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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.

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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

2. Swisscom's 2025 Results: Stable Performance and Strategic Progress

Swisscom reported revenue of CHF 15.048 billion for 2025, a decline of CHF 310 million year-over-year, with CHF 105 million due to currency effects. EBITDAaL was CHF 4.984 billion, down CHF 100 million on an adjusted basis. Earnings per share (EPS) was CHF 5.28, beating analyst estimates of CHF 4.38. Operating free cash flow was stable in both Switzerland and Italy, a positive development in a transition year.

Publication Date: Feb -18

📋 Highlights
  • Dividend Increase & Credit Rating:: Swisscom raised its dividend by 18% to CHF 26/share while maintaining an A2 credit rating.
  • Brand & Operational Excellence in Switzerland:: Achieved top telco brand status, won all service tests, and launched B2B portfolio <i>beem</i>.
  • Italy Integration Synergies:: Vodafone Italia synergy realization overachieved by EUR 95M in 2025, with EUR 600M target by 2029.
  • Infrastructure Expansion:: Targeted 60% FTTH coverage in Switzerland and 65% in Italy by 2025, with 91% 5G+ coverage in both regions.
  • Free Cash Flow Stability:: Delivered CHF 1.4B operating free cash flow in 2025, with guidance for CHF 2B in 2026 despite integration costs.

Segment Performance

In Switzerland, revenue was down CHF 108 million, mainly due to lower telco service revenues. EBITDA was down CHF 27 million on an adjusted basis, with cost savings partly compensating for the decline. In Italy, revenue was down EUR 81 million, with a strong growth in wholesale. EBITDA was down EUR 57 million on an adjusted basis, with synergies ramping up, particularly in Q3 and Q4.

Synergy Realization and Integration

Swisscom achieved significant progress in synergy realization from the Vodafone acquisition, with EUR 95 million realized in 2025, exceeding the EUR 60 million target. The total run-rate synergy expected is EUR 600 million, and total integration costs over the first three years are EUR 700 million. As Christoph Aeschlimann mentioned, the company is working to integrate two big companies, focusing on a single culture and future-proof operating model.

Valuation Metrics

Swisscom's current P/E Ratio is 28.83, indicating a relatively high valuation. The Dividend Yield is 3.11%, which is attractive for income investors. The EV/EBITDA ratio is 6.06, suggesting a reasonable valuation compared to EBITDA. With a Net Debt / EBITDA ratio of 0.52, Swisscom's debt position appears manageable.

Guidance and Outlook

Swisscom guided for revenue of CHF 14.7-14.9 billion in 2026, with EBITDA of CHF 5.0-5.1 billion. Operating free cash flow is expected to be CHF 2 billion, up CHF 100 million year-over-year. The company remains committed to rock-solid financials, focusing on long-term value creation and attractive dividend.

3. NewsRoom

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Assessing Swisscom (SWX:SCMN) Valuation After A Strong Multi‑Year Shareholder Return Run

Mar -08

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Qualcomm leads new 6G coalition

Mar -04

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Qualcomm and Other Industry Leaders Commit to 6G Trajectory Towards Commercialization Starting from 2029 Onwards

Mar -02

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Swisscom AG (SCMWY) Full Year 2025 Earnings Call Highlights: Dividend Boost and Strategic ...

Feb -19

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Swisscom (SCMWY) Upgraded to Buy: What Does It Mean for the Stock?

Feb -18

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Swisscom's (VTX:SCMN) Upcoming Dividend Will Be Larger Than Last Year's

Feb -15

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Deutsche Bank appointed as Successor Depositary Bank for the American Depositary Receipt Program of Swisscom AG

Jan -30

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Telecom Italia, Fastweb eye 5G cost savings with Italy's network deal, sources say

Jan -06

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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

Strength

Weaknesses

Opportunities

Threats

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

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Orange

A-Score: 7.2/10

Value: 6.2

Growth: 3.9

Quality: 4.4

Yield: 9.4

Momentum: 9.5

Volatility: 10.0

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AT&T

A-Score: 7.0/10

Value: 7.5

Growth: 2.6

Quality: 5.5

Yield: 9.0

Momentum: 8.0

Volatility: 9.7

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Verizon

A-Score: 6.9/10

Value: 8.0

Growth: 3.1

Quality: 5.8

Yield: 10.0

Momentum: 4.5

Volatility: 10.0

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Orange Polska

A-Score: 6.7/10

Value: 7.1

Growth: 4.1

Quality: 4.6

Yield: 8.1

Momentum: 8.0

Volatility: 8.3

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Swisscom

A-Score: 6.1/10

Value: 4.6

Growth: 2.7

Quality: 5.1

Yield: 6.9

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Vodafone

A-Score: 6.1/10

Value: 9.0

Growth: 1.2

Quality: 2.1

Yield: 8.1

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

717.5$

Current Price

717.5$

Potential

-0.00%

Expected Cash-Flows