SWISSCOM

Analysis of Swisscom share price

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To be able to implement a good investment strategy on the Swisscom share price, you must first of all have in your possession all the important information about this company and that we are going to reveal to you in this page. We will discover together the activities and the sources of income of this company but also its main competitors on the market, its recent partnerships or its major strengths and weaknesses. We will also explain to you how you can succeed in a fundamental analysis of this stock.

Elements that can influence the price of this asset:

Analysis N°1

In particular, we will have to keep an eye on the strategic changes that the group may implement in the coming years, especially with regard to organizational changes.

Analysis N°2

It will also be necessary to closely monitor all operations aimed at increasing the company's expansion in Europe, such as the investments made to extend its network.

Analysis N°3

Figures on the growth of telecommunication services in the areas in which the Swisscom Group is active will also be monitored as part of this analysis, as will data from the market on the demand for mobile broadband.

Analysis N°4

Of course, competition has a strong influence on Swisscom's share price and you should therefore take this pressure into account and study the historical competitors as well as the new entrants.

Analysis N°5

To maximize your studies of Swisscom stock, you should also carefully follow the increasingly rapid changes in technology, especially with regard to 5G and the innovations Swisscom is creating to position itself for it.

Analysis N°6

Lastly, it must also monitor global economic growth or slowdown, particularly in the euro zone, which can have a strong influence on its activities.

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General presentation of Swisscom

Now, we propose you to discover some essential information concerning the company Swisscom and its activities. Indeed, you must know the sources of revenue of this company to understand the challenges and opportunities for growth in the years to come.

The Swisscom Group is a Swiss company specializing in the telecommunications sector. More precisely, this company is currently the leading Swiss telecommunications operator.

To better understand the activities of this company, it is possible to divide them into several divisions according to the share of turnover they generate and in this way:

  • Firstly, the majority of the group's revenues come from fixed and mobile telecommunications services, which generate more than 69.9% of group revenues. These activities include fixed and mobile telephony, data transmission, Internet access, television and radio broadcasting.
  • Next come activities involving the construction, maintenance and operation of communication infrastructures, which generate 8.9% of turnover.
  • Interconnection services for telecommunications operators represent 8% of revenues.
  • The next largest business is the sale of fixed and mobile telephones, which generates 7.8% of the company's turnover.
  • Finally, the balance of the turnover, i.e. 5.4%, comes from related activities.

It is also interesting to know the geographical distribution of the group's income, which generates 78.3% of its turnover in Switzerland, 21.5% in Italy and 0.2% in the rest of Europe.

Analysis of Swisscom share price
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The major competitors of Swisscom

Now we're going to tell you a little more about the Swisscom Group's main competitors. Indeed, the company is facing some major opponents that you should know and study in your analysis. At the moment, the Swisscom Group only has these two opponents on the Swiss market, but you should also keep an eye on possible new entrants in this sector.

Sunrise Communications Group

This company is also a Swiss telecommunications company. It is the second largest mobile operator in Switzerland with a 25.9% market share just after Swisscom. This company was formerly owned by CVC Capital Partners who bought it from the Danish TDC in 2010. The company is primarily known for its fixed-line telephony, Internet access and mobile telephony services since its merger with diAX.

Salt Mobile

The other direct competitor to Swisscom is Salt Mobile, which was formerly known as Orange Communications. This Swiss telecommunications company is currently the third largest telephone operator in Switzerland with a market share of almost 17%. Following its takeover by Xavier Niel, the company's name was changed to Salt.


The major partners of Swisscom

After having reviewed the most important adversaries of Swisscom in its sector of activity, we propose to discover some of its strategic allies. Indeed, Swisscom has also been able to set up partnerships with other companies to boost its growth and here are two concrete examples:

Ericsson 

First of all and after starting a strategic partnership in 2015 and then extending it a first time to 5G in 2017, Swisscom announced in 2020 a new partnership with Ericsson or rather a renewal of its existing partnership. The objective here is to continue the 5G transformation in Europe. The contract of this agreement thus includes the deployment of autonomous or standalone 5G and should allow Swisscom to take advantage of the entire Ericsson portfolio with 5G as the main catalyst. This strengthening of the partnership could lead to new opportunities in the field of the Internet of Things or IoT or Industry 4.0 as the company points out.

Salt

Another partnership recently put in place by Swisscom was with its competitor Salt in 2020. Thus, the Swiss operator announced the signing of this partnership in optical fiber with the firm owned by Xavier Niel which made its stock jump on the stock market. The incumbent Swisscom has thus extended its cooperation with Salt by setting up a partnership that should allow it to pool investments, as indicated in the press release published on the occasion of its quarterly financial report. Swisscom thus plans to increase its FTTH coverage to nearly 60% of the population before the end of 2025. Following this announcement, the Swisscom share gained 6.04% on the stock exchange, also supported by quarterly results that exceeded expectations, while the Swiss market's benchmark index, the SMI, rose by only 0.17%.

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The factors in favour of a rise in the Swisscom share price:

To know how a stock is likely to behave in the future, it is also necessary to know how its issuing company can evolve in the more or less long term. This is why you need to know the strengths and weaknesses of this group, which we will present in detail here.

Let's start our analysis of the pros and cons of Swisscom stock with a summary of its main strengths:

  • First of all, it should be noted that Swisscom currently has a very strong presence in the Swiss domestic market, where it has the largest market share, far ahead of its two competitors.
  • The group's customer base is also one of its strengths, as Swisscom currently has more than 6 million customers in Switzerland, mainly in the mobile segment, and almost 1.7 million broadband connections.
  • The Swisscom Group's major advantages include the growth of its revenues in Switzerland in recent years and the stability of its financial results.
  • Swisscom's workforce and size is also a major asset, as the group currently employs over 20,000 people, mainly in Switzerland.
  • Finally, the group's last asset is its highly effective marketing strategy and the quality of its communication and advertising, which enable it to constantly win new customers.
The factors in favour of a drop in the Swisscom share price:

As mentioned above, the Swisscom Group has not only advantages and strengths, but also some weaknesses that you should consider before taking a position on this stock:

  • First of all, it should be noted that the Group's operations remain highly dependent on the Swiss market alone, which represents a significant geo-economic risk with a high exposure to this market.
  • Finally, the second major shortcoming of Swisscom concerns its lack of presence in other markets, including the European and international markets, where its competitors are present.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What were the Swisscom Group's latest financial results?

The Swisscom Group publishes its annual financial report in which you will find many interesting figures. The latest report concerns the financial year 2020 and shows a turnover of CHF 11,100 billion with a net result of CHF 1,528 billion and a debt of CHF 14,11 billion. The Group's market capitalisation reached CHF 24.715 billion.

How did Swisscom come into being and how?

Swisscom, before becoming the leading company in the Swiss telecommunications market that it is today, was the result of the division of the PTT in 1997. It is still owned by the Swiss state, which holds 51.2% of the shares. Moreover, the company has the status of a public limited company under public law according to the law on telecommunications companies. Today, the group has grown considerably and employs around 20,000 people in its companies as well as 1,000 apprentices.

What are the holdings of the Swisscom Group?

The Swisscom Group has holdings in several business areas, including television broadcasting through Swisscom Broadcast AG, network construction and maintenance through Cablex, property management and business travel through Swisscom Immeubles AG, billing and collection through Alphapay and Medipa Caisse de Facturation SA, and mobile solutions through Minick Holding and Sicap SA.

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