Good morning, ladies and gentlemen, and thank you for joining the Swisscom 2021 half-year results conference call presented by Urs Schaeppi, Eugen Stermetz, and Louis Schmid. Louis, the floor is yours. Good morning, ladies and gentlemen, also from our side, and welcome to Swisscom's Q2 2021 results presentation. My name is Louis Schmid, Head of Investor Relations, and with me are our CEO, Urs Schaeppi, and Eugen Stermetz, our Chief Financial Officer. The first part of today's analyst and investor presentation hosted by our CEO consists of two chapters. Chapter one, a quick overview with some highlights, the operational performance, and financial results of Q2. Chapter two, an update on our network activities, B2C and B2B operations, and financial results in Switzerland, and Fastweb's Q2 results, operationally and financially. In the second part of today's presentation, Eugen runs you through chapter three, the Q2 financial results, and the new EBITDA guidance for the full year 2021. With that, I would like to hand over to Urs to start his part. Urs? Good morning, ladies and gentlemen. I would like to start with some highlights. If you go on slide four, you see some highlights in Q2. We proved once more that we are the leading operator in Switzerland. We won numerous test wins on mobile, but also on the customer service side. As an example, the speed award of Ookla or the service tests of PCtipp. This shows that we are executing on our strategy. In the B2B market, we were able to improve our product portfolio or our value proposition to have a more differentiated value proposition. In Italy, one more quarter with growth, a solid momentum. On sustainability, ESG, we are committed to it, and we have a track record, and we have also the awareness in the whole world that we are a sustainable company. On guidance, we slightly increased our EBITDA guidance because of a better momentum on the operational side, but also one-offs on a non-cash one-offs. If you go on slide five, our Q2 performance, market performance. If you look it from a wide side, you see that we are stable in the wireline business. TV, broadband, approximately stable. I will come later to it, also better churn figures. If you look to mobile, you see that we have a slightly increasing net adds on mobile in Switzerland. What is important to mention is that there were some effects in first quarter, special effects of phase out of a product on wireline or for the Casa product, which leads to a weaker performance in Q1 and also to 2G switch off on mobile. You see that Q2 is better from market performance than Q1. Fastweb, a good momentum. Slightly positive figures on broadband on Q2 and also a good growth momentum on mobile. On the bottom of the chart, you see our market shares. Also important to mention is the converged part of market share. 46% of our broadband connections are in a converged offers and 42% of the mobile offers are in converged offers. In Italy, converged offers is at 36%. I mention this because the converged part of the product portfolio has a higher loyalability, normally better ARPU and lower churns. If we go on slide six, you see our financial performance. A growth on EBITDA, growth also on the revenue and also on the net income, and as a result, also on the operating free cash flow proxy. You see on the right side of the chart, the EBITDA development Q2 compared to previous year. Swisscom Switzerland was able to increase the EBITDA by CHF 31 million. Fastweb has a growth of CHF 10 million. Overall, we have an increasing EBITDA. Good operational performance. On the bottom of the chart, you see also that the operating free cash flow went up by 24%. On an absolute base, it's CHF 574 million operating free cash flow proxy. Good and strong financial figures. If you go on slide eight. Here you can see our business priorities. They are unchanged. We are delivering what we actually announced. We are continuously investing in our infrastructure to improve the network quality, to improve the coverage or extend the coverage of our offers on mobile, but also on fiber to the home or ultra broadband. Second pillar or second priority is delivering on our leading market position in Switzerland. I will come later to it. The market performance shows that we are able to deliver what we promised. Operational excellence. We are committed to operational excellence, we are on the way to deliver the ambition of over CHF 100 million cost savings this year. Also Fastweb. Fastweb is growing in the Italian very competitive market. If we go on slide 9. Some remarks to our investments. You see that we are continuously investing in our networks. It's a CHF 2.2 billion-CHF 2.3 billion in CapEx, which we have. It shows that we deliver and that we are improving. We won several net tests on mobile. You see here the results. You see also that we are clearly ahead on this topic on the coverage side, but also on the speed side. Our networks are certainly the leading mobile networks in Switzerland. On internet, you see also that we are performing. The impressive is to have also a look to the right side of this chart. There you see the coverage on mobile on these different technologies. On LTE, we have a population coverage, which is at 99% plus. We have a 5G coverage of the base version with dynamic spectrum sharing, where we have 98%. An increase of the footprint of 2% points on a year-on-year base. On this 5G FAST or 5G Plus, as we call it, that's the technique where we use also the 3.5 gigahertz spectrum. We have now a coverage of 27%, and we increased the footprint by 7% point on a year-on-year base. On the bottom of the chart, you see the coverage on our ultra broadband. 86% has more than 80 megabits. 86% of the households have more than 80 Mbps speed. 68% has more than 200 Mbps, and 33% on fiber to the home, they have speeds from 1 Gbps to 10 Gbps. These footprints, you see it also, they are increasing steadily and will continue so that we can achieve our goal to have 60% fiber to the home coverage in 2025. On page 10, some remarks to our products portfolio in the B2C market. We made several developments or several improvements. We improved our broadband offer. We refreshed our inOne offer. That's the hero product, the main product. We refresh it, we gave more speed. We put more speed in it. Also on FMC, we improved a bit our benefit for our fixed mobile converged offer. On customer satisfaction, we had some small innovations, but which are important. As an example, a mobile call filter so that you get less spam. Then also with our attacker brand, Wingo, the second brand, we have a good momentum. If you go on slide 11, some remarks to our operational results in the B2C market. We have robust KPIs. The wireline, you see on the top, the wireline KPIs, so approximately stable ARPUs on broadband and TV. Important to mention is that our second and third brand share in wireline is at 5%. The inOne penetration is 80%. The churn figures are lower than in Q1. This has also a bit of seasonality in it, but some special effect, phase out effect from Q1 as I explained. We are back at ordinary levels. We have a churn in broadband of 9%. ARPU, you see that our ARPU figures are stable on a wireline blended but also wireline bundle, stable market shares. On wireless, also the ARPU, they are slightly growing. The second and third brand share is at 20%, slightly growing. The churn figures are lower than in Q1 on the FMC part at 7.2%, on a low level. On postpaid at 8%. The ARPU postpaid, you see it's at CHF 54, the ARPU. It's on year base CHF 2 lower. The main reason here is the ARPU mix, the dilution of more second and third brands. Overall, Q1 to Q2, a stable ARPU. Overall, robust operational figures. If you go on page 12 to our B2B market and our market positioning. Here, just two example. What we are doing to further differentiate us in the B2B market, where we have already by far the most differentiated product portfolio. As an example, in the SME market on the right side of this chart, you see that we are continuously improving our security portfolio. Swisscom is the most advanced operator. This gives you also external reports on the security proposition which we have. We extend now also the security proposition for our SMEs. With cybersecurity, that's a constant uphill battle, and especially also for our SME customers. That's why we are investing in such a broad value proposition in the SME market. We have a portfolio of managed security services, managed backup services. We are doing security assessments, and we will further enlarge our product portfolio with other security services for, as an example, phishing. If we go on slide 13, the B2B results. Overall, a slightly softer service revenue due to price pressure. On the other side, a growing solution business, so growing IT business. You do see the service revenue development. We had a CHF 21 million lower service revenue in Q2. Price driven. Again, we'll come to it later, what are the major factors behind it, but it's strongly driven by mobile. Solution business, a slight growth in the solution business. On the top you see in which area. Cloud is developing well, security is developing well. Some growth on workplace and on SAP. Overall, a good performance in the B2B market. If you go on slide 14, our cost initiatives. You see that we are on track to achieve our cost target 2021. We have savings in the first half year of CHF 67 million. Our ambition for savings above CHF 100 million, there we are on track. On slide 15, financial results of Swisscom Switzerland. Overall, slightly increased net revenue with different dynamics. Solution revenues, hardware revenues, wholesale revenues went up. There's the pressure on the service revenue, which is driven by price. This CHF -89 million price-driven reduction on the service revenue. EBITDA went up by approximately 1%, at CHF 0.8 billion. Also you see the operating free cash flow proxy from the first half year is at CHF 927 million. Overall good with financial results in Swisscom Switzerland. On Fastweb, on page 16, our network and commercial update. On the product side, we launched the new Internet box, which is a high-performing box with a good usability, with nice feature in it. As an example, Alexa. That's a differentiated Internet box, which will keep our customers more loyal. On the sustainability side, you can also see that Fastweb is investing in sustainability and is recognized as really a sustainable company. As an example, Financial Times ranked Fastweb as a climate leader. On 5G and fixed wireless access. Our ambition to roll out these networks to increase the footprint is on track. We plan to enter the enterprise market with mobile, with 5G mobile in the second half of this year. On page 17, the consumer performance of Fastweb, so solid performance. Important to mention is the share or the penetration of our ultra-broadband customers. They went up by 16%. That's important because ultra-broadband customers are more loyal and have also a higher ARPU. On mobile, you can see that we have also a nice growth, 20% subscriber growth. Churn went down by 12%. Data usage is increasing. On the converged area, on the right side of the chart, you see that there is an uplift. If we get customers on a converged offer, we have an uplift of 26% on ARPU. A churn benefit where we have a much lower churn figures. The penetration of converged offer is at 36%. On page 18, Fastweb on the enterprise and wholesale market segment. Continuous growth. Revenue went up by 9% on enterprise and on wholesale by 21%. In wholesale, it's mainly driven by EUR-related revenues. On page 19, Fastweb financial results. Fastweb, they are in line with our guidance. The revenue, net revenue went up by 7%. EBITDA went up by 5%, and operating free cash flow is at CHF 56 million. Good financial performance in Italy. Now I would like to hand over to Eugen for the financial results. Many thanks, Urs, good morning everybody also from my side. I move on to page 21, starting with an overview over group revenue development. Group revenue in the first half of the year is up by CHF 140 million. Underlying performance out of this is plus CHF 107, contributing both Swisscom Switzerland and Fastweb. Switzerland up by CHF 19 million and Fastweb up by CHF 81. As Urs already mentioned, the revenue growth at Fastweb of CHF 81 million had contributions from all three segments: consumer segment, enterprise segment, and wholesale. Obviously, percentage-wise, enterprise and wholesale with much stronger growth than the consumer segment, which still grew, but grew with 2% in the first half of the year. Over to Swisscom Switzerland. Contributions to revenue growth from the B2C segment. It's the usual mix of, on the one hand, service revenue decline. On the other hand, the decoupling effect we're going to talk about in a second, and strong hardware sales, particularly in the first quarter. If we look at quarter-over-quarter numbers, CHF 25 million in Q2, CHF 10 million in Q1. The difference is mainly the service revenue decline easing in the second quarter. We'll talk about service revenue on the next page. B2B, CHF 20 million down revenue. Mix of service revenue decline and solutions increase with a net impact of CHF -20 million. On wholesale and the segment infrastructure and support functions, not much news in the second quarter. I move on to page 22. I'd like to spend some time on this one because it's important to understand this page in order to understand what is going on and in order also to look forward what might come in the next couple of quarters. I'll start on the left-hand page with the drivers behind the first half of the year revenue in Switzerland. You know the major components. I'll run you quickly through them for the first half of the year. There is service revenue decline of CHF 89 million, with B2C and B2B contributing. In absolute numbers, B2B contribution higher in percentage terms as already in the past. B2B with a stronger decline of -4.4%. Overall, Swisscom Switzerland, - 3.1% service revenue decline. Compensating for that, to some extent, plus CHF 50 million is the famous device decoupling effect and IFRS 15 reconciliation line that by now most of you know well. That's an effect that we had over the last two years or so. Important to note, this effect is about to run out. This will be the last quarter where you have any significant effect out of this, and this is also an important information looking ahead because this compensating factor that we had over the last two years or so will not be around starting from the first quarter. There might always be a small number here and there resulting from dynamics in promotions and resulting in IFRS 15 reconciliation. The big effect of our subsidized subscriptions, mobile subscriptions from two years ago has run its course. Next line, solutions up. That's nice and expected. On hardware sale, wholesale, and others, there is not much news compared to the first quarter. Most of what you see here was already here in the first quarter, so I'm not going to comment in detail. I'd now like to move on to the right bottom side of the page, where we show you, as usual, the main drivers behind the service revenue decline of the second quarter. In the second quarter, service revenue decline was only CHF 38 million, and I'll walk you through the drivers of those CHF -30 million. Beginning at the bottom left, wireline B2C fixed voice lines, CHF -5 million. That's the usual suspect that has been around for a while and will be around for a while. It's a mix of single voice lines running out, but also, and ever more importantly, opt-outs of voice lines out of bundles. That's a pretty stable number, fixed voice line losses. Next one, B2C wireline change in ARPU mix, CHF 3 million up. That's very nice. This is up if you compare it also to the second quarter of last year when it was -12. That is good news. We've talked about the stable ARPU or even increasing ARPU in B2C wireline. We had some heavy promotions out there in the first half of last year. We found that once the promotions run out, many customers do not downgrade to a lower ARPU, which is very good news because it means that the customers take the benefit of the promotion, but once they get used to the product and its quality, they are also willing to pay up for it. That's certainly good news. On to the next column, B2B, price pressure. There, I would say we are kind of back to normal. Those of you who remember in the 1st quarter, this was in -3 only, and now we are at CHF -12 million. That effectively means that the COVID tailwinds of traffic revenue that we talked about in the first quarter, which have been with us for something like second quarter of last year to first quarter of this year, this effect has run its course, and we are back to a more normal figure of B2B wireline service revenue decline. It gave us a bit of a lift in the first quarter and maybe first months of the second quarter. Now this effect seems to be over for the moment, at least. Moving on to wireless, starting with B2C, change in ARPU mix. That's the usual suspect. Eugen has mentioned it. It's the usual mix of, in particular, brand shift, customers moving from the Swisscom brand onto second and third brands. Promotions, prepaid losses, this whole mix of ARPU pressure on the B2C wireless side. In the first quarter, the number was a bit bigger for a couple of reasons, none of them particularly structural. The truth going forward is probably between this number of CHF 12 million and the CHF - 23 million of the first quarter. Next line, also well-known, fixed-mobile convergence, CHF 5 million. That effect has come down over time, as the curve of convergence adoption flattens out over time. Just to remember, last year, this number was around min CHF -9 million, CHF -10 million. Now it's more around CHF -5 million. That is an effect that has come down over time. An interesting one, onto roaming. We talked about roaming effects for the last couple of quarters due to COVID. We are now comparing for the first time in the whole COVID saga, a full COVID quarter to a full COVID quarter in the previous year. There is not much of a roaming effect anymore. Actually, the roaming effect has turned slightly positive, but it's plus minus zero in the second quarter of this year. As you remember, this was a significant negative effect over the last couple of quarters, because we still compared with pre-COVID quarters, and that effect has gone now and has an influence on the dynamics I'll talk about in a second. B2B price pressure, unfortunately, as usual in the wireless segment, not much news on that one. These are the major components. I'll move up to the top right part of the page where we show service revenue dynamics over the last six quarters. I'd like to spend a word on this one. At first sight, you might be tempted to see an upward moving trend and somehow draw a line from the CHF -85 in the second quarter of last year, up to the CHF -38 in the second quarter of this year, and then maybe further ahead. I would caution you not to do so. We did a little analysis and stripped out the roaming effects out of that number, and this is the small line that you have below the chart. If you look at this line, you see that service revenue decline in the last couple of quarters was actually net of the roaming effect, a pretty stable number, around CHF 40 million, maybe CHF 50 million in the third quarter of last year, but around CHF 40 million in the last three quarters or so. Net of roaming, we're in a pretty stable situation and certainly not in one where service revenue decline would further ease. Quite to the contrary, looking ahead, we do expect an acceleration of service revenue decline starting from the -CHF 38 million level that we saw in the second quarter. I'll walk you through our reasoning. First of all, there are things that will not change. Fixed-mobile convergence, not going to change. Voice line loss, not going to change. Roaming, whatever the COVID situation will be in detail, roaming, probably no impact on service revenue dynamics in the upcoming quarters. We do expect increased service revenue pressure on the by-line B2C side. We will see what UPC Sunrise is going to do in the second half of the year. You saw that there is certainly no major positive impact coming from net adds to service revenue in that regard. We'll also have some promotions out there. We do expect service revenue pressure B2C by-line. Also on the B2B by-line side, we had obviously some visibility on large accounts, we do expect increased pressure on the B2B by-line side. We would caution you not to simply take the CHF 38 million and assume it will stay the same. In our view and in our best estimate, service revenue decline will increase, or get worse, to be precise, in the second half of the year. Okay. Much on service revenue dynamics, and I'll move on a bit faster, but it was important to spend some time on this one. I'll go to page 23, group EBITDA. EBITDA is up in the group by CHF 109 million. Important to note, CHF 49 million out of those CHF 109 in the 1st half of the year are exceptional effects. The most important one is an exceptional effect coming out of a change in our pension plan. That change in our pension plan had a positive impact of CHF 60 million non-cash that we booked in the second quarter of this year. Obviously, we show it as an exceptional item. There is ethics adjustments that we talked about already in the first quarter. On the negative side, we had an increased provision for regulatory topics, and we noted also that effect under exceptionals. Net of exceptionals, an underlying increase of EBITDA of CHF 60 million, CHF 20 million out of which Fastweb's CHF 20 million EBITDA increase in line with expectations and communication, plus 5% in the first half of the year. Also Swisscom Switzerland up by CHF 38 million underlying performance in EBITDA. If you look at the segments, the EBITDA development also quarter-over-quarter basically follows or mirrors the revenue development that we talked about before. In the infrastructure and support function column, the plus CHF 25 million you see reflects the cost savings we had in the first half of the year, and I'll talk about those also on the next page. Quarter-over-quarter, we have a certain seasonality in personnel expenses due to vacation accruals, et cetera. I wouldn't worry too much about quarter-to-quarter numbers. The important thing is, and we come to that on the next page, that we are on track to our CHF 100 million cost-saving targets for the full year. I'll move on to page 24, where we explain the Swisscom Switzerland underlying EBITDA performance, not by segment, but by P&L line item. We talked about revenue plus CHF 19 million. Direct costs, CHF -48 million, driven by SAC, SRC outpayments and COGS. Not much news on SAC, SRC and outpayments. If you look at quarter-to-quarter numbers. On COGS, there is a certain variation between the first quarter and the second quarter. It's simply driven by different hardware sales dynamics in B2C and B2B in the first and second quarter. The most important topic on this page is obviously the indirect cost column. We are up, or rather down, with indirect costs, with a positive effect on EBITDA of plus CHF 67 million, CHF 70 million out of which personnel expense workforce, and CHF 50 million of other OpEx. Some seasonality in the personnel expense, which I mentioned before. Vacation accruals quarter-over-quarter. We had very low vacations in the first quarter because nobody wanted to take vacations during lockdown. That has adjusted itself to a more normal level now, and we are well on track to our cost savings target of CHF 100 million for the full year. Moving on to page 25. CapEx. CapEx is broadly in line with guidance, maybe a bit below the expected run rate in Switzerland, but we expect this to catch up for the remainder of the year. Another note, there is no impact yet of the Salt deal for those of you who ask the question. The Salt deal will not impact our numbers anytime before end of Q3, with the main impact coming in Q4. No impact from that side. Finally, the third note, fiber rollout CapEx is as it was and as expected at about one third of our total CapEx. Maybe slightly behind expectations, but as I said, expected to catch up in the second half of the year. Moving on to page 26, free cash flow. I start from operating free cash flow proxy, where we are CHF 100 million ahead of last year. If you look at the rightmost column, free cash flow, we are CHF 150 million down over last year. What happens in between? There are two main effects to talk about. One is the pension adjustment that I mentioned before. We had this extraordinary non-cash benefit of CHF 60 million in EBITDA in our pension expense. That's an accrual item. Our pension contributions in cash are still the same. They are CHF 138 million in the first half of the year. You have all the details on page 34. Our non-cash pension expense came down from CHF 160 million to CHF 100 million. That's a one-off exceptional item. Contrary to the normal situation, our cash pension payments are higher than our accrued pension costs, and that gives us a negative impact in the free cash flow statement of CHF -36. In the last year, it was the normal situation, the other way around, a positive impact of plus CHF 29. The CHF -65 is a year-over-year effect out of this change. Nothing operating in there. The second effect that contributes to the change between operating free cash flow costs and free cash flow is out of income taxes. We paid more income taxes in the first half of the year than in the first half of last year. That's cash tax paid, has nothing to do with the tax expense. The simple reason for that is that last year we delayed some of the payments in around March, April last year, when nobody knew how the whole COVID situation would develop on the capital markets. We are back to normal here, and that is a negative impact of CHF -73. Net working capital, nothing out of the ordinary. As I mentioned, certainly no Salt effect yet. As you might remember, starting next year, already second half of this year, we will have a structural net working capital effect negative out of the Salt deal, but it's not there yet. I move on to page 27. Net income bridge, starting with EBIT. EBIT is CHF 106 million up compared to last year. Net income is CHF 300 million up compared to last year. What's happening in between? We talked about it in the first quarter, and it's mainly effects out of the first quarter. We sold a participation in Belgacom International Carrier Services in the first quarter, and we swapped our Flash Fiber participation in Italy into a stake in FiberCop, and that led to an extraordinary effect in the financial result of about CHF 220 million over all the M&A effects. That's the main driver. Compensating for that to some extent is that we have higher tax expense for the simple reason that we do have a higher earnings before tax. The tax rate of 16.1% is not indicative of what you should expect in the normal course of events, which is closer to 19%. Moving on to page 28, a quick look at the financial structure. Issued a CHF 100 million bond in the second quarter. It was our first green Swiss franc bond. We had a green bond issuance of EUR 500 million on the Eurobond market last year, which was very well received. Also this first green bond in Switzerland was extremely well received. You see the financial terms we could achieve with 25 basis points of interest rate for a 12-year bond. That's exceptional, even compared to our own very good yield curve. It was very nice to see that our long-term efforts in the area of sustainability, and in particular in the area of environmental part of sustainability, were very well received by the capital markets once more. Our overall debt maturity profile on the right-hand side page, very healthy. Average interest rate of 93 basis points, certainly very attractive. I come to page 29, outlook guidance. Guidance on revenue. First of all, guidance on revenue is unchanged, and guidance on CapEx is unchanged. We do change our EBITDA guidance from CHF 4.3 billion-CHF 4.4 billion that we had so far, up to CHF 4.4 billion-CHF 4.5 billion. The only reason is from Swisscom Switzerland. The main items for this upgrade in the guidance are as follows. Number one, exceptionals. You saw the exceptional figures that we reported. We'll have about CHF 38 million of exceptionals. We don't account for the currency effect in here because we mentioned the currency effect already in the first quarter guidance. Without currency effects, CHF 38 million exceptionals. Point number one. Point number two, some of you might have spotted that the decoupling effect that we have already guided for already in February came in a bit stronger than expected, about CHF 10 million more than we guided. That's the second effect. The remainder comes from the over-performance in the second quarter in service revenue, CHF 20 million-CHF 30 million. These three factors combined lead to our upgrade in the guidance. Why still the range? There is still some significant uncertainty around some of the items here. We talked about service revenue development in the second half of the year and competitive dynamics in Switzerland, which is still a bit of an unknown. Also, the implementation of the Salt agreement needs to be done. That's why we give you a range. Even if it takes a minute, I would like to walk you through, step by step, the guidance starting from EBITDA last year, as we did in February, just for those of you who want to make the bridge from EBITDA last year to this new guidance. It's a couple of steps, I think it's worthwhile. Compared to EBITDA last year, the major effects leading to the new guidance are service revenue CHF -200 million to CHF -250 million compared to last year. Decoupling effect, plus CHF 50 million already in, as you saw. Indirect cost savings in excess of CHF 100 million. MVNO loss from UPC Sunrise that we guided already for in February, CHF -20 million. Compensating for that, positive effects out of the Salt deal, plus CHF 20 million. That's the main effects on the Swisscom side. Fastweb, as before, plus CHF 50 million EBITDA impact. This gives you Swisscom overall a zero impact compared to last year. Plus, and that's now the important part, plus the exceptionals, the CHF 38 million I mentioned, CHF 20 million of FX, and this gives you the total bridge from EBITDA last year to the new guidance. Final word on the guidance. For those of you who make the quick calculation from EBITDA first half of the year to EBITDA of the full year, please be aware of the following facts. Number one, service revenue dynamics in the second half of the year that I discussed. Number two, end of decoupling effect. Don't forget that. That will not be around in the second half of the year. Finally, some seasonality in indirect costs that might change a little bit the dynamics between first half and second half of the year. No change to Fastweb guidance. No change to dividend guidance. With that, I hand over back to the operator. Thank you, Eugen. Ladies and gentlemen, to ask questions, please press star 14 on your keypad. I repeat, star one four. If for any reason you need to withdraw your question, please simply press star 15. Thank you. First question coming from Ulrich Rathe, Jefferies. Thanks. I have two questions, please. The first one is on the other sales in residential. That was plus CHF 21 million versus CHF -9 million last year. Can I just confirm that that is mainly the decoupling effect? If you take the decoupling effect out of that, do you consider the other sales level in the second quarter representative of that line item? Is that sort of a good guide for what is to come? Or are there other effects in the second quarter that might just be a bit unusual? That would be our first question. The second question is, you mentioned competition stepping up potentially a little bit from UPC Sunrise. We see this just looking at the rates and the offers. How do you currently see that developing into the second half, and how you see that unfolding? I think they haven't really operated in a sort of proper consolidated form yet, and so presumably they have held back commercial investments on their end a little bit because they don't really have a single brand. I was just wondering how you sort of accommodate that and what you expect in the second half from that source. Thank you. Good. I will take the competition question, and Eugen, we should start with the other sales. Yes, your observation is correct. The B2C revenue increase is indeed a mix of service revenue decline and the decoupling effect. As I said, in the first quarter, we also had a plus in hardware sales. Yes, there is one more factor in the second quarter. We do have a cinema chain that had no revenues basically whatsoever in the second quarter of last year, and revenues are picking up again in the second quarter of this year. I can confirm your observation. Good. To competition. Actually, you are right. The whole promotion activities is quite stable. We don't see much more aggressive promotions. They are and they were already aggressive. Normally, the second half of the year is more, let's say, promotion-driven each year. That's a bit one of the explanation of Eugen. I think we will have more events where strong promotions will be in place. Overall, yeah, competitive situation in Switzerland is approximately stable. Sorry. Would you think that if Sunrise and UPC start to operate as one, that they would step up the overall competitive intensity? Or do you think what you see now is what you put into your business plan going forward? Because you're talking about where it is at the moment, but I'm sort of more thinking about what your expectations post-merger are for them. Yeah. I think that's quite obvious. If they have a single brand, if they have a new product portfolio, they will certainly be louder to position the new brand, to position their new story. I think that will be the case. The question is, and that's hard to judge, what will be the commercial offers at the end? They will certainly try to leverage their different customer base. They have the mobile customer base, mobile-centric customer base from Sunrise and wireline customer base from UPC, and try to do cross and upselling. I don't have more visibility on it. If I would be CEO on this side, then certainly you would position the new brand. That's clear. That's helpful. Thank you very much. Next question, Georgios from Citi. Yes, good morning. Thank you for taking my questions. The first one is on the service revenue trajectory for the second half. I just have one question. Earlier you went through the drivers of what could get worse, and maybe roaming being the only thing that gives you a bit of an improvement. I was curious to understand how the device decoupling worked in the past on service revenue. I was under the impression that obviously you generated more hardware revenues because they were treated differently, but it had a negative effect on service revenue. If I'm not mistaken, the second half should have a lower negative effect from device decoupling in service revenues than the first half. I just want you to maybe correct me if I'm wrong with that assumption. The second one is to get an understanding of B2B. You mentioned the wireless segment in B2B being particularly competitive, and you have visibility on the contracts that are coming in. Is it something that has to do with the comparisons of last year? Is it something that we should worry about going into 2022, that the market may be getting a bit more competitive? My final question is around Fastweb. Thank you for providing the details around the access business of Fastweb, the wholesale lines. Is it possible to give us an idea roughly of what the economics of that business are? Like, is the VULA rate that the incumbent is earning a good proxy for the revenues you generate? You could perhaps talk a bit about the margin. Thanks a lot. Good. I will start with the B2B question, and then Eugen will take the device coupling question. On wholesale, did you get the question on wholesale? Yeah, whether VULA is a reasonable proxy for the price we charge. You will take the VULA, huh? Okay. Good. On B2B. The mobile dynamic. We have there strong competition. We have high market shares, and competitors try to enter this B2B market. That's why we have high price competition. This price competition, if you look forward, I think it will stay in the same region as it was in the last months or quarters. No fundamental change, no really acceleration on competition on wireline. The message of Eugen was more that we think that on some specific accounts, we will have a bit more pressure in Q, in the second half of this year. That was his message, but that's a special effect. Overall, I would judge that the competition wireline will stay as it was in the past. I'll take the first question on device decoupling. First of all, sorry if I created the wrong impression. First of all, obviously, the IFRS 15 line is a line separate from service revenue. If there is an impact, there was an impact of the device decoupling line and the IFRS 15 line, it's separate. It has an impact on our revenue dynamics, not on our service revenue dynamics. Sorry if I mixed it up before, sorry for that. The genesis of this effect is, IFRS, if you sell a discounted mobile phone together with a subscription, IFRS 15 requires you to defer the discount on the mobile phone over the life of the contract. We had many such contracts outstanding when IFRS 15 was introduced, stopped basically selling this type of contract and went to SIM-only about two years ago. We had a huge stock of contracts with this negative revenue line going forward for the next 25 months. With that stock of contracts going down, that negative revenue line went down and gave us a positive effect year-over-year. I'm sorry, it's a bit complicated, but that's what it was. Now with the stock of contracts gone, with the 24 months gone on the last contract that was sold this way 24 months ago, this effect will not show up anymore in our revenue bridge. Yes, purely service revenue is unaffected by this effect. I hope I answered the question. If not, please come back again. I wasn't sure I got it precisely. On the wholesale lines we sell in Italy, obviously, we cannot disclose any commercial terms. Yes, Telecom Italia is the biggest seller of wholesale lines in Italy, and so the VULA price they charge is a certain point of obvious reference for any other deals of this sort done in the Italian market. Thank you. If I could quickly follow up on the device decoupling. It may be that I misunderstand the way the accounting works. I was under the impression that if I opt for a SIM-only contract, I end up paying a bit lower. The last two years, you had a lot of customers who, as they decoupled the device, it had a negative effect on your service revenue because everything was bundled together, including the subsidy, into one expensive contract before. Am I confusing something, or was that something that changed the mix between handsets, devices, let's say, and service revenue as you had customers migrating over? No, our device decoupling line is actually tied to the bundled product. Okay. The bundled product has run out. Without the bundled product, simply speaking, there's always this, without bundled products, no IFRS 15 reconciliation line. I'll talk about the exception. If we do hardware promotions, then we get this IFRS 15 reconciliation again, but not in the amount and not in the dimension that we had when we principally sold bundled products. Device decoupling is really tied to the bundled products and not to the price difference between a bundled product and the SIM-only product. Okay. Thank you. Next question, Steve Malcolm, Redburn. Yeah. Good morning, guys, and thanks for taking the questions. Just a couple. One on Switzerland. Obviously, you reported a big drop in your personnel expenses in Q2. Can you just help us understand what the underlying move in personnel expenses was, adjusted for the pension credit and adjusted for the vacation accruals you talked about? Clearly, it was a big accrual in Q2 by the looks of it, but you reported like a 10% reduction despite the fact the workforce was actually growing in B2B. Just help us understand the underlying personnel. Yes, I'd be happy to take the question. First of all, the pension effect is separate. You will not find it in the indirect cost line. It's in a separate segment altogether. You don't see it on page 24 at all. What you see in the indirect cost column and in the work cost column is really the expense related to the workforce. The vacation accrual was a change quarter-over-quarter between first quarter and second quarter. The first half of the year compared to last year, there shouldn't be much of an effect. It's really a quarter-over-quarter thing. We can look at the first half of the year numbers as numbers by and large unaffected by these vacation accruals. The plus CHF 17 million is the effect to look at. On personnel expense, FTEs and the effect we show here. Now it's important to note that we report personnel expense and capitalized expense internally as separate lines. We count it as separate lines. Obviously, personnel expense is tied to the number of FTEs we have. The overall workforce expense has to be netted for capitalized expense because they go, as the name says, into CapEx. What you look here at the CHF + 17 million is the combination of a gross personnel expense reduction, which is smaller, CHF 7 million, if I have the numbers correctly, and capitalized expense line of CHF +10 million. That has to do with the fact, among others, that while our FTE numbers in Switzerland seem overall stable, it's not necessarily the same people here within these FTE numbers. We do in-source a number, for example, a number of software developers, who do different work from the people who were in the FTE number before, who get CapEx via capitalized expense and end up in CapEx. The number you look at here, CHF +70 million, is a gross personnel expense change and a capitalized expense change. The total is the relevant number for OpEx coming down over half year last year. Okay. That's great. Just on Fastweb, clearly a lot of the growth came from wholesale. Two questions. At what point do you think you can improve consumer growth in the current sort of relatively low 2%? How long do you think you can maintain wholesale growth in the sort of high teens? That's clearly the biggest driver of the growth we're seeing in Fastweb, and it's notoriously difficult to predict just how enduring growth in wholesale tends to be. On wholesale, we think that we can further have a growth because there are a lot of elements which push actually the wholesale business. On the one side, we have these networks, 5G networks, which are rolling out in Italy. This needs backhauling base station connections. That's a business for Fastweb, where we are strong in. Second one, there are new players on the market which actually get wholesale products from Fastweb retail players. That's the second element. I would say these two elements will continue. That's why we are confident that the wholesale business will continue to grow. Okay. On that reselling lines, should we presume that most of the lines you're reselling, you are effectively reselling TI lines onto other operators and making relatively low margin on those? How many of the wholesale lines are actually Fastweb-owned end-to-end lines? We have a good own footprint, so it's not only reselling of Fastweb. It's actually using our whole own fiber to the home footprint or ultra broadband footprint. That's not only reselling. Yeah. I was under the impression that Fastweb total fiber inventory was only about 1 million lines. Owned inventory as opposed to resold by TI. No. Our own networks in the bigger cities. We have everywhere our own network. We have a good coverage on our network. Okay. Maybe take that offline. Okay. Thanks a lot. Thank you. Next is Polo Tang, UBS. Taking the questions. I just have two questions. The first one is a follow-up in terms of competitive dynamics in Switzerland. Can you maybe talk about what you're seeing from Salt currently? Also, is there any indication that your FTTH footprint expansion is helping your broadband net adds? My second question is really just about 5G. Can you remind us how the 5G rollout is impacting your CapEx envelope? Is it leading to any incremental CapEx or is it more evolutionary in nature? Thanks. First on the competitive dynamic in Switzerland. Only out of the perspective of Salt. This partnership with Salt is just in the starting phase. Actually, the footprint extension through Fiber to the Home is still on a low level. The bigger rollout will be in 2022 on to 2025. We have two separate impacts. We have the impact that Salt will competing in the Fiber to the Home turf too. On the other side, we have also a stronger value proposition to compete against cable operators. These are these two elements. Overall, Fiber to the Home will strengthen the competitive footprint of Swisscom. What will happen on the pricing side, that's another question. We will certainly have further aggressive promotions, that's for sure. If I can follow up though on that specific point. If you look to our- You've obviously been expanding your footprint since the beginning of 2020. What have you seen in the areas where you have expanded with FTTH? Are there any signs that you are gaining market share, for example? It depends region by region on the local competition. It's very fragmented. We have regions where we gain market shares in the fiber to the home area, and we have other regions where we have mainly ARPU pressure. It's a really very fragmented picture. Overall, we are more competitive against cable operators if we have fiber to the home. The 5G question. 5G question. Sorry. The rollout of 5G, or you can show to the CapEx mix. Actually, you shouldn't assume that we will now have a peak on CapEx because of 5G, because what we are doing is actually replacing investments in 4G through 5G. Overall, the CapEx for the 5G rollout is in a level where we were in the past with our mobile CapEx. You should also assume that we made a lot of investments in the networks already today. All our base stations have a fiber backhauling. A lot of operators in the world, they have to do this. That's why we don't get these big peaks on 5G investments. Thanks. Thank you. Next question, Jakob Bluestone from Credit Suisse. Hi, thanks for taking the question. I just had a question on the Salt payment. Can you maybe just share with us what is your expectations about how they will ramp up over the next few years, just to help us with the modeling? Thank you. I'll refer you to. I'll explain it briefly. I just refer you for reference to the slide we showed in the first quarter presentation where we detailed all the individual effects. I'll quickly repeat it. The most important piece to understand, and I'm talking about the full year impact of Salt. I'm not talking about 2021. Okay? That's important to know. I'm talking about a theoretically full-year effect of the Salt deal on our financials. The most important thing to understand is that there will be a positive impact on free cash flow long term in the CHF mid double-digit million numbers. That's the baseline. That's the most important thing to understand, a long-term mid-double-digit free cash flow positive impact. There is a whole series of effects on the P&L due to IFRS 16 accounting. We will book wholesale revenues. We will book OpEx, so we will have a positive impact on EBITDA. We'll have a positive impact on CapEx. We'll net out some of the CapEx that is being spent to build what we sell to Salt. There will be a positive operating free cash flow boxing impact, but that will be much higher than the real free cash flow impact that we show. There will also be a structural net working capital effect. It's a bit of a complicated mix. If you take a look at, I don't have the slide number. I think it was slide 29 in the Q1 presentation where we detailed it all out. The most important thing is the bottom line that I mentioned. Great. Thank you. Next question, Francesca Schild from Exane. Francesca? Francesca, can you hear? Hello. Sorry, I think I was muted. Sorry. Can you hear me now? Thank you. Yes, we hear you. Yes. Great. Thank you for the question. Just digging a little bit deeper there on the partnership with Salt. Specifically, I think the slide you were referencing on the split between feeder and drop from last quarter. This is a multi-part question, but it'd be great to know, firstly, how many feeders are you going to have to build under the agreement with Salt? Secondly, how much does it cost you to build each feeder and how much for each drop? Finally, how many drops are you building per feeder? Thank you. Thank you for the question. You certainly understand that I can't answer these questions. We have a commercial contract with Salt, and we don't disclose the details. Okay. Thank you. The one thing that we can say is that the deal covers the rollout turf that we communicated also to you over the next three years, which is from 30% of households in Switzerland up to 60%. That's 1.5 million households. As we said, the rest is commercial and confidential. Understood. Thank you. Thank you, Francesca. This was actually the last question, so let me hand back to Louis for the closing. Thank you, operator. With that, I would like to conclude today's conference call. If you should have any further questions, please do not hesitate to contact us from the IR team. Speak to you soon, and have a nice day. Bye-bye.