Earnings call transcript: Swisscom Q3 2025 revenue dips, guidance confirmed

Swisscom reported its financial results for the third quarter of 2025, revealing a slight decline in revenue compared to the previous year. The company confirmed its full-year guidance, targeting revenue of approximately CHF 15 billion and EBITDA of CHF 5 billion. Despite a challenging market environment, Swisscom remains focused on innovation and strategic initiatives, including the expansion of AI and cybersecurity services.

Key Takeaways

• Swisscom’s Q3 2025 revenue was CHF 3.7 billion, down 1.8% year-over-year.
• The company confirmed full-year guidance, expecting revenue at the lower end of its range.
• Cost savings of CHF 50 million were achieved by the third quarter.
• Swisscom launched new AI and network services, expanding its technological footprint.
• The company completed the integration of Fastweb and Vodafone Italy.

Company Performance

Swisscom’s performance in Q3 2025 reflects a slight contraction in revenue, primarily due to a decrease in service revenue in both Switzerland and Italy. The telecommunications giant managed to keep its Swiss revenue nearly flat while facing a more challenging environment in Italy. The company’s focus on cost savings and operational efficiency has helped mitigate some of the revenue pressures.

Financial Highlights

• Revenue: CHF 3.7 billion, a decrease of 1.8% year-over-year.
• Year-to-date revenue: CHF 11.1 billion, down 2.1% year-over-year.
• Group EBITDA is on track to meet the CHF 5 billion guidance for the full year.

Outlook & Guidance

Swisscom has reiterated its full-year guidance, projecting revenue around CHF 15 billion and EBITDA of CHF 5 billion. The company expects its capital expenditure to range between CHF 3.1 billion and CHF 3.2 billion. Looking ahead, Swisscom aims to stabilize service revenue in Italy by 2026 and continues to focus on integrating its Italian operations to realize synergies.

Executive Commentary

Christoph Aeschlimann, CEO of Swisscom, highlighted the company’s achievements, stating, "We are extremely proud to be the winner of all Connect service tests." He also emphasized the strategic focus on AI, saying, "We are pushing very heavily in providing AI consultancy, AI infrastructure services." Aeschlimann reiterated the goal of stabilizing service revenue in both the B2C and B2B segments in the midterm.

Risks and Challenges

• Declining service revenue in Italy poses a challenge to growth.
• The B2B market in Switzerland is experiencing a slowdown due to trade tensions.
• The competitive environment in the Swiss telecom market remains stable but intense.
• Macroeconomic pressures could impact consumer spending and investment.

Swisscom’s Q3 2025 earnings call highlighted the company’s resilience in a challenging market, with a focus on strategic innovation and operational efficiency. The confirmation of full-year guidance underscores Swisscom’s confidence in its ability to navigate current market conditions while pursuing growth opportunities in AI and network services.

Full transcript - Swisscom AG (SCMN) Q3 2025:

Conference Host, Swisscom: Good morning, ladies and gentlemen. Thank you for joining the Swisscom Q3 2025 results, hosted by Christoph Eschlimann, Eugen Stermetz, and Louis Schmid. Louis, the floor is yours.

Louis Schmid, Head of Investor Relations, Swisscom: Good morning, ladies and gentlemen, and welcome to Swisscom’s Q3 2025 results presentation. My name is Louis Schmid, Head of Investor Relations, and with me are our CEO, Christoph Aeschlimann, and Eugen Stermetz, our Chief Financial Officer. Let’s now move to page number two with the agenda of today. As you can see, our CEO starts the presentation with Chapter One and a quick overview on the highlights, the operational, and financial performances of the third quarter. Then, in Chapter Two, Christoph presents the business update for Switzerland and Italy. In the second part of today’s results presentation, Eugen runs you through Chapter Three with our third quarter financials, including the confirmation of our full-year guidance. With that, I would like to hand over to Christoph to start his part. Christoph. Thank you, Louis, and welcome to this Q3 2025 call from my side.

I will move directly to page number four, showing the highlights of Q3. You can see that this quarter, again, was packed with a number of highlights. We have been able to complete the Connect service tests with the last test that we won this year. We have now won all four service tests, highlighting our unwavering commitment to the best customer service, reinforced the multi-brand play with a new micro offering, and we are extremely proud of our new BEAM offering, for which we launched new additional services, advanced additions, apps, and further tiers, which have been launched in the past weeks. South of the Alps in Italy, everything is going according to plan. Integration is proceeding as we have foreseen, with integration costs and synergies fully in line.

The highlight in Q3 in Italy was the aligned new market portfolio that we launched for the B2C and B2B market, which I will talk a bit more in detail later on in the Italian chapter. Finally, we have confirmed group guidance with revenues roughly at the lower end, towards CHF 15 billion, EBITDA of CHF 5 billion, and CapEx between CHF 3.1-3.2 billion, also probably rather at the lower end of the range. Now, moving to page number five, you can see the net trends in Switzerland and Italy. I will start with Switzerland. Overall, the competitive environment is broadly stable, with, I would say, more aggressiveness recently from Sunrise again, as we probably discussed later on also in the Q&A. On the mobile side, the net evolution is stable. You see roughly a run rate around 45,000 net adds on a quarterly basis.

Very pleasing results from our perspective for our mobile business, and broadband and TV are slightly improving quarter on quarter. We’re still negative net adds, but a much better run rate than we had in Q1 earlier this year. If you look at the wholesale side, we have a very pleasing result in Q3 with plus 14,000 net adds. You can see stable or accelerating growth on the wholesale side. Overall, we have more net adds on the wholesale business than we are losing lines on our B2C. We can at least partly compensate what we are losing on the consumer side on broadband with new access lines on the wholesale side, which is especially tilted towards fiber connectivity, as we will see later on in the details. Now, on the Italian side, the market remains competitive, but prices have been pretty stable in the last year.

We can see that the prices are clearly bottoming out, and the market is not getting more aggressive. Now, in terms of net adds evolution, we have on the mobile side an accelerating loss, which is, actually, if you look at the underlying, the B2C losses are improving. We have less losses this year, clearly better B2C business, but we have less net adds coming in on the B2B side because the TM9 government contract ramp-up is coming to an end. Less, let’s say, net adds on B2B, so a bit less compensating the B2C decline, which leads to an overall minus 39,000 net adds on a company level. On the other side, broadband is improving, and we will see, particularly on the B2C side, things are improving very rapidly. I will talk a bit more about that later on.

Overall, quarter over quarter, you can already see that net adds loss has been halved, more than halved between Q1 and Q3, from minus 67,000 to minus 33,000 net adds. Overall, wholesale also pretty stable, run rate around 50,000-45,000 net adds per quarter. We have been able to stabilize the growth in the wholesale side and also compensating the losses on the broadband side. I think pretty happy about the wholesale business in Italy. Now moving on to page number six, you can see that Q3 revenue was slightly softer at CHF 3.7 billion, minus 1.8%, bringing us to year-to-date revenue of CHF 11.1 billion, which is minus 2.1%. The EBITDA average, you can see on the right-hand side, Switzerland is pretty stable with minus CHF 5 million in quarter three, bringing us to a total minus CHF 11 million year-to-date.

In Italy, we have the transitional year with the integration and the, let’s say, turnaround of the B2C business. Eugen will detail the financial numbers a bit more in detail later on in the financial section. So far, I would say EBITDA is in line with expectations and in line with our full-year guidance. Now I will move on to page as a business update for Switzerland and Italy and directly go to page number eight, where you can see our priorities for 2025. Pretty unchanged compared to last quarter. In Switzerland, we want to defend the telco top line, make sure the service revenue erosion is as slow or low as possible, deliver on the cost savings. You have seen that we have already achieved the full-year cost target by end of Q3, and we want to further grow on the IT side.

In Italy, it’s similar priorities, but more geared towards the integration. Of course, the priority number one is to proceed on the integration of the two organizations and capture the synergy potential, but at the same time, stabilizing the telco business and reducing the service revenue erosion that we are seeing this year so that next year we have a substantially better position, especially on the B2C side. At the same time, we want to accelerate the energy business, selling more services beyond the core while scaling up the B2B IT and wholesale part to stabilize the overall business in Italy. You can see now how we are doing regards to these priorities. I’ll move on to page number nine, looking into B2C Switzerland. As I already highlighted at the beginning of the call, we are extremely proud.

To be the winner of all Connect service tests for best shop, best app, and best wireline and mobile hotline. I think this is an important achievement. To test and show and demonstrate to the market that the Swisscom customer service is indeed the best customer service in the country. We’re also very pleased with the evolution of the We Are Family offering that we launched earlier this year. We continue to drive this offer in the market to sustain net adds on the main brand and make the main brand more appealing for family households. With this regard, we have also worked on our third brand positioning, especially with Migros. Before, it was called M-Budget. Now, Migros relaunched the mobile brand under the main retailer brand, which is called Migros. So. This.

Should help generate more net adds going forward with attractive offers under a new name and a more customer-centric offering. We have also launched a dedicated AI offering or AI chatbots for private consumers. This offering is called Swisscom My AI. It’s a chatbot, basically in a sovereign mode, where the consumer data is not used for training and respects data privacy. There is a free version and then a paid version at CHF 14.90. We see quite some good traction already, at least on the utilization side in the consumer space. You can see on the right-hand side, RGU and ARPU evolution. Churn is at a very stable record low level of 7.7% for fixed and 6.8% for mobile. ARPU on the wireline side is pretty stable, which is, I think, very positive news.

The mobile ARPU erosion of minus CHF 1 is mainly driven by the ongoing brand shift between main brand and second brand, but the ARPUs on a brand level are actually stable as well. Moving on to B2B on page number 10. We are gradually integrating the BEAM offering in all our existing product portfolios, but we do see quite a lot of competition in the market. You can see this on the ARPU box in the middle, where you see quite a heavy erosion on postpaid and average underlying product of minus CHF 3, which is basically driven by price competition in the market. This is why it is so important that we launched a new BEAM offering to be able to upsell more security services and also.

Create convergence effect on the B2B side and retain more customers with a broader product portfolio instead of competing just on price with Salt and Sunrise. We will continue to ramp up the BEAM services. We have launched a new ATL marketing campaign in September. So far, subscription take-up is very pleasing. We are ahead of plan, which is good news. We have now started enabling our partner channels so that we can, as you know, on the SME front, a lot of sales are not driven in a direct sales mode, but more in an indirect sales mode through partner channels. This is an important piece of the ramp-up next year. We have started enabling all our partners to sell the BEAM offering, especially the higher-end editions, which are more complex to sell, but obviously are more interesting from a revenue perspective.

On the IT side, quarter on quarter, we have, or year on year, between Q3 and Q4, we have, sorry, between Q3 2024 and Q3 2025, we have a stable revenue evolution. The growth, we were not able to materialize growth on the IT side, suffering to some extent a bit from macro conditions in Switzerland. There is quite a substantial slowdown in the IT market in Switzerland, also still due to the integration of Credit Suisse and UBS, which took quite a lot of volume out of the IT market. We can see this now in the numbers. I think already a stable service revenue evolution is actually quite a good achievement. We are obviously aiming to bring that back to growth starting Q4 this year, but especially also next year. I think the highlight is the new.

Cloud platform that we delivered for the Swiss Armed Forces. This project is now nearing completion by end of the year and will be the basis for new IT services that we deliver to the Swiss Armed Forces going forward over the next years and will be a good driver of further IT revenue growth going forward. In parallel, we are also working on the profitability and our operating model, which we continue to transform to improve IT profitability. You can see that despite having no revenue growth, we were able to increase profitability by 10%, up CHF 3 million to CHF 35 million quarter on quarter, which is, I think, excellent news. We will continue to drive IT profitability also next year to extract more cash flow from the IT service revenues.

Also on the IT side, we have just launched a couple of weeks ago a chatbot for SME. It is basically very similar to the My AI for consumers, but this one is geared towards SME companies so they can upload their own documents and use a highly secured and data-private chatbot for their own company, which is quite a high demand, especially in the public sector and some other areas where people have more needs for data privacy and cannot use, let’s say, public cloud or public offerings. Now, on the network and wholesale side, on page 11, we can see that our, let’s say, network rollout is continuing. We are now at a 5G Plus coverage of 88%, fully on track to achieve our 90% target for the full year in 2025. Also, fiber rollout is continuing. It is up plus 5%.

We have now a 55% coverage with 10 gig connectivity across the country, also in line to achieve our full-year target that we have set up for the FTTH rollout. Also on our network, we were able to win the Connect fixed network test for the fifth time in a row with a record 991 points out of 1,000. You can see that on the right-hand side that we are able to monetize also our network in better ways, especially with fiber rollout. We are accelerating. The net adds on the wholesale side. We have more market share on the lines and also plus 4% revenues. Access revenues are up by 4% from CHF 48 million to CHF 50 million on a quarterly basis. I think what is especially interesting, you can see that the FTTH penetration on our wholesale business is increasing very rapidly. Bless you, Louis.

It’s up by 7%, and we have now nearly half of our wholesale lines, which are fiber-based, precisely 49%. We expect this to be over 50% by the end of the year. Linked to this also, the copper phase-out is going very well. We do not have numbers on this slide, but we already managed to decommission over 350,000 copper lines. At the peak, we had 2 million lines in activation, and we are now standing at 1.65 million copper lines, which is already, so we already achieved our full-year phase-out target by end of Q3, which is also a very pleasing development. On the network side, if you look on page number 12, you can see that we have already achieved our full-year target of CHF 50 million cost savings by the end of Q3. I would like to put in a word of caution.

We shouldn’t get too excited about this because, I mean, it’s great that we have achieved the full-year target, but we don’t expect much more cost savings to come in in Q4. Please don’t extrapolate the growth we have between Q2 and Q3 further into the year. This is definitely way too optimistic. I would say we come in at 50 plus, but not much more in Q4 to come. What is, I would say, the good news is that the cost initiatives continue to deliver, especially we continue to digitize our customer service. We continue to automate it. We continue to push AI everywhere. We have now launched our unified contact service platform, which is heavily AI-driven, which will continue to deliver new cost savings next year. We are experimenting with new shop formats, AI in the physical stores. We are further expanding nearshore.

Of course, we are especially pushing further simplification on the network in IT. This also will continue to deliver cost savings, especially 2026 and onwards. Okay, that was it for Switzerland. I will now move on to Italy. On page number 13, you can see the highlights of the integration, which is progressing as planned, and synergies are ramping up. We have completely finalized our integrated organization, which is fully operational now. We have launched a new aligned product portfolio. It is not a unified single product portfolio, but we essentially have exactly the same product portfolio under two different brands, once on the Fastweb side and once on the Vodafone side. We are now able to serve customers of both brands in all stores. Also, most importantly, the SIM migration is progressing in line with plan.

As you know, we have about CHF 200 million of synergies planned next year linked to the SIM migration. We can confirm that the migration is going according to plan, and roughly all customers will be migrated by year-end. We are very confident to realize the planned CHF 200 million of synergies in 2026. Also, the other projects are ongoing as planned. We have already shut down the first waterfront group services, and we have terminated and transferred to internal resources. We are continuously working on carving out more and more services over the coming months. Also, IT and network consolidations have started. Now, moving on to page number 14, we will have a deeper look into the B2C mobile side. You can see that we have this joint mobile portfolio. You can see some screenshots in the middle.

The pricing and the features of the products are completely aligned. We are continuously working also on improving customer treatment in the shops, but also in call center. You can see on the right-hand side that all this work is starting to pay off. The churn has significantly decreased from 20% or nearly 23% to roughly 18%. We will continue to work on better customer service, also leading to higher NPS. We can already see in our customer surveys that NPS on both brands is improving. I think this is good news. We can see that the value strategy that we are executing or moving from volume to value is paying off. We are seeing an improved net ads picture. You can see on the top right. We typically had over 100,000 negative net ads.

We are now at minus 79,000, so still negative. The outflow, which is typically high, our outflow has been substantially slowed down. Sales coming in is also slightly lower, but a much higher quality, with customers really using our services. The ARPU delta we are having between churn and net adds has been substantially decreased. We are further working on this to close the gap and reduce service revenue erosion readily over the next year. One other important topic on the B2C mobile side is the repositioning of HO Mobile. We have positioned HO Mobile as a clear attacker brand and Fastweb as a clear premium brand. We will continue to work on this brand positioning to make it clear that we have a clear dual-brand strategy with a different service offering on both brands. Now, moving on to page number 15.

You can see that. We have also launched a new fixed portfolio, which is what we call Super Converged, which is essentially broadband with energy services, which is an important element to drive new service revenue in Italy. You can see that up to now, we have minus 170,000 RGUs year to date, which is impacted by this value strategy and front-book price alignment. Transparency and customer centricity are delivering first positive results. You can see we have higher NPS. Churn has also substantially decreased to 15.8%. You can now see that the RGU development between Q1, Q2, and Q3 is very pleasing. We are now at minus 26,000 RGUs in Q3. Actually, underlying to this, in September, we were at a zero net add balance. The whole loss in Q3 is still coming from July and August.

We have now substantially achieved a stable RGU development. We are hopeful that in Q4, we will see again a much more improved figure on the broadband net add side, clearly showing that the strategy and turnaround is working, that we are executing on the consumer side, and we will continue to push the new portfolio in the market and continue our value strategy. I think also one maybe last word on the B2C. The new product portfolio is offered at higher price points. Previously, our lowest price point on mobile was around EUR 8. Now it is at EUR 10 or EUR 9.95. Actually, we can see that the sales inflow or the cross-adds are exactly the same. We are able to sustain the sales performance despite having increased prices from, or like the entry-level prices from EUR 8 to EUR 10.

The same we see on broadband. Our sales numbers have not decreased despite having aligned prices on both sides and now executing at, let’s say, increased or above increased prices than previously. I think that’s excellent news for the Italian market that there are consumers that value quality and are willing to pay for it. Now, moving on to page number 16. Looking into B2B. We keep managing also the telco top line on the B2C side, growing with IoT, cloud, cloud security, and AI. As mentioned at the beginning of the call, RGU net adds have slowed down a bit because we are reaching sort of the end of TM9 contract ramp-up. We have a bit softer RGU development. Overall, I think a pleasing result on the telecom side.

Also, on the B2B side, we have integrated both product portfolios from Fastweb and Vodafone, offering the best of two worlds now to our customer. All, let’s say, corporate accounts have now been allocated to our internal sales force. Customers have been allocated in the indirect channels. This took a bit more time than on the B2C side because it is more complex to execute. You can see also this is why we have a bit slowdown in growth on the B2B side, as we still were a bit internally focused due to the merger. You can see that the IT service revenue growth is still there at plus 1.5%, but it is a bit lower than it used to be. Here, we intend to accelerate IT growth again going forward next year, as we have now finalized integration.

The sales force is again focused not on what is my account, but actually really selling to the market. We also have signed a new contract with Oracle to offer a sovereign Oracle cloud offering in Italy. As in Switzerland, we have also launched already last quarter our AI Suite for SME companies in Italy, which is a sovereign AI chatbot offering for Italian SMEs. We are very pleased that we have already been able to sell over 10,000 paying subscriptions, also showing that there is a clear market need or demand for this type of services also in Italy. We will continue to work on this going forward. Now, moving on to my last slide about Italy, page number 19, you can see also that the network rollout is continuing in Italy as well. We have now 87% 5G Plus coverage, up 11%.

Fixed rollout or FTTH rollout is also proceeding rapidly in Italy. We now stand at 54% FTTH coverage, with about half of it active and half of it passive in our footprint based on our Fastweb secondary network. We continue to drive wholesale business both on the wireline and mobile. On mobile, we have essentially finished the COP migration onto our network, and this will help us also to compensate part of the post-immobile loss next year. As you might have read in the press, Sky announced the new partnership between Fastweb, Waterfall, and Sky. We will continue to also provide Sky both on wireline and mobile services, which would also help us to compensate some of the post-immobile losses 2026 going forward. Overall, I would say a very pleasing development on the network and wholesale side in Italy.

I will now hand over to Eugen for the detailed financial results. Thank you, Christoph, and good morning, everybody. I’ll start, as usual, on page 19 with the group overview on revenue and EBITDA. Let’s get going with revenue. Revenue is down CHF 242 million in the group, one third of which is currency. Net of currency, the number is minus CHF 153 million. Switzerland down CHF 83 million. Italy down CHF 55 million. If we look at the quarterly dynamics, Switzerland was almost flat in Q3 after a weak Q2. That is due mainly to different timing of hardware revenues this year versus prior year in the IT business. In Italy, it is a bit the other way around. If you look at the quarterly evolution, minus EUR 42 million in Q3 after roughly flat Q1 and Q2. Year-over-year in Q3, we only had a small contribution from IT and hardware.

The telco service revenue decline shows up in the total number. I move on to EBITDA. EBITDA is down CHF 191 million. There were lots of adjustments totaling CHF 73 million. Net net, this essentially boils down to integration costs in Italy on the one hand and to currency. Obviously, the gross numbers are a bit more complicated, and I’ll comment on the gross numbers when I get to Switzerland later on. Obviously, all the numbers, as usual, you will find in the appendix to this presentation. Switzerland, EBITDA almost, if you look at the adjusted number, Switzerland almost stable, with CHF 11 million year-over-year in the first nine months, which is obviously very positive. Also, the quarterly evolution is very stable indeed. On the Italian side, Italy is down CHF 95 million EBITDA. That’s driven by service revenue decline in Q3.

We had minus CHF 30 million after minus CHF 15 million in Q2. The minus CHF 30 million in Q3 are actually much more in line with what you would expect given the service revenue decline than what we saw in Q2. You might remember that in Q2, I flagged that the minus CHF 15 million are not necessarily sustainable. Both Switzerland and Italy EBITDA are in line with our full-year guidance. I move on to page 20, CapEx and operating free cash flow in the group. CapEx is down CHF 174 million, adjusted CHF 171 million. It is driven both by Switzerland and Italy. In both cases, the lower CapEx is due, number one, to phasing, with some of the CapEx yet to come in Q4. Secondly, also in both cases, Switzerland and Italy, some higher CapEx compared to prior year tied to specific large-scale projects in the prior year.

Obviously, apart from the adjusted numbers in the adjustments, you see the integration CapEx in Italy, which starts showing up this quarter. Operating free cash flow, adjusted positive, plus CHF 53 million in Switzerland. It is a stable EBITDA combined with lower CapEx. In Italy, stable operating free cash flow, lower EBITDA, but at the same time, lower CapEx, which we are obviously quite happy about. I move on to page 21 and dive into the Swiss picture, starting with revenue. Revenue is down CHF 83 million, almost stable in Q3. If we look at the individual quarters, B2C is down CHF 29 million. That is lower service revenue and at the same time, somewhat higher handset sales that combined to the minus CHF 29 million. B2B is down CHF 60 million. That is lower service revenue, but also lower hardware revenue in line with our strategy, not too many.

Low or no margin hardware deals and somewhat higher IT service revenues in the first nine months. If you look at the individual quarter, Q3 is a bit of an outlier with plus CHF 8 million. There are actually significant hardware deliveries in connection with one large customer project, all in line with the aforementioned strategy. That drives actually the dynamics between Q2 and Q3. Q2, it was like CHF 27 million lower hardware revenues, and in Q3, CHF 27 million higher hardware revenues. Wholesale is growing CHF 10 million in revenue. That is essentially the growing excess services over the quarter. There are some minor fluctuations around the general trend due to lease plans and roaming, the bit more volatile elements of the wholesale business. EBITDA is stable in Switzerland. Reported slightly up. Adjusted slightly down.

If we look at the adjustments, we have plus CHF 20 million year-over-year in adjustments, positive, in particular in Q3 with plus CHF 33 million. On the one hand, we released provisions for legal proceedings, but on the other hand, we added restructuring provisions and other provisions with a net effect of plus CHF 33 million. If we focus on the adjusted numbers, B2C minus CHF 10 million. B2C was able to compensate part of the service revenue decline with lower direct and indirect costs. In B2B, EBITDA is down CHF 45 million, which is in line basically with the service revenue decline. There was not much impact of the revenue ups and downs that we saw on the upper part of this page because these revenues up there are pretty low margin IT hardware revenues, as I mentioned. The service revenue decline shows up in the.

Margin pretty much one-to-one. Wholesale plus CHF 11 million in line with the revenue growth. Also, infrastructure support functions, that’s mainly a cost position here in EBITDA. That’s CHF 33 million lower cost contributing to the overall cost savings target that Christoph already mentioned. I move on to page 22, deep dive into the Swiss P&L. I’ll start at the bottom left with the telco service revenue evolution. Decline was minus CHF 35 million in the third quarter, so slightly worse than Q2. If you look at the individual components, B2B at minus CHF 18 million is almost identical to Q2 and Q1, so not much news here. B2C is minus CHF 17 million after minus CHF 13 million in Q2. Actually, Wireless in B2C is slightly better than the previous quarter due to increased net adds and also a small effect out of the Bingo price increase and the success of the We Are Family offering.

The only element that is worse compared to the previous quarter is Wireline ARPU. It’s a combination of the fading of the impact of targeted price increases in the prior year and somewhat stronger promotions in Q3. All in all, very small numbers and a very stable general trend in the service revenue. Where does that leave us year-to-date? Top left of the page, year-to-date service revenue decline is CHF 92 million. For the full year, this means that we will land at about minus CHF 120 million. That’s slightly higher than originally guided. You remember we talked about CHF 8,100 million. If you look for drivers of that small deviation in B2B, we had somewhat faster migrations of customers that we knew we would lose, and the migrations came in faster than originally anticipated. On the B2C side, we.

Integrated further roaming into the blue offering, so we have somewhat lower roaming revenues. Also a bit lower demand on streaming on the wireline side. All in all, no big surprises, no big changes by and large as anticipated. Move on to page 23. CapEx is down CHF 71 million in the first nine months, part of which is related to non-recurring items in the prior year. Part of that deviation will probably remain for the full year and contribute to stable free cash flows from Switzerland, all in line with our full-year guidance. Finally, operating free cash flow up CHF 60 million adjusted as a result of almost stable EBITDA and lower CapEx. I move on to Italy, page 24, starting with revenue down EUR 57 million in the first nine months. In the third quarter, we had a decline of EUR 44 million after relatively stable Q1 and Q2.

What’s going on? Let’s look at the segments. B2C is down CHF 73 million in combination of service revenue decline on the one hand, but higher energy revenues on the other hand. The quarterly evolution is pretty stable. B2B is stable in the first nine months. So a combination of telco service revenue compensated by higher IT service revenues and energy revenues. However, in Q3, you see the minus CHF 25 million. There was a more pronounced telco service revenue decline compared to prior year than in the first two quarters. At the same time, this growth in IT service revenues and lower hardware revenues in Q3. I talk about the reasons for the service revenue decline when I get to it on the next page. Finally, wholesale up CHF 18 million, steady growth both in wireless and wireline.

There was some decline in non-core revenue. What you see here is the net of these two elements. EBITDA down CHF 148 million reported, adjusted CHF 99 million. In the adjustments, you have about CHF 40 million of integration cost. That is the main driver of the adjustments year-over-year in the first nine months. If you look at the individual components, contribution margin B2C down CHF 90 million, this is reflecting the impact of the service revenue decline of CHF 117 million on the one hand, and there is more positive contribution from the additional margin from the energy business. However, importantly, if you look at the quarterly evolution, Q3 CHF 20 million after CHF 35 million in the first two quarters, this is for the first time that actually the lower mobile COGS show up.

This is obviously very positive and very pleasing because, as Christoph already mentioned, the migration of our mobile customers onto our own network is in full swing. Already for the first time, it shows up as lower COGS in the contribution margin of B2C. B2B contribution margin down CHF 23 million. That is the margin impact of the telco service revenue decline and some positive margin from the IT and energy business compensating that. Wholesale plus CHF 19 million margin, sorry, the revenue improvement showing up also in the margin. Overall, the minus CHF 99 million adjusted are fully in line with the EBITDA guidance we gave at the beginning of the year. If we deep dive into the P&L on page 25, starting also here with the service revenue decline, bottom left. We had minus CHF 66 million in the third quarter, minus CHF 39 million B2C, minus CHF 27 million B2B.

First, B2C is fairly stable over the quarters, which is very good. Obviously, the operating improvements that Christoph mentioned do not show up yet in the year-over-year numbers, which look backwards, but we are confident they will show up in the next year. Now, what is happening in B2B? In B2B, we had CHF 27 million in Q3 after a very small service revenue decline in Q1 and Q2. It is all down to the wireline revenue. So, wireline, we had significant one-time revenues in Q3 and Q4 in the prior year related to some large-scale public administration projects. The effect that we see here in Q3 on B2B wireline is one that we will also see in Q4 again, and that might even accelerate. As I said, it is a tough comparison because we actually had increasing B2B wireline revenues quarter over quarter in the prior year.

If you look at the performer numbers, and this is all due to these large projects with one-off revenues. For the year-to-date, that leaves us with minus CHF 166 million year-to-date. It is clear that the full-year service revenue decline will be well above CHF 200 million in 2025. What changed, if you remember, we had an original guidance of CHF 100-200 million. We already said in the second quarter that we are trending towards the upper end of that guidance. We will be above that in the full year. What changed is mainly the outlook on B2B. We originally expected to be able to replicate these large-scale projects that we had in Q3 and Q4, and this is now not the case. There is no other structural driver we see at this moment. Is there an impact on the EBITDA guidance? No.

The direct and indirect costs we anticipate for the full year are lower than we had originally anticipated in the guidance. The EBITDA guidance for Italy is fully confirmed despite this deviation. I move on to page 26. Topics in Italy. EUR 83 million below the prior year. That is partly phasing between the quarters, but also partly due to large projects in the prior year. A part of the deviation is likely to remain for the full year. On the adjustments, you see the integration costs showing up. We had integration CapEx of EUR 53 million so far. There is still a lot to come in Q4, but maybe not the full EUR 150 million of CapEx integration costs that we guided for at the beginning of the year. CapEx Italy is clearly trending towards the lower end of the guidance. And finally.

Operating free cash flow in Italy adjusted is stable at minus 2 million with EBITDA below prior year, but so is CapEx. Page 27, quick update on synergies and integration costs. We confirm the 60 million synergy target for the full year, and the plus 36 million, which we had in the first nine months, is fully in line with this expectation. You remember that the synergies are backloaded due to the importance of the envelope synergy that kicks in in Q3 and Q4, and then ramps up to the full run rate next year, as Christoph mentioned before. We also confirm the integration cost target of approximately 200 million. We have in the books 93 million so far for the OpEx, 53 CapEx. So in the end, there might be some shift from CapEx.

To OpEx versus the original split of CHF 50 million OpEx and CHF 150 million CapEx, but the overall number of CHF 200 million for the full year, we confirm. Page 28, free cash flow, stable versus prior year. We are comparing to the reported numbers here, not to performance, stable versus prior year, plus CHF 23 million. Driven by higher operating free cash flow compared to reported last year, plus CHF 160 million on the one hand, and on the other hand, higher interest paid, CHF 127 million, obviously due to the acquisition, and all the other deviations on that page are quite minor. I move on to page 29. Net income. Net income is down CHF 295 million year-over-year with two main drivers. One is the higher interest expense, obviously due to the acquisition.

Secondly, there is a lower EBIT, which is almost entirely driven by the amortization of intangibles out of the purchase price allocation of the acquisition. We also had somewhat lower tax expense this year compared to prior year. I come to the final page, page 30 on the guidance. We do confirm the guidance similar to Q2 with two comments. Number one, based on the numbers we have seen, it should have become clear that on revenue in Switzerland and Italy, and by implication, the group, we trend towards the lower end of the guided range. We may even undershoot slightly, but if we do so with no impact on EBITDA guidance and operating free cash flow guidance.

In a similar vein, as mentioned before, CapEx Italy looks like it will land at the lower end of the guidance or even slightly below and also impacting the group number. Last but not least, we confirm the guidance for dividend of CHF 26, and with that, I hand back to the operator. Yes, thank you. I will give a short introduction how to raise a question if you have a question. To ask questions, please press star 14. I repeat, star 14 on your touchstone telephone. If you wish to withdraw your request to speak, please press star 15. I will now open the lines one by one. As soon as your line is open, you will hear a corresponding text on your line. Please introduce yourself by name and company before asking your question. Now it is time for the first question.

Hi, it’s Paulo Tang at UBS. I just have three questions. The first question is just on Swiss price rises. You recently increased prices on Wingo by CHF 1 a month, but what impact did this have on NPS and churn? Would you consider further price rises on the Wingo brand? My second question is, what is your view on the CH Mobile launch by Sunrise? Do you see it as disruptive to the market? My third question is just about Italian mobile pricing. You increased your front book prices from EUR 8 to more than EUR 10 in September. I appreciate it will take time for these price rises to feed through the subscriber base, but do you think Italian telco revenues can reach stabilization at some point in 2026? Thanks. Thank you. Thank you, Paulo.

I’ll take the question. The Swiss price rises, actually, we were very positively pleased by the execution of the price rise with Wingo. We have seen absolutely no impact on NPS and churn. I think it demonstrates that Wingo is a very strong brand with a very attractive service offering. We executed it as a more-for-more price increase. We included 5G access with the plus one CHF. It was good news that it did not impact NPS and churn on the Wingo brand. I will not comment about further price increases, but it is obviously something that we are looking into to see if there is further room to improve revenue and positioning of the brand. Now, it is also linked to your second question. CH Mobile, honestly, I do not expect a huge impact from this brand going forward.

We already have a lot of low-value brands in the market. I do not really understand the move from Sunrise because it goes contrary to what they actually talk about, moving to a value-based strategy. At the end, honestly, I think everybody will just end up with the same number of RGUs, but with slightly lower revenues. It is not really good news for the market because it kind of creates more downward pressure in the market, especially if you look at the mid. Not really, I am not so worried about the premium segment, but if you look at the mid-market piece, obviously, the more rounded the brand space is in the lower-end budget segment, the more downward pressure you have also in the mid-segment. We will see a bit how this evolves now over time. It is clearly, let us say, not a move that.

Goes into, let’s say, a price rebound direction in the Swiss market. We will see also a bit how it’s going with the Black Friday promotions in the coming weeks. We will see over the next year if there is any impact from this CH Mobile brand. Now, on the Italian side, the goal is definitely to stabilize service revenue, both in B2C and B2B in the midterm. This will take some time, but we are working very hard on it. Actually, price increases, we executed price increases twice. First, we went to EUR 9 and now to EUR 10. We have quite a good view on at least the EUR 9 move, which did not impact sales numbers so far. I think also now the front book prices, I think, are at a good level.

We are actually executing what we call backbook-front book alignment now. All the backbook customers which are below our front book prices, we are now elevating them onto the front book level to have a completely inline portfolio. This is currently being executed over the next weeks. We started a couple of weeks ago. So far, numbers look okay as well. We feel it is an important action so that all customers are actually treated in a transparent and fair way. Everybody pays what we are now selling on the front book side. This will obviously also help us improve service revenue next year going forward, as this is a price increase for a couple or like a part of the customer base. Clear. Thanks. At the moment, we only have one more question. Due to this, I will.

Tell how to ask a question. If you want to ask a question, please press star 14 on your touchstone telephone. Now I will open the line for the next question. Hi there, it’s Josh Mills at BNP Paribas. I had a couple of questions, please. The first was just related to the Swiss service revenue trend. You said in your comments that part of the reason that you saw a deterioration from 2.4% to 2.6% negative growth this quarter was you had a bit more migration to some of the B2B packages and also some more roaming revenues dropping out as you move to the blue bundles. It sounds like this is a revenue headwind you’ve been anticipating, but just one that’s coming through a bit earlier than expected. If that’s the case, do you think that you’ll start to see an improvement.

In service revenue trends into the end of this year and into 2026? Or are there other factors to consider which mean that we might see a continuation of the service revenue declines? That is the first question. And then the second question was just around the cost cutting that you lay out on slide 12. I think you are making it clear not to extrapolate the same level of savings into 2020, sorry, into Q4, as we saw in Q3. But why is it that these savings are coming in quicker than expected? And why would there not be more outside of the CHF 50 million target you laid out at the start of the year? Thank you. Okay, thanks, Josh. I will take the first question. Maybe I was not super clear in my presentation, so I will try to repeat. There are two different elements to talk about.

The one I’ve talked about first is the Q3 service revenue decline. Compared to Q2, because it looks like a bit of an acceleration. Actually, on B2B, there is no acceleration whatsoever. It’s minus 18 after minus 18 in Q2. The only change is in B2C, the minus 17 versus the minus 13. There I commented that Wireless is actually slightly better. The difference that you see between the two quarters comes from Wireline Apple because of some targeted price increases we had in the prior year, the impact of which is now fading out, and some stronger promotions in Q3. B2B doesn’t play a role in this quarter-over-quarter evolution. It’s merely B2C, and here it’s Wireline Apple, nothing else. That’s the one element. Then I talked about the full-year outlook.

Where I said about a CHF 120 million service revenue decline is what we expect. I compared that to the roughly CHF 100 million service revenue decline we guided for at the start of the year. Here, actually, there is a B2B element in that deviation because we lost some customers in the B2B Wireline on the corporate side, which we already knew at the start of the year. The migration of their locations went a bit faster than we anticipated, and this led to a slightly higher service revenue decline on the B2B side than anticipated. That is the B2B story. There is no Q-over-Q B2B story. Having said that, these are all super small numbers, just to be clear. We guided for about CHF 100 million, which you can read anywhere you like, but it could also include CHF 120 million.

We just wanted to be super transparent why we expect the roughly CHF 120 million now. Is there any impact out of these small changes that I’m commenting here on the midterm outlook? No, I would not read too much into it. Obviously, we are going to talk about the service revenue decline expectation for 2026 in February, but we do not see any fundamental shift. I just tried to explain the change from about CHF 100 million to CHF 120 million on the one hand and tried to explain the super small change from minus CHF 13 million to minus CHF 17 million on the B2C side between Q2 and Q3. I hope I was clearer now the second time. If not, feel free to follow up. On the cost savings side, I always, and I am repeating myself on that topic, the cost savings do not come in steadily quarter over quarter in the same number.

That’s not realistic. The numbers we are talking about is, at the moment, an annual impact of CHF 50 million plus, which is not a huge number given the overall cost base we have. Small changes in quarters can drive a lot of the change. It’s always important to look at the final year figure, what we achieve for the full year, and I would not read too much into quarterly fluctuations. Thanks. That’s very helpful. I mean, yeah, just to follow up on the first answer, should we read that as you don’t see any big change in trends for service revenue development and declines in 2026 versus the current run rates? Is that what you meant by no big change in trends? I mean, you’re repeating that. No, I think I was clear. We don’t see any structural changes out of the things we commented on.

You can draw your own conclusions when it comes to 2026 and with regards to 26 in February. Got it. Thank you. There is one more question, and I will open the line for the next question. Yeah, that is Robert Grindolf from Deutsche Bank. Thank you. I saw you bought a B2B video services company in August. The deal is yet to complete, I believe. Is this part of a wider push into security? Could you also provide B2C security products like one of your competitors? Do you see other adjacent opportunities in the market? My second question is, how would you describe the mood of the typical Swiss enterprise at the moment? You had all that trade talk volatility during the summer. Has that effect sort of evened out now, or are enterprise customers still holding back on their ICT projects? Thank you. Thank you, Robert.

I think the B2B video merger you’re alluding to is a really small acquisition that I think we did last year, if I’m not mistaken. I think now we have separated it out into another entity, and we merged with some of our existing capabilities on the Swisscom Broadcast side. It’s really, let’s say, a minor business. We’re talking about very low double-digit millions. It’s not substantially impacting our overall numbers in Switzerland. Swisscom Broadcast, which is one of our subsidiaries, is actually quite active in the whole surveillance aspect with cameras, but also drone surveillance, which is, let’s say, a growing area. We do see some opportunities for growth on that side. It’s growing, but not in a way that it would meaningfully impact our overall Swiss numbers, unfortunately.

Of course, I mean, there are a number of other adjacencies. I think the most important ones are really sort of AI-related opportunities on the B2B side. We are pushing very heavily in providing AI consultancy, AI infrastructure services, AI chatbots, and really trying to monetize the AI implementation in the B2B space. I think that’s one important adjacency. The second one is really all around security, which is driven by our traditional security offerings, but also the BEAM offering, which is this completely integrated connectivity and security offering where we really want to monetize and capitalize on the opportunity of the growing cybersecurity needs of B2B customers. I think those should provide also meaningful numbers going forward. Now, having said that, the general mood of B2B in Switzerland is a bit damped, I would say.

Switzerland is quite heavily impacted by the tariff situation with the U.S., especially on the machinery and the industrial side. It’s quite gloomy, I would say, and customers are heavily saving money. Obviously, not all sectors are impacted in the same way. More domestic services companies are not impacted at all. On that side, we are okay. The more export-oriented industries are quite heavily impacted. Overall, I would say there is a slowdown on the B2B side. It’s not like to worry about. I think it’s not that bad, but it’s not helping us create more growth on the IT side, as many companies are now scaling back a bit on their investment envelopes. Got it. Thank you. Since we have no more questions left, I will hand over back to Louis for the concluding comments. Thank you very much.

With that, I would like to conclude today’s conference call. In case of any follow-up questions, do not hesitate to contact us from the IR team. Speak to you soon and have a nice day. Thank you.

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