Swisscom AG (SCMN.SW) | Investment Case

1. Company Snapshot

1.a. Company Description

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally.It operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating.The company offers mobile and fixed-network services, such as telephony, broadband, TV, and mobile offerings, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises.

It also provides cloud, outsourcing, workplace, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed-line and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products.In addition, the company plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband and mobile services, such as telephony, mobile offerings, and broadband services, as well as ICT solutions for residential, business, and wholesale customers.Further, it provides IT and network services; online and telephone directories; and cross-platform retail media and security communication services, as well as builds and maintains wired and wireless networks.

The company was founded in 1852 and is based in Bern, Switzerland.

Show Full description

1.b. Last Insights on SCMN

Recent negative drivers behind Swisscom AG's performance include the revision of EBITDA guidance to 4.3-4.4 billion Swiss francs for 2024, down from 4.5-4.6 billion francs previously guided, following the successful completion of the Vodafone Italia acquisition. The company's revised guidance is attributed to the integration challenges and increased competition in the Italian market. Additionally, the acquisition's impact on the company's focus on the Swiss market remains unchanged, as stated by CEO Christoph Aeschlimann.

1.c. Company Highlights

Last Price	557.5
Change Percentage	-0.62%
Open	559.5
Previous Close	561
Market Cap ( Millions)	28880
Volume	57791
Year High	604
Year Low	491
M A 50	583.84
M A 200	562.35

FCF Yield	8.53%
Dividend Yield	3.95%
ROE	11.04%
Debt / Equity	32.21%
Net Debt / EBIDTA	65.30%
Price To Book	2.49
Price Earnings Ratio	21.7
Price To FCF	11.72
Price To sales	2.22
EV / EBITDA	5.92

2. Swisscom's Q3 2025 Earnings: A Mixed Bag

Swisscom's Q3 2025 revenue came in at CHF 3.7 billion, down 1.8% year-over-year, slightly softer than expected. EBITDAaL was in line with expectations, and the company's full-year guidance was confirmed. The actual EPS came out at '5.08', below estimates of '7.25'. The revenue decline was largely driven by a CHF 83 million decrease in Switzerland and a EUR 57 million decline in Italy. The company's net income was down CHF 295 million year-over-year, mainly due to higher interest expense and lower EBIT.

Publication Date: Nov -07

                                    📋 Highlights
                                    Revenue and Guidance::
                                                Q3 revenue slightly down 1.8% to CHF 3.7 billion; full-year revenue guidance remains at CHF 15 billion with EBITDAaL of CHF 5 billion
Italy Integration Progress::
                                                CHF 200 million synergy target confirmed for 2026, with 87% 5G+ coverage and 54% FTTH rollout achieved
Customer Service and NPS::
                                                Improved Net Promoter Scores (NPS) in Italy post-integration, with churn rate reduced to 15.8% and mobile B2C losses improving
Cost Savings and Synergies::
                                                CHF 50 million cost savings target met by Q3 end; CapEx for 2025 projected between CHF 3.1–3.2 billion
IT and Innovation Growth::
                                                Launched AI chatbot for SMEs (10k+ subscriptions) and cloud platform for Swiss Armed Forces; IT profitability aims for 10% increase

                                

Segmental Performance

In Switzerland, the competitive environment remains stable, with net adds evolution stable at around 45,000 on the mobile side. Wholesale has a pleasing result with 14,000 net adds. The company's "We are Family" offering is driving net adds on the main brand. In Italy, the market remains competitive, but prices have stabilized. The company has seen an accelerating loss on the mobile side, but B2C losses are improving. Broadband is improving, with net adds loss halved between Q1 and Q3.

Operational Highlights

The company has made significant progress in its integration efforts in Italy, with synergies ramping up. The company has finalized its integrated organization, launched a new aligned product portfolio, and is serving customers of both brands in all stores. SIM migration is progressing in line with plan, with roughly all customers to be migrated by year-end. The company is confident in realizing the planned CHF 200 million of synergies in 2026.

Valuation and Outlook

Swisscom's current valuation metrics indicate a P/E Ratio of 23.06, P/B Ratio of 2.65, and EV/EBITDA of 6.25. Analysts estimate next year's revenue growth at -0.8%. The company's dividend yield stands at 3.71%, providing a relatively stable return for investors. The company's guidance confirms revenue in Switzerland and Italy trending towards the lower end of the guided range. The dividend guidance of CHF 26 is confirmed.

Management's Perspective

The company is cautious about extrapolating the same level of cost savings into future quarters, but the cost initiatives continue to deliver. The company's CEO noted that the recent price rise on Wingo in Switzerland had no impact on NPS and churn. In Italy, the goal is to stabilize service revenue in the midterm, with price increases and back book alignment expected to help improve service revenue next year.

3. NewsRoom

New Amazon Bedrock AgentCore Capabilities Power the Next Wave of Agentic AI Development

Dec -02

Source:

Is There An Opportunity With Swisscom AG's (VTX:SCMN) 50% Undervaluation?

Nov -23

Source:

Swisscom Expands Autonomous Networking With Netcracker for B2B Domain

Nov -11

Source:

Swisscom AG's (VTX:SCMN) largest shareholders are state or government with 51% ownership, individual investors own 31%

Nov -06

Source:

RiPSIM Gains Strategic Backing From Swisscom Ventures

Oct -28

Source:

Netcracker Ranked as a Global Leader in Service Design and Orchestration and Monetization Platform Markets by Analysys Mason

Oct -22

Source:

ZeroFox Partners with Swisscom to Advance Digital Risk Protection in Switzerland

Sep -18

Source:

Societe Generale: shares & voting rights as of 31 August 2025

Sep -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.47%)

6. Segments

Swisscom Switzerland - Residential Customers

Expected Growth: 2.5%

Swisscom's residential customer base is driven by increasing demand for high-speed internet and digital services, supported by the company's strong brand reputation and extensive network coverage.

Swisscom Switzerland - Business Customers

Expected Growth: 4.5%

Swisscom's strong brand reputation, extensive network coverage, and increasing demand for digitalization in the business sector drive growth in the business customer segment.

Swisscom Switzerland - Wholesale

Expected Growth: 3.5%

Swisscom's wholesale services will drive growth, fueled by increasing demand for high-speed data and voice services, and the company's strong network infrastructure and extensive fiber-optic network.

Fastweb

Expected Growth: 7.4%

Fastweb's growth is driven by increasing demand for high-speed internet and digital services in Italy, supported by Swisscom's strong brand reputation and continuous investments in network infrastructure.

Other Operating Segments

Expected Growth: 4.2%

Swisscom's miscellaneous operating segments are expected to grow driven by increasing demand for IT services, expansion of digital transformation projects, and growing adoption of cybersecurity solutions, supporting the growth of its miscellaneous operating segments.

Swisscom Switzerland - Infrastructure & Support Functions

Expected Growth: 2.5%

Swisscom's infrastructure and support functions are expected to grow steadily, driven by increasing demand for digital services, 5G network deployment, and the company's focus on cost savings and operational efficiency.

Intersegment Elimination

Expected Growth: 2.5%

Swisscom's internal transaction elimination will drive cost savings, boosting profitability. The telco's focus on digital transformation and 5G network investments will further enhance its competitiveness, driving growth in the Swiss telecom market.

7. Detailed Products

Mobile Subscriptions

Swisscom offers a range of mobile subscriptions for individuals and businesses, including voice, data, and SMS services.

Fixed Network Services

Swisscom provides fixed network services, including broadband internet, TV, and landline phone services for homes and businesses.

ICT Solutions

Swisscom offers customized ICT solutions for businesses, including cloud services, cybersecurity, and data analytics.

Digital Business Solutions

Swisscom provides digital business solutions, including IoT, artificial intelligence, and blockchain services.

Cybersecurity Services

Swisscom offers cybersecurity services, including threat detection, incident response, and security consulting.

Cloud Services

Swisscom provides cloud services, including infrastructure, platform, and software as a service.

8. Swisscom AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Swisscom AG operates in a highly competitive market, and customers have various alternatives for their telecommunications needs. However, the company's strong brand reputation and extensive network coverage mitigate the threat of substitutes.

Bargaining Power Of Customers

Swisscom AG's customers have some bargaining power due to the availability of alternative service providers. However, the company's strong market position and diversified product offerings reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Swisscom AG has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term contracts with suppliers also mitigate the bargaining power of suppliers.

Threat Of New Entrants

The telecommunications industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This reduces the threat of new entrants and allows Swisscom AG to maintain its market position.

Intensity Of Rivalry

The Swiss telecommunications market is highly competitive, with several major players competing for market share. Swisscom AG faces intense competition from rivals such as Sunrise Communications and Salt Mobile.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	14.15%
Debt Cost	4.75%
Equity Weight	85.85%
Equity Cost	4.75%
WACC	4.75%
Leverage	16.48%

11. Quality Control: Swisscom AG passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Orange

A-Score: 7.2/10

Value: 6.3

Growth: 3.9

Quality: 4.4

Yield: 9.4

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

AT&T

A-Score: 7.0/10

Value: 7.1

Growth: 2.6

Quality: 5.7

Yield: 9.0

Momentum: 8.5

Volatility: 9.3

1-Year Total Return ->

Verizon

A-Score: 6.9/10

Value: 7.0

Growth: 3.1

Quality: 5.5

Yield: 10.0

Momentum: 5.5

Volatility: 10.0

1-Year Total Return ->

Orange Polska

A-Score: 6.5/10

Value: 7.3

Growth: 4.1

Quality: 4.5

Yield: 8.1

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

Vodafone

A-Score: 6.1/10

Value: 9.4

Growth: 1.2

Quality: 2.0

Yield: 8.8

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

Swisscom

A-Score: 6.1/10

Value: 5.0

Growth: 2.8

Quality: 6.4

Yield: 6.9

Momentum: 5.5

Volatility: 10.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-5.91%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.75%

Swisscom AG - CH0008742519

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SCMN

1.c. Company Highlights

Less Volatile

Better Quality

Weak Momentum

Earnings Beats

Revenues Miss

Average Yield

Earnings Miss

Average Growth

Stable Momentum

Higher Yield

Revenues Beats

Average Quality

2. Swisscom's Q3 2025 Earnings: A Mixed Bag

Segmental Performance

Operational Highlights

Valuation and Outlook

Management's Perspective

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.47%)

6. Segments

Swisscom Switzerland - Residential Customers

Expected Growth: 2.5%

Swisscom Switzerland - Business Customers

Expected Growth: 4.5%

Swisscom Switzerland - Wholesale

Expected Growth: 3.5%

Fastweb

Expected Growth: 7.4%

Other Operating Segments

Expected Growth: 4.2%

Swisscom Switzerland - Infrastructure & Support Functions

Expected Growth: 2.5%

Intersegment Elimination

Expected Growth: 2.5%

7. Detailed Products

Mobile Subscriptions

Fixed Network Services

ICT Solutions

Digital Business Solutions

Cybersecurity Services

Cloud Services

8. Swisscom AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Swisscom AG passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

557.5$

12.e Scoring ^Insights

12.f DCF ^BETA