swisscom - watch

bealtine

Swisscom's net profit grows 44.6% to CHF 1.65 billion


The net revenue of the Swisscom Group during the first nine months fell year-on-year by 3 percent to CHF 7.3 billion. The decline in revenue could not be wholly compensated for by cost savings so that the EBITDA fell by 3.5 percent to CHF 3.27 billion. Thanks to lower depreciation, an improved financial result and elimination of the loss from the discontinued debitel business, net profit after deduction of minority interests rose by 44.6 percent to CHF 1.65 billion. In response to the competitive operating environment, Swisscom aims to bring about further efficiency improvements, meaning around 260 jobs cuts in individual areas; overall, headcount in Switzerland will rise slightly due to the creation of new business areas, among other factors.
Fixnet posted a year-over-year decline of 4.4 percent in revenue from external customers to CHF 3.27 billion. Cost savings failed to compensate for the drop, resulting in a 4.2 percent decrease in EBITDA to CHF 1.59 million. The number of ADSL access lines in Switzerland increased by 40.9 percent to 1.01 million.
Mobile recorded a slight year-on-year drop of 0.1 percent in revenue from external customers to CHF 2.75 billion and a reduction of 3.6 percent in EBITDA to CHF 1.45 billion. The number of mobile customers rose year over year by a net of 229,000, or 5.8 percent, to 4.17 million.
As already announced, Swisscom expects to close 2005 with a drop in revenue to around CHF 9.6 billion and a reduction in EBITDA to approximately CHF 4.1 billion.

Tom Young

Controversially Swisscom might only be interested in eircom with Meteor. Now, will the TCA folks levy similar or more conditions that the NTL, Chorus round? (Hope so).

Also, ESOT or eircom's jabba the hut, is almost amoebic. Could be a problem after round one due diligence.

jwt

http://www.rte.ie/business/2005/1111/presswatch.html

SWISSCOM IN TALKS WITH EIRCOM ESOP - The Irish Times reports that advisers to Swisscom have opened talks with the trust that holds 20.6% of Eircom on behalf of its staff and retirees, quoting sources familiar with the process.

John

Sponge Bob

The notorious ESOP now represents more retired eircom droids than working eircom droids and is a strange anachronism .

You may have noticed that Biddy has been taken off front line support in the past 2 years and replaced with nice but dim types ....frequently nice but dim and with no english and no aptitude for regional Irish dialects either. Biddy has been culled big time God bless her.

The ESOP is still the biggest shareholder so if it wont sell 100% of its stake to the Swiss (and take Swisscom shares in payment @ c €2.40 an eircom share ) the whole deal is off . Hopefully Biddy put the gnashers back in for the gig so as not to frighten the Swiss.

Swisscom cannot really ask for productivity and stuff from the ESOP given that most of their members no longer work in Eircom . Swisscom will also have to buy out Con Scanlon himself at a price agreeable to Con

bealtine

Swisscom starts due diligence at TDC, also eyes KPN
Published: Monday 21 November 2005 | 08:26 AM CET


Swisscom has begun a due diligence process at Danish telecommunications operator TDC, which could lead to a possible takeover, reports Swiss newspaper Sonnstagzeitung. Swisscom is currently in talks to acquire Irish telecommunications operator eircom. Citing a Swisscom insider, the newspaper said that Swisscom had not come very far in examining the books at TDC. Should the exploratory contact at TDC come to nothing, Swisscom aimed to explore a takeover of Dutch telecommunications operatorKPN, which is larger than Swisscom in terms of market value. If Swisscom, which has no outstanding corporate debt, were able to realise all of its takeover plans, it would incur debt of CHF 22 billion. Christian Neuhaus, a spokesman for Swisscom, declined to comment on the report.

machalla

http://www.rte.ie/aertel/p131.htm

EIRCOM SLUMPS AFTER SWISS COMMENTS

---

Shares in Eircom tumbled by more than
15% today after comments from the Swiss
government.

The government said it would block any
major international acquisitions by
Swisscom as long as it remained
majority shareholder.

A finance ministry spokesman said the
risks of a foreign takeover by Swisscom
were too high for the government.

Swisscom is in acquisition talks with
Eircom and is believed to be eyeing
Denmark's TDC.

Sponge Bob

machalla wrote:

A finance ministry spokesman said the
risks of a foreign takeover by Swisscom
were too high for the government.

In English he said.

"The Swiss government does not want Swisscom to pay over the odds for some worthless piece of rusting **** in Ireland and thereby reducing current shareholder value to the Citizens of Switzerland . "

Sponge Bob

El Reg sez the Swiss Government Block will remain in place for 12 months.

http://www.theregister.co.uk/2005/11/25/eircom_swisscom/

The Swiss Government owns 66.1 per cent of the country's leading telco and reckons Swisscom's acquisitive plans are too risky.

"In a statement issued this afternoon Switzerland's leading telco said: "Swisscom Ltd acknowledges that the Federal Council has instructed its representative on the Board of Directors to vote against a possible acquisition that Swisscom might make abroad and, instead, to support the distribution of free capital to shareholders."

The thought that Biddy could end up with 5% of Swisscom (and a Board seat for Con Scanlon ) probably focused a few minds too

eircomtribunal

Sponge Bob wrote:

The thought that Biddy could end up with 5% of Swisscom (and a Board seat for Con Scanlon ) probably focused a few minds too

The thought that the information about "Eircom vs. Ireland" sent to relevant addressees in Switzerland by some watchful private person might have played a part amuses me...
P.

Cryos

eircomtribunal wrote:

The thought that the information about "Eircom vs. Ireland" sent to relevant addressees in Switzerland by some watchful private person might have played a part amuses me...
P.

Ive found it quiet interesting over the past while reading comments from other large telcos about eircom; the swisscom one seems to be icing on the cake tho.

Its obvious that Swisscom's major investors have looked through eircoms books and seen that they cannot make the company profitable which is blatently obvious given swisscoms large profitability this year so these lads know how to run a business.

Reminds me of the whole gateway computers epidemic over here when a few investors looked at the companys european operations and took a firm step back after doing so and said "No thanks" and we all know what that lead to !

Sponge Bob

eircomtribunal wrote:

The thought that the information about "Eircom vs. Ireland" sent to relevant addressees in Switzerland by some watchful private person might have played a part amuses me...

Its Amazing how the Swiss government suddenly stepped in and kyboshed the plan

DonegalMan

machalla wrote:

http://www.rte.ie/aertel/p131.htm

Shares in Eircom tumbled by more than
15% today after comments from the Swiss
government.

God, but my heart bleeds for the current investors

damien

http://www.timesonline.co.uk/article/0,,2091-1892776,00.html

On October 6 the newspaper published a front-page story by Tom McEnaney claiming that Swisscom had made a €3 billion approach. Shares in Eircom, which had been rising steadily, soared from €2.04 to €2.24 on the back of the takeover speculation.

Eircom issued a statement later that day stating it was “not currently in discussions” with Swisscom or any other company in relation to a possible offer.

On the following day the Irish Independent stated “investors interpreted Eircom’s use of the term ‘currently’ as confirmation that an approach had been made”. Two days later The Sunday Times reported that the companies had held informal talks in February, but there had been no contact since.

On October 10 it emerged that an Australian investment company had been building a stake in Eircom, and the takeover speculation ended. The news sent the shares falling to €2.09.

Solair

The more likely issue is Swisscom's very cozy relationship with Vodafone. Their mobile service offers Vodafone Live! etc etc. Now that eircom plc is a mobile player in Ireland Swisscom could face pressure from Vodafone that could leave it in a very odd position... the transaction could need approval from the competition authority etc ..

I'd say Swisscom were hoping to pick up eircom at a low price... the meteor thing complicated matters..

Swisscom Mobile is 25% owned by Vodafone.

At the end of the day, eircom's small and Swisscom obviously has bigger fish to fry. Their relationship with vodafone may be far more valuable to them than picking up the irish incumbant complete with its newly acquired mino mobile division.

---

The other theory is that eircom's failure to get the final 3G licence may have soured the deal if the vodafone relationship didn't play any part in the cooling off.

eircomtribunal

Solair wrote:

The more likely issue is Swisscom's very cozy relationship with Vodafone. Their mobile service offers Vodafone Live! etc etc. Now that eircom plc is a mobile player in Ireland Swisscom could face pressure from Vodafone that could leave it in a very odd position... the transaction could need approval from the competition authority etc ..

I'd say Swisscom were hoping to pick up eircom at a low price... the meteor thing complicated matters..

Swisscom Mobile is 25% owned by Vodafone.

Guess what, Swisscom did not all of a sudden find out that they were owned to 25% by Vodafone. No sudden problem there.

Read the Swiss papers to find the background.

On paper Eircom looks a profit-making company (which it is) for the smart asses in Swisscom, but the political masters (owing over 60% of Swisscom) got more worrying information about this Eircom outfit, beyond the profit figures (what it had done to Ireland, how it had done it, what consequences this had in relation to the political masters opinion, information about damaging internal Eircom network assessments etc.) and they pulled the plug, because such business praxis is not what good Swiss politicians have in mind and is not something they want to risk their telephone company's well-being with.

And this has even more consequences now: One influential political party has decided to ask in a referendum not to go ahead with privatising Swisscom, as has been planned.

P.

JohnC.

Are people giving eircom too much credit for the Swiss government decision? I would have thought eircom would have been less of a consideration than the other 2 companies they were after?

eircomtribunal

Kahless wrote:

Are people giving eircom too much credit for the Swiss government decision? I would have thought eircom would have been less of a consideration than the other 2 companies they were after?

Eircom was the imminent Swisscom decision. The Schweizer Bundesrat slammed the emergency breaks (they don't normally interfere directly into the business affairs of Swisscom, where they are 66% shareholders) as they feared Swisscom might step into a potentially disastrous business venture, where they could loose billions. A sound decision in my opinion.

P.

Solair

eircom tribunal:

Could you please point me to these Swiss government papers? or a Swiss newspaper article that could support your argument with facts.
Links perhaps?

Swisscom has a history of pulling out of such deals at the last min. There was some concern about very early on, and from some of the financial articles I saw, it seems that the Swiss Govt. does indeed have a habit of intefering in commercial operations.

Their concern may be that Swisscom is going to spend a lot of money on acquisitions and not invest at home in Switzerland. The Irish govt. did the exact same thing to the ESB when they were going invest heavily in Poland.

The swiss govt have blocked ALL of Swisscom's "high risk" overseas investment strategies.. not just eircom. i.e. those in demark and the proposed takeover of KPN Netherlands which is actually bigger than Swisscom.

It's reasonable and prudent for the Swiss govt. to prevent Swisscom from taking on high levels of debt that could damage its domestic investment plans or its future as a company.

I don't particularly love eircom, but I don't think it's fair to make statements about any company's accounts without providing some sort of evidence to back those statements up. Otherwise, your comments are your personal opinion.

bk

Just to throw in here that Swisscom's ADSL service certainly isn't anything to write home about (with the exception of the entry level product):

http://de.bluewin.ch/internetzugang/index.php/index_adsl

150k/50k: €5.82
600k/100k: €31.67
1.2m/200k: €44.60
2.4m/200k: €64

Specially compared to the upgrades coming from Eircom and NTL soon.

zuma

bk wrote:

Just to throw in here that Swisscom's ADSL service certainly isn't anything to write home about (with the exception of the entry level product):

http://de.bluewin.ch/internetzugang/index.php/index_adsl

150k/50k: €5.82
600k/100k: €31.67
1.2m/200k: €44.60
2.4m/200k: €64

Specially compared to the upgrades coming from Eircom and NTL soon.

I thought eircom was on the verge of being taken over by a progressive company?

Taking a look at their DSL offering tell a completely different story!!!

Hopefully a nice French company will take over eirscum and give us a proper DSL service!!

Heinrich

bk wrote:

Just to throw in here that Swisscom's ADSL service certainly isn't anything to write home about (with the exception of the entry level product):

http://de.bluewin.ch/internetzugang/index.php/index_adsl

150k/50k: €5.82
600k/100k: €31.67
1.2m/200k: €44.60
2.4m/200k: €64

Specially compared to the upgrades coming from Eircom and NTL soon.

I have used bluewin for about 2 years and Sunrise for 5! Had some problems with Bluewin but went bac as the Freesurf was not much better. The salaries in CH are far superior to here so it is a silly comparison!

eircomtribunal

The Handelsblatt as one example, that the Bundesrat's action was primarily geared at stopping the imminent Eircom take over (but also other possibly risky take-overs):

Man habe Swisscom klar gemacht, dass die Regierung nicht wolle, dass Swisscom bei Eircom involviert werde, liess Merz durch seinen Sprecher Dieter Leutwyler auf Anfragen ausrichten. Und der Vertreter des Bundes im Swisscom-Verwaltungsrat sei dahingehend instruiert worden, sich gegen ein solcher Engagement auszusprechen. Und wenn die Stimme, die 66 Prozent repräsentiere, Nein sage, dann sei ein Projekt eben blockiert, so der Sprecher.

You can also follow the story on the Neue Zürcher Zeitung (www.nzz.ch) etc.

As to your

I don't think it's fair to make statements about any company's accounts without providing some sort of evidence to back those statements up. Otherwise, your comments are your personal opinion.

I can only say:
Eircom looks a profitable company (that is why it seemed so attractive to the Swisscom managers: Cash-rich Swisscom could make savings by reducing the debt and Eircom was 'relatively' small and affordable), and a modestly diligent look into the Eircom prepared books would not have given rise to concern.
I don't think it was unfair to make the potential buyer aware of the wider background (how Eircom has made Ireland the poor man of Europe with regards to Internet; how Eircom has antagonised the government; how Eircom has neglected the physical network; what lies behind the details of various investment reports on the company and behind internal reports of the company; what are the easily overlooked pitfalls etc.), in fact I think it was prudent to do so from the earliest possible moment.
I also think that moves in Switzerland to stop or rethink the envisaged privatisation of Swisscom, which have now been set in motion, are welcome and deserve further information input from our Irish experience.

P.

eircomtribunal

150k/50k: €5.82
600k/100k: €31.67
1.2m/200k: €44.60
2.4m/200k: €64

Not spectacular and not cheap, but very affordable when the PPP is taken into consideration (Purchasing power).

Hence Switzerland has a very healthy broadband usage record.

Look at the cheapest and slowest package: It is time based and an hour will cost the equivalent of € 1.55.
But look at the difference to our Irish version (TM Comreg) of "flat rate":
The Swiss version will have a max bill of € 38 per month, while the Irish version dial-up false "flat-rate" will really start to eat into your pocket after the hours in the FRIACO based package are used up.

The Swiss version will encourage people to buy the product and get online, because it gives them price certainty (cap of € 38) and if they use it only very little they will have to pay less. The Irish false "flat rate" dial-up packages do the opposite: they don't give price certainty, but take the full package price (some 30 euros for the 150 hours eircom package) even if you might only use them very little. Hence they are a flop and most people stay on the even more expensive per minute dial-up and use the net for as short a time as possible...

And while Eircom cherry-picks its dls roll-out ADSL is universally available in Switzerland.

P.

bk

Heinrich wrote:

The salaries in CH are far superior to here so it is a silly comparison!

The GDP per capita isn't that different
Ireland purchasing power parity - $31,900 (2004 est.)
Switzerland purchasing power parity - $33,800 (2004 est.)

and it isn't just the price, it is also the speeds offered, Eircom will soon offer faster and better products then these.

Solair

I know a few Swiss people and swisscom arn't really that great. Remember, Switzerland isn't in the EU and thus didn't really have to deregulate telecoms in the same way that the rest of us did. It operates in a very different market climate to eircom.

The major issue was the Swiss Government decided that Swisscom's overseas investments were risky and would comprimise the company's ability to invest in its own network at home. To be quite honest, they're potentially biting off way more than they can chew. The Danish telco and KPN Netherlands would be enormously expensive. This had nothing whatsoever to do with Eircom's accounts / standing.

Swisscom's currently cash rich, but perhaps buying up other incumbant telcos in Europe isn't the best strategy for switzerland even if it might be for Swisscom as a company.

This Swiss govt is a little nervous about a state-owned utility overstretching itself with these kinds of investments, particularly in the aftermath of the Swissair collapse etc etc..

Buying incumbant telcos isn't necessarily a good deal either. None of them have much growth potential! At least eircom's operating in one of europe's fastest growing economies and has access to enormous corporate clients as we attract so much inward investment.
They're hardly in a bad position even if their DSL service sucks.

Sponge Bob

Solair wrote:

This Swiss govt is a little nervous about a state-owned utility overstretching itself with these kinds of investments, particularly in the aftermath of the Swissair collapse etc etc..

Forgot about that .

bealtine

Swisscom to draw up new strategy, eircom talks broken off


The board of directors of Swisscom will draw up new strategies, when the Swiss government has formalised its new expectection by the end of this year. At the same time the Swiss telecommunications operator has decided to break off talks it was holding to acquire Irish telecommunications operator eircom. These actions were caused by the instruction of the Swiss government, which holds 66 percent of the Swisscom shares, to its representative on the Swisscom board of directors to vote against a possible acquisition that Swisscom might make abroad and, instead, to support the distribution of free capital to shareholders. The Swisscom board of directors has since reviewed various options open to the company and held talks with representatives of the Swiss Confederation. Until the expectation of the government has been revieweed, the members of the Swisscom board of directors and executive board have agreed not to make any personnel-related decisions regarding their own person.The board of directors assumes that the Federal Council will approve the strategic goals of Swisscom's principal shareholder for 2006 - 2009 by the end of this year.
The governement decided to initiate the political process that will allow the Confederation to give up fully its holding in Swisscom. In light of developments over the past week, Swisscom takes the view that the 2006 – 2009 strategic goals to be published by the government must contain clear-cut statements, particularly with regard to compliance with the Telecommunications Enterprise Act, the international strategy, the payout policy, the privatisation process (in options), the implications of an instruction from the government representative (liability and sanction issues), communication between the government and Swisscom, and the unalterable validity of these strategic goals over the four-year period.

crawler

It's all over 100% QED.

http://www.theregister.co.uk/2005/12/05/swisscom_eircom/

eircomtribunal

Also commented on ENN. Interesting the last sentence on the Register and ENN:

Instead of looking to invest overseas, Swisscom intends to chuck EUR650 million (STG440 million) a year into investment in Switzerland's telecoms infrastructure and services such as broadband TV.

P.

Sponge Bob

of further note, swisscom may buy abroad, the government ban is on purchase of companies with universal service obligations ONLY .

OfflerCrocGod

Sponge Bob wrote:

of further note, swisscom may buy abroad, the government ban is on purchase of companies with universal service obligations ONLY .

LOL, are you telling me the Swiss goverment was worried about Swisscom being able to provide 0.0kbps?