as well as rural and touristic regions.[33]

In June 2019, Swisscom, SK Telecom and Elisa together launched the world's first 5G roaming service. From 17 July 2019, Swisscom customers with a 5G mobile phone were given access to the new 5G data network in Finland and by the end of July in South Korea.[32] Swisscom customers database exceeded 6 million mobile subscriptions.[33]

Organisation
Bluewin tower in Zürich

Swisscom AG is the parent company of the Swisscom Group and is responsible for the overall management of the Swisscom Group. The Swisscom business divisions are called Sales & Services, Products & Marketing, Enterprise Customers and IT as well as Network & Infrastructure. The latter builds, operates and maintains Swisscom's nationwide fixed-line and mobile communications infrastructure in Switzerland.[16] The division is also responsible for the corresponding IT platforms and is in charge of migrating the networks to an integrated IT and IP-based platform (All-IP).[16] The Group also includes the Digital Business division and Group companies such as Fastweb S.p.A. in Italy.

Swisscom Telecommunication Centre Herdern in Zürich by architect Theo Hotz

Key numbers

The corporation's key numbers for the year 2018 are as follows: [34]

Category Values 2018
Net revenue 11,714 mio
EBITDA 4213 mio
Net income 1521 mio
Capital expenditure 2404 mio
Dividend per share 22,00 CHF
Revenue generating units (RGU) Switzerland 11,891 thous.
Employees 19,845

Investments

The participation portfolio covers the five business fields of "broadcasting" through Swisscom Broadcast, "network construction and maintenance" through Cablex, "Building management and business travel (incl. vehicle fleet management)" through Swisscom Real Estate Ltd, "Billing and collection" through Billag, Alphapay and Medipa Abrechnungskasse, and "Mobile Solutions" through Minick Holding and Sicap.[35]

Telecommunication Tower in St. Chrischona is the most important in north-west of Switzerland

International Carrier Services

On 26 June 2009, MTN Group and Belgacom, merged their International Carrier Services MTN ICS and Belgacom ICS (BICS). BICS will function as an official international gateway for all international carrier services of Belgacom, Swisscom and MTN Group.[36] These companies respectively hold 57.6%, 22.4% and 20.0% of the company's shares.[36]

Internet of Things (IoT)

In April 2015, the Company started testing a network for the Internet of Things, or Low-Power Wide Area Network (LPWAN), in the regions of Geneva and Zurich.[37] The pilot project serves as an addition to the existing M2M mobile network offers, and it has been estimated that by the year 2023 over 3 billion connections will be running via the IoT.[38]

Board of Directors

Hansueli Loosli, former CEO and Chairman of Coop (Chairman of the Board)[39]
Roland Abt, former CFO of Georg Fischer
Valérie Berset Bircher, Head of Labor Affairs for the Federal Department of Economic Affairs, Education and Research
Alain Carrupt, former Chairman of the Syndicom trade union
Frank Esser, former CEO of SFR
Barbara Frei, Chief of Schneider Electric Germany
Catherine Mühlemann, Partner and Co-founder of Andmann Media
Anna Mossberg, formerly at Deutsche Telekom and Google (Sweden)
Renzo Simoni, board representative for the Swiss government, former CEO of Alp Transit Gotthard AG

Business areas and services

coComment
Main article: coComment

In February 2006, Swisscom launched the Web 2.0 website coComment,[40] which allows users to track any discussion online.[41]

Cloud and data centers

In 2012, Swisscom launched Storebox, its service for cloud storage and alternative to Dropbox for corporate clients wishing to store information in Switzerland. In June 2019, the company announced its plans for the termination of Storebox.[42]

In 2013, Swisscom started to build a cloud service based in and complying to the strict privacy laws of Switzerland. Although the data are to be stored within Switzerland's borders, users have global access and enjoy at the same time protection from intervention of foreign authorities, and less stringent foreign data privacy laws.[43] Although Swisscom's main focus is on Swiss-based clients, especially banking clients, it also targets foreign-based clients who are seeking protection for their data privacy.

For individuals in Switzerland, Swisscom also offers "Docsafe", a cloud storage service targeting at optimum security for documents.[44] The documents can be uploaded and accessed via web or an app and are free-of-charge with unlimited storage space. Swisscom offers a Platform-as-a-Service cloud based on Cloud Foundry known as Swisscom Application Cloud for developers.[45]

New business fields

Swisscom considers infrastructure to form the basis for its products and services.[46] The company's strategy involves developing new business models and further developing its Natel infinity pricing plans, in order to ensure a sustained source of revenue.[46] Therefore, the company decided to develop its national and international offerings based on a high-speed cloud infrastructure.[46] In addition, for the banking, healthcare and energy sectors, Swisscom is developing vertical market services.[46] Recent examples in these fields include the testing of driver-less cars,[47] exploring the opportunities in the healthcare market, striving to innovate intelligent power networks, and forming a partnership with Coop in the area of e-commerce.[48]

Swisscom StartUp Challenge

The Swisscom StartUp Challenge has been held for five successive years. The program provides ten selected tech startups (five early stage and five late stage) the opportunity to join a tailor-made week-long business acceleration program in Silicon Valley where they develop their ideas and meet with industry experts, investors and potential customers. From all submissions, ten finalists are selected and invited to pitch in front of a jury. The jury provides feedback and names the five winners. The Challenge is organized in collaboration with VentureLab.[49]

In 2016, over 200 startups participated in the challenge. The winners were Advanon, Flashwell, Nanolive, Qumram and Xsensio.[50]

Corporate Responsibility

Complying with the recommendations of the Swiss Code of Best Practice for Corporate Governance 2014 issued by economiesuisse and meeting the requirements of the Ordinance Against Excessive Compensation in Listed Stock Companies, Swisscom opted for practicing effective and transparent corporate governance.[51] At present, Swisscom's corporate responsibility strategy involves fostering long-standing partnerships in the areas of climate and environmental protection, sustainable living and working, social responsibility and media expertise.[52] Swisscom was ranked 20th in the recent list of the Global 100 Most Sustainable Corporations in the World in 2015.[53]

Competition

On the market segment for mobile telecommunication services, the main competitors for Swisscom are Salt and Sunrise Communications AG. For the 6th consecutive year, "Connect" magazine named Swisscom the winner of its yearly network test by comparing telephone and data services of the three largest providers in 2015.[54]

Connect network test

In the network test, conducted in the germanophone region of Germany, Austria and Switzerland, by Connect magazine, Swisscom secured a second position in the category "phone network", with Sunrise being able to closely lead in this category mainly benefiting from Swisscom's slower connection time for telephone calls.[54]

In the category "data network", the success rates for the connection to the internet for all three main networks are close to 100% with Swisscom providing the fastest download and upload data rate, even in less urban areas.[54]

Based on overall results of 2016, "Connect" magazine awarded Swisscom the prize of "Best Network". However, the gap between Swisscom and the two other companies has shrunk significantly as compared to e.g. 2012. The test also revealed significant improvements in services for all companies involved.[55]

Criticism

In a survey[56] conducted by the Swiss newspaper Tagesanzeiger, some consumers criticized Swisscom's international roaming rates and its subscription rates for mobile phones. The main concern of the consumers in the survey was that they found the rates to be too high.

gollark: Also, `brb` would be a lie.
gollark: Amazingly, people go AFK!
gollark: The current production skynet server isn't very spaghetti, but the attempts I've made to make P2P versions kind of are.
gollark: *cough* really should work on the skynet rewrite *cough*
gollark: *cough* why *cough*

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