Recorded. Good morning, ladies and gentlemen. Welcome to the 2022 Q3 Results Conference Call hosted by Christoph Aeschlimann, Eugen Stermetz, and Louis Schmid. Louis, the floor is yours. Good morning, ladies and gentlemen, and welcome to Swisscom's Q3 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. As usual, our CEO starts the presentation with the first two chapters. Chapter one, a quick overview with the highlights, the operational and financial performances of our Q3. Then in chapter two, an update on our network activities, B2C and B2B operations, and financial results in Switzerland before discussing Fastweb's Q3 results operationally and financially. In the second part of the presentation, Eugen runs you through chapter three, the Q3 financials, including the guidance for the full year 2022. With that, I would like to hand over to Christoph to start his presentation. Christoph? Thank you, Louis, and welcome also from my side to this presentation. I will directly move to slide 4 of the slide deck. We had a solid underlying EBITDA in Q3, and nine months into the year, we stand with +CHF 17 million underlying EBITDA evolution over the year until now. We were able to win many tests again in the past quarter. We have the best shop, best online app, and the best broadband in Switzerland, which is a very pleasing result. Interesting or I would say very nice evolution with B2C, with a stable revenue in the last quarter on the service revenue side and also B2B service revenue decline has been reduced substantially and overcompensated by our growth on the IT solution side. On the FTTH rollout side, I will come later on the next slide about the COMCO standings, and we'll go more deeply into our fiber rollout targets. Fastweb is growing nicely in the last quarter as well, both on revenue and EBITDA, and we have adjusted our revenue outlook due to the currency, euro Swiss franc, to EUR 11.1 billion, but with a stable outlook on EBITDA. I will now move to slide five, where you can see the Q3 market performance. We have a very nice evolution on the postpaid side with an accelerated net add of +48,000. Broadband was roughly stable in the last quarter and also TV slight decline. We focus on the broadband and TV side more on the value strategy and we've reduced promotional activities and accept a slight decline in the user base. The FM substitution continues on the fixed voice side but has slowed down in the past quarter, which we will see how it evolves over the next quarters now. Wholesale has been stable in the past quarter and performed quite nicely. On the Fastweb side, we have our three growth engines which perform very nicely. More on that in the section on Fastweb later on. The biggest, let's say, progress we did on the mobile side with +132,000 net adds, mainly mostly, sorry, coming from the B2C segment. We also did a great progress on the wholesale side with 32,000 new lines. On the broadband, we have a slight decline because we focus on a value strategy also in the Italian market and want to sustain our ARPU and accept this decline on the broadband base, which is largely overcompensated by the growth on the wholesale side. On slide six, you see the Q3 financial performance. We have a net revenue in the last quarter of CHF 2.7 billion, which is 1% lower than Q3 2021. We have a total revenue of CHF 8.2 billion, which is also slightly lower by 1.4%. On the EBITDA side, we stand at CHF 1.15 billion for past quarter, which is stable compared to last year, and CHF 3.341 billion on the nine-month standing, which is slightly lower than previous year. On the right-hand side, you can see the Q3 EBITDA bridge, where you can see that the underlying performance of the Swiss and Fastweb business. Both Switzerland and Fastweb have a growing EBITDA contribution, which was then compensated by some exceptionals and other EBITDA changes in the group in other companies, ending at CHF 1.15 million EBITDA for Q3. On the net income side, we are at CHF 429 million for Q3, which is lower by 12%. On a comparable basis without all the exceptionals, we are at -7%. The exceptionals, I think, related in the net income. Eugen can go into more details on this side, but it's mainly related to FX impact and higher depreciation, and only CHF 5 million come from the underlying business. Now I'll move on to slide 8, moving to the standing of the FTTH rollout and the COMCO investigation. The process with the COMCO is still ongoing, but we expect now a significant share of point-to-point topology. We unfortunately will not expect a decision until the year= end, as we have previously communicated. Now we expect a decision earliest in 2023. Maybe in Q1, hopefully in Q1, but it might take still longer. For this reason, in the interest of our customers, we have decided to change our rollout predominantly to a point-to-point architecture, because we do not want to build additional lines which cannot be used by our customers, which is not in the interest of them and neither of Swisscom. However, we will keep CapEx levels stable at the previously announced level of CHF 500 million-CHF 600 million and adjust the rollout speed accordingly in relation to the new or increased cost linked to point-to-point. We now have a new rollout target or coverage target of 50%-55% in 2025. We have announced a long-term ambition of 70%-80% coverage for 2030. Also noteworthy is the iscussions with Salt are already ongoing to adapt the existing point-to-multipoint contract to a point-to-point contract so that Salt can also take advantage of the newly built turf in the future. On slide 9, you can see a recap of the B2C strong commercial performance. As you remember, in Q2, we launched the new blue portfolio. We are very happy with the performance of the new portfolio in the market. We have a good sales momentum. We have 4.5 million RGUs in the new blue portfolio per end of Q3 with record low churn rates at the moment. We have also been able to reduce promotions under the Swisscom brand. Mostly, Wingo is also performing very strongly in the market, which led to the overall very excellent results on the B2C side. On slide 10, you see the standing of where we are in the shop renovation. We decided last year that we will renovate all our shops in Switzerland with a new concept. By the end of the year, we will have renovated 50% of the shop base. There are different zones now with more for service and advice and the welcome section. The shops perform very nicely. We see that we have higher average sales in the new shops, and we will continue to roll out over the coming two years. We're also able to win the Connect Shop Test this year with the new, newly built shops. Also in the online channel, we are making great progress. We have won the Connect App Test with number one in Switzerland, but also number one in Europe with 979 points, which was very pleasing result for us and I think a proof of our strong position to serve our customer, not only in the physical space, but also in the digital channel. Our latest NPS study has also showed that we have made progress on the NPS side and have now a quite substantial lead over our competitors in the market. This leads me to slide 11, where you can see the overview of the B2C operational results. I will first talk about wireless and then about wireline. On the wireless side, we now have 3.2 million RGUs, w ith a growing RGU base, mainly driven by the second and third brand growth and the blue penetration of 44%. As you can see, we have again been able to reduce the churn rates and, ARPUs are slightly lower on the post-paid side due to the brand shift between the Swisscom main brand and the second and third brands. On the wireline side, we have a slightly different picture. RGU base is stable, slightly decreasing. Churn rates are also lower in Q3 than in previous quarters. On this side, we have been able to increase ARPU slightly, which then compensates the minor loss on the RGU side. Moving to B2B on slide 12. You can see that we have been able to not stop, but slow down the service revenue decline on the B2B side. We have -CHF 7 million, if you compare quarter-over-quarter with a revenue of CHF 399 million in Q3, which is an excellent result. At the same time, on the IT solution business side, we have been able to grow CHF 14 million in revenue and now stand at CHF 288 million revenues in Q3, which is a 5% growth, in this section and overcompensates the service decline on the telco side. On the slide 13, you can see where we stand on operational excellence and cost savings. We have made some progress in Q3, and as we have announced in the last earnings call in Q2, where we said that most of the savings will come in Q4. This, you can see again the same picture on this slide today. Due to seasonality and the launch of blue, with higher marketing costs. The cost savings, we made progress, but not completely on a linear fashion. We are completely in line with our plan. All the initiatives are on track, and we confirm that we will achieve the CHF 100 million cost savings by end of Q3, because it is important to us to execute these cost savings initiatives in a way not to match perfectly each quarter, but actually so that they create the biggest impact and that we achieve the overall yearly results. On that side, I would say we are on track for the full year ambition. Now on slide 14, you can see the overall Swisscom Switzerland financial results with CHF 2.05 billion revenues in Q3 and flat revenue nine months into the year with CHF 6.152 million Swiss francs. On the EBITDA side, we had achieved the CHF 917 million of EBITDA, which is a 4% growth quarter- over- quarter, and standing at CHF 2.665 billion on the nine-month end of Q3. Overall, we are very pleased with the evolution of Switzerland in this year, 2022. I will now move to Fastweb. As I mentioned previously, Fastweb has three growth engines, which you can see on this slide. First is on the top right corner is the wholesale business, where we have been able to win many new customers or new players which are entering the Italian market with wholesale lines from Fastweb. This has led to a 76% RGU growth, and also a nice revenue increase on that side. We have the B2C business, where the main growth engine is the mobile business, which is growing nicely. We are actually the second best performer in the market behind Iliad, which shows that the Fastweb offer is compelling for customers, and we are continuously growing our customer base. The third growth engine is enterprise business, where we are growing in all segments, both in wireline, wireless, and also on the IT solution side, where we have been able to win many new customers in all of those segments in the past quarter. We have a slight decline on wireline consumer, which we accept because we focus on the actually a value strategy, keeping RGUs as stable as possible and not entering into the crazy price war in the Italian market. On page 16, you can see the consumer performance and what I just mentioned before. We have a slight decrease on the RGU side in RGUs in the fixed business with a 3% decrease, but which is largely overcompensated by the growth on the mobile side, where you can see we have a 27% growth in the RGU base, nearly reaching 3 million subscriptions by end of Q3. Which is also encouraging is that the ultra broadband subscriptions are continuously rising and we were able now to increase it to 85% UBB penetration. You can also see on the bottom right side that the FMC penetration in the broadband base is continuously improving, and we achieved a 4% increase on FMC penetration. Now on page 17, a quick word about enterprise and wholesale performance. Enterprise is performing very nicely. We have a 3.5% growth, bringing us to CHF 239 million. They have been able to win many new customers, especially on the mobile side. This also shows us that our ambitions to grow in mobile on the enterprise side are completely valid, and we are able to win customers, and we will continue to execute this strategy in the coming quarters. As I mentioned on the wholesale side, we have signed several new customers in the past month, and we're able to substantially increase both the number of lines, which you can see at the bottom right with a 76% growth in the connected lines and a 31% growth in revenues, bringing us to CHF 80 million revenues in the last quarter on the wholesale business. Which shows us that we can compensate the loss we have on the B2C broadband side. We are compensating this with a growth in the on the wholesale side, and this strategy is working out quite nicely. Overall, on the last slide, on slide 18, the Fastweb financial results. You can see that Fastweb has generated EUR 603 million revenues in the past quarter, which is a 5% growth in Q3, bringing us to EUR 1.8 billion on the yearly with a growth of 3%. Also, on the EBITDA, we were able to make progress, +3%, in the past quarter and +4% until the 9 months with CHF 628 million of revenue, which we are very happy with it looking at the evolution of the market in general in Italy. I think Fastweb, we can say, is performing excellent and way above the peers in the market. With this, I hand over to Eugen now for the financial results. Thank ou, Christoph, and good morning, everybody, also from my side. Happy to walk you through the numbers as usual. Particular pleasure today as this is overall a very solid set of results as you have already seen. I start on page 20 as usual with group revenue. At first glance, group revenue was down by CHF 118 million year-over-year. Obviously, there is a huge FX effect of CHF -146 million due to the strong Swiss franc or rather a weak euro. However you want to see this. With that out of the way, our underlying business grew by CHF 28 million, with Swisscom Switzerland basically flat and Fastweb growing with CHF 50 million. If we look at the individual segments within Swisscom Switzerland, B2C was down CHF 19 million in the first 9 months. The overall picture has been pretty stable over the quarters. Very little service revenue decline or actually almost flat. Each quarter, some negative contribution from various other revenue categories. In the first two quarters, it was low on hardware sales, and now in the third quarter, it's a lower contribution from other revenues. All in all, very stable. The big news, obviously, the very benign service revenue decline or even increase in the third quarter as we shall see on the later pages. B2B revenue up by CHF 55 million, as it was during the whole year. A mix of service revenue down but a very nice increase in revenues from IT services or IT solutions, and the third quarter was no exception in that respect. On to wholesale revenues, first nine months down by CHF 37 million, but the third quarter basically flat with CHF -2 million. The effect we see here is what you all know, the second half of the loss of the MNO agreement with UPC. This effect is now behind us, and so we should enter more stable territory on the wholesale side going forward. On to Fastweb, CHF 50 million plus in the first nine months, + 2.7%. Very robust third quarter with revenue growth of CHF 31 million. In the third quarter, this was due to a very small increase in consumer. Consumer is more or less flat, as you know, but strong growth in the enterprise segment with CHF +9 million, and in particular, strong growth in the wholesale segment, driven very much by the increase of UBB lines, as Christoph already mentioned, and also an increase in EUR revenues in that quarter. We are very pleased with Fastweb's third quarter. Finally, in other, we have a CHF -24 million, which is basically due to the deconsolidation of a small subsidiary at the end of last year. On to page 21, where we look at the revenue evolution in Switzerland, CHF +2 million all in all from Switzerland. If you look at the individual component, obviously what stands out is service revenue decline, not so much for the fact that it's declining, but for the fact the decline is so small. We had CHF -46 million in the first 9 months, almost all of which coming out of the B2B segment. B2C just down by CHF 1 million in the first 9 months, actually flat. Compensating for that, solutions revenue up CHF 56 million, about half of which is organic and half of which is non-organic. The third quarter with a normal contribution similar to the first 2 quarters. Partner sales up CHF 25 million. That's actually a mix of B2B up and B2C down, quite similar to what we saw in the previous quarters. Wholesale CHF -37 million we already talked about. Then other revenue was over the first nine months basically flat, but with some variation over the quarters. We had in the first half of the year an increase in cinema revenue due to the end of COVID restrictions. Now in the third quarter, we have a decrease compared to previous year due to handset insurance commission kickbacks that were pretty big in the third quarter last year and not as big this year. All in all, flat contribution from other revenues, which is the +2 of flat revenues all in all. Probably more interesting, top right, the usual picture, quarterly evolution of service revenue. You can see in the third quarter, we actually had a plus of CHF 5 million in B2C service revenue, which is obviously very positive, and it's probably the first time in years that we see a positive figure in that line. Also B2B service revenue decline with CHF -7 million, quite small. I guess the obvious question that you're going to ask, you know, is this going to last? Before I answer that question, let's dive into the individual effect, and then I'll get back to this question. If you look down at bottom right of the page, B2C CHF +5 million. In wireless, we have the usual mix, a positive impact on revenue from increased postpaid subscribers, in particular due to second and third brands. Then the mirror image on the ARPU side, the ARPU dilution out of this very same development, and these two effects balance out quite nicely. Most interesting part is what is not on this slide in this quarter, in these nine months. What is not on there is what we had in last year, an increase in fixed mobile convergence discounts. This does not have a negative impact anymore as it has in the past. We also have no impact from a worsening of the promotional environment. Make no mistake, promotions are still out there, and price competition is pretty stiff, but it's not worse than it was before. We have no negative effect anymore from this, certainly not in the third quarter. B2C wireless is actually stable. On the wireline front, we have the usual structural effect of voice line losses, CHF - 5 million. Overcompensating for that even, CHF +9 million, is an increase in ARPU, something we haven't had in a while. Some of the reasons are upselling of sports packages, content, and also selective reductions in discounts and various fees. All in all, a bit higher average prices than in the same quarter last year. Just one word on wireless, on the B2C side, t here is an element of roaming in there in the third quarter. Roaming was up compared to last year, obviously because travel increased significantly after the COVID years, and that contributed to the ARPU effect. On the B2B side, it's a bit the usual picture with one exception, and that's also the ARPU in wireless. You would expect a decline here. If you know our previous or most recent numbers, we typically have price decreases when agreements, contracts with customers are being renegotiated. We have a flat number here, also for the first time in a while, but this is actually also due to roaming. Roaming had a positive impact also on the B2B wireless, in the third quarter. Which takes me back to the question, is it going to last? I would say all in all, what we should expect is if you look at the Q2 and Q3 number, Q2 CHF 1-9 million and Q3 CHF -2 million, probably half of the difference between the two is due to roaming. A normalized figure for Q3, if you strip out roaming, would be probably a smaller double-digit number. Looking forward, I would say on the B2C side, expecting a flat number, is reasonable. On the B2B side, we would certainly expect further pressure and revenue pressure to remain. Voilà. I move on to page 22, EBITDA. All in all, EBITDA down by CHF 124 million. A long list of exceptionals, most of which you already know from the first two quarters. The only news here is a CHF 30 million effect compared to previous year where we booked a provision last year. The currency effect obviously, which was pretty strong in the third quarter given the development of the Swiss franc euro exchange rate. Leaving exceptionals aside, underlying EBITDA is strong with CHF +17 million in the group, CHF 19 million from Swisscom Switzerland, CHF 28 from Fastweb, and CHF -30 in other operating segments. I walk you briefly through Swisscom Switzerland. On the B2C side, B2C was up with CHF +8 million EBITDA. It's the mix that we saw over the whole year. Service revenue essentially flat. Lower subscriber acquisition costs. Then in each individual quarter, there was one or the other, let's call it special effects. In the first quarter we had high cost savings compared to previous years and the positive cinema effect. In the second quarter, we had high marketing expense which led to the CHF -7 million in the second quarter in connection with the blue launch. Now in the third quarter, we have the low other revenue line. All in all, obviously, with a service revenue that is flat, you shouldn't expect much different than a flat or slightly increasing EBITDA line on B2C. B2B also flat basically with CHF -3 million. The only maybe exception here is the third quarter with a CHF +12 million. This is due to an increased profitability in the solutions business. Lower costs this quarter in the solution business and increased profitability. On to wholesale. Wholesale CHF -10 million. That's essentially a net effect of the effect of the MVNO loss and an improvement in other access services. The roaming spread is jumping around a little bit over the course of steering the big ship, but the net effect is in the end over the first nine months, loss of MVNO and an improvement in other access services. Infrastructure and support functions up CHF 24 million. That's basically our cost savings that accumulate over the year. It's zero in the third quarter due to seasonal accruals, but nothing special here. Fastweb, obviously very positive. CHF 28 million plus over the first nine months. That's a +4.3%. Also in the third quarter, seven million up, despite a regulatory contribution that was in third quarter of last year. This plus in EBITDA is thanks to a strong revenue growth that we talked about and about flat OpEx compared to the previous year. If you look ahead towards the end of the year, that leads to a Fastweb EBITDA growth that we expect in the area of 4%-5%. At the outset of the year, we talked about 5%. Energy costs became a little bit bigger than we expected by then. All in all, very solid contribution that we expect here, 4%-5% year-over-year for the full year. Finally, in the other segments, we had a minus of CHF 30 million, which is mainly due to lower EBITDA contribution from Cablex in the intercompany business and also higher pension costs, pension accrual costs compared to the previous year. I'll move on to EBITDA Swisscom on page 23. Not much news here in the quarter. Subscriber acquisition costs were lower than previous year, something that you know already. Outpayments were lower in the previous year. Not much news here either. Cost of goods services were higher in line with the higher hardware revenue from the B2B segment. Most importantly, indirect cost savings CHF +37 million over the first nine quarters. Christoph already pointed out that we are fully on track to CHF 100 million by the end of the year. Obviously, costs in the solution business grew as revenue grew there as well. In the third quarter, you see there is only a minor growth in costs, and this explains the improved profitability that I talked about when I spoke about EBITDA. On to capital expenditure on page 24. All in all, we are on track to our full year guidance of CHF 2.3 billion. A bit behind on wireless and fiber. Wireless, we make very good progress, as Christoph already explained, but maybe not as much progress as we would wish to. We still have a bit of a backlog of building permissions on 5G sites. Fiber we are a bit behind due to the COMCO investigation. On the other hand, we have high investments that we have planned for backbone transport and infrastructure and IT. All in all, we are on track to the guidance. Free cash flow on page 25, we are down CHF 196 million compared to previous year. Now this is obviously driven by the operating free cash flow proxy, which is down CHF -113 million. But this includes all the exceptionals. This is reported numbers. Obviously, without the exceptionals this number would be up. That's the major driver. We have a small decline out of change in net working capital, CHF -78 million versus previous years, but this has completely normalized. Some of you might remember in the second quarter, we had a much higher number here. I already mentioned back then, we have one structural effect that is not going to go away for the rest of the year, but all the other things should balance out, and we already see that right now. We have two balancing factors. One is pension, positive effect from pension plus CHF 63. We are back to normal here this year, nothing special. We paid somewhat higher taxes than in the previous year, which is just a phasing issue. On to net income on page 26. Net income in the first nine months is down by CHF 322 million, which sounds like a very big number, but we need to look at the details. If we start from EBIT, EBIT is just down by CHF 83 million, again, reported numbers including all the exceptionals. Obviously this high decline in net income is driven by the extraordinary financial result last year that we talked about already at length in the previous quarters, so I'm not going to comment any longer. That's CHF -185 million. We had a positive effect on taxes, tax expense last year in the third quarter that we already highlighted last year with CHF 57 million impact, so that makes up the big number. If you strip out all of this that I talked about, net income is actually up in the first nine months. That finally takes me to page 27, the guidance. First of all, Christoph already mentioned it, we adjust the revenue guidance from previously CHF 11.1-CHF 11.2 billion to about CHF 11.1 billion. The only reason for that is the weaker euro compared to the Swiss franc and the translation of the Fastweb revenue into Swiss francs, no other reason for that. We confirm the EBITDA guidance of about CHF 4.4 billion compared to the previous quarter. There are two obvious effects to take into account. One is that service revenue is again stronger than we originally expected, and the other one is the declining euro/Swiss franc exchange rate, which gives us a hit on the translation of the Fastweb EBITDA into the group results in Swiss francs. The overall result of these two effects is a net zero, so we stick to the EBITDA guidance of CHF 4.4 billion. We also confirm the CapEx guidance of CHF 2.3 billion, which finally takes me to the final and maybe the most important point. If we reach these objectives by the end of the year, and we are confident we will, we confirm our plan to pay out a dividend of CHF 22 per share early next year. With that, I hand back to the operator. Dear participants, to ask questions, please press star 14 on your keypad. I repeat, star 1 4. To withdraw your request, press star 15. We already have several requests. I will now open the lines one by one. As soon as I open your line, you will hear the announcement, "Unmuted." Then please introduce yourself and ask your question. Hi, it's Polo Tang from UBS. I just have a few quick questions. The first one is just on Swiss service revenues. Can I clarify what you think the normal annual run rate will be? Previously you talked about CHF -200 million, then you narrowed it to CHF -100 million- CHF 150 million decline last quarter. Are we now talking about an annual run rate of maybe CHF -50 million for service revenues going forward? Second question is really just about Swiss EBITDA. If you adjust for the one-off TVT fine in Q2, then the Swiss business has actually seen positive underlying EBITDA growth the past three quarters. If your Swiss service revenues are nearly stable, you've got growth in IT solutions and continued cost savings, is there any reason why Swiss EBITDA growth cannot continue to be positive going forward? My final question is really just about Salt, because they've changed their terms and conditions to include the option of CPI-linked price increases. I was just interested in terms of what your opinion was on this move, and do you think that this is something that Swiss consumers would be willing to accept? Thanks. Hi, Polo. This is Eugen. I'll take the first question on service revenue run rate. I think you're right. If you look at the numbers of the most recent quarters, it has become clearer, at least we do hope so that you know an expected service revenue decline for the near future should be much lower than what we saw in the last two years or so, where we had rates as you mentioned of maybe CHF -200 million or so per year. What it will be exactly and what we do expect exactly for the year 2023, we will explain in the full year conference in February. You're obviously right. We are, as we stand right now, far from the -CHF 200 million that we had in the past and that we originally expected for this year. Maybe I hand over to Christoph for the CPI-linked CPI link question on Salt, and then I'll finally deal with the EBITDA question. Yeah. Okay. Hi, this is Christoph. Just some thoughts with regard to CPI-linked pricing of Salt. Obviously, we are also observing this move and analyzing it at the moment. With regard to inflation, I think we can say that our first ambition is actually to not allow inflation on our cost base, to basically try to push away everything that we can to not increase our cost base. We will try to compensate the inflated costs first, and then the last resort would be increase consumer prices, which we are also investigating at the moment, what is possible and how we sort of what will be possible moves. This would be our last resort, I would say, and not my preferred option moving forward. Obviously, it's an interesting move of Salt, which opens us new possibilities also on our side, and we will see how we will execute this in the next year. Finally, your second question on EBITDA evolution in Swisscom Switzerland looking forward. I mean, obviously I wouldn't like to go into too much forecasting here, but we all know the factors driving EBITDA evolution in Swisscom, Switzerland. This is service revenue decline, which we talked about, and its cost savings and the net balance of those two. Now, obviously, we continue to work very hard on improving the efficiency of our business. The cost savings part of the equation will stay with us. Secondly, the service revenue decline, as we just discussed, at least for the moment, it's much more benign than it was in the past. This balance has evolved over time. Now there is a third element to this balance, which Christoph just talked about, which is inflation. This will enter into the equation when you think about EBITDA, Swisscom Switzerland evolution going forward. It will be the balance of those three that will determine whether indeed EBITDA of Swisscom Switzerland can be kept flat going forward or will decrease or will increase. Once we have finally made up our minds on that for 2023, we will talk about it beginning of February of next year. Thanks. Hi, it's Good morning. It's Georgios from Citi. Have a couple of questions. The first one is on the fiber announcement this morning. Maybe a couple of parts on that question. The first one is if you don't mind giving us your rationale behind making this announcement. I know you may need to wait another 6 or 9 months before the final decision. Do you feel that by going ahead with a point-to-point upgrade, maybe you're reducing your leverage in the negotiations with COMCO? Or is that perhaps an acknowledgement that it may not go your way? The second one is just to understand a bit the topography of these 400,000 customers that you wanna connect. Is it the case that they are more urban, and therefore you already expected that point-to-point was likely to be the final outcome of the process? A third element just on this, clarification on that slide, t he 70%-80% ambition for 2030, is that regardless of outcome of this consultation? Because I guess the more rural the areas, the cost clearly gets if it's point-to-point. Or is the 70%-80% assuming there is some compromise? My second question is just a very quick one. On page 16, when you are showing the decline in broadband subscribers, I'm curious if you could give us an idea whether the small decline you have in broadband subscribers is in the very rural areas where there's no ultra-broadband option, or whether it's in the areas where you have other competing operators like Salt and others, you know, potentially winning market share. Thank you. Hi, Georgios. It's Christoph speaking. Just maybe some thoughts about the rationale of our fiber decision. We are now, you know, 20 months into the dealings with COMCO, and we expect at least another, let's say, 6 months until we have a decision. We have built up so many fiber lines by now that we cannot use, that we came to the conclusion that we need to change the construction model in the interest of our customers and in the interest of the business, so that we stop continuously adding, you know, 100K lines per quarter, which are actually not usable by customers. It also takes us quite some time to change the rollout machine from multipoint to point-to-point. The reason behind this is sort of lengthy dealings of the COMCO, difficult to predict end. In the past 20 months we actually suggested many compromised versions which were all rejected in the discussions and the market tests that the COMCO did. We now expect actually in any case a substantial obligation to build point-to-point lines. This also brought us to the conclusion that changing to point-to-point is actually a future-proof decision, no matter what the COMCO will decide, because quite a big point-to-point amount is expected now in this like legal procedure. Regarding to the- The 400,000, they are spread out over Switzerland, so they are sometimes urban, sometimes less urban. They are definitely in areas where we expect that we have to build point-to-point in the future. This is also the reason why we are switching to point-to-point. The 70%-80% 2030 ambition is regardless of how we need to build. I think the important message on that side is that we will keep the CapEx stable, and we will not start to increase CapEx to achieve this ambition. We will continuously, let's say, monitor what is going on in the market, business evolution, price evolution, other context changes, and then we will continuously adapt so that we can protect our business and EBITDA and free cash flow evolution of the company. Okay. I can take the final question on page 16. I assume you talked about the broadband subscriber evolution of Fastweb, the -3%. Obviously, the -3% is a net figure. So behind that net figure is on the one hand churn of customers, and on the other hand acquisition of new customers. Obviously, I can't tell you exactly how much of these are in rural areas or more urban areas. But overall, our UBB percentage of our customer base is increasing significantly. By definition, the share of pure copper reselling goes down and FTTH share goes up, or FTTH share goes up. It's probably safe to assume that the copper lines are in more rural areas, and the share of these customers as a percentage of the total goes down. Again, I made a mistake with the slide I was referring to. I was referring to slide five on the broadband side. Year to date, there is a decline in Switzerland. I was curious whether I know the last quarter was positive, but given you're about to sign a deal with Salt, I was curious whether where you saw in the past decline in broadband customers, whether it was in the areas where Salt was already present. And therefore, as you expand the coverage of your competitor, that could become a problem. Sorry, I'm just referencing the slide. Yeah. You know, maybe independent from the specific numbers on page five, O bviously, Salt was in the past successful to increase their share from a small, very small base in the FTTH turf. If Salt gets access to an expanded FTTH turf, we do expect them to gain some share there. The question is obviously how much of that is at our expense and at competitors' expense. Obviously, we balance out over time, and we don't know yet. Yes, in the past, they have been successful to gain share in the FTTH turf. Thank you. Morning, everyone. It's Yemi Falana from Goldman. Congratulations on the strong performance in the quarter, and thanks for taking my question. Just one question from me on the CapEx side. As I understand it, the rollout you've now committed to is about 30% more expensive on a unit cost basis. What do you view as the implications on CapEx, given it seems that your coverage ambitions are not 30% lower? Is it fair to say that your kind of near-term CapEx and free cash flow outlook is unchanged? There's about CHF 1 billion worth of incremental investment versus what would've been the case in a point-to-multipoint world. Just trying to understand the moving parts on long-term investment needs. Thank you. This is Eugen speaking. I'll take the question on CapEx also. I'm not going into too many comparisons of what would have been if we had built, et cetera, et cetera. You are perfectly right in assuming that our CapEx envelope in the new setup for the fiber rollout you can expect it to be stable in the range of CHF 500 million-CHF 600 million over the next three years. This was obviously an important consideration in us planning the rollout under the new circumstances, as you mentioned correctly, since on average an individual point-to-point line is more expensive than an individual point-to-multipoint line. For the same CapEx envelope, you get a lower number of access lines. Very clear. Thank you. Hi there. It's Josh Mills here at BNP Paribas Exane. A couple of questions. The first one, I just want to come back on the CapEx point. Could you just help us understand what the CapEx envelope within your 2022 budget is? You know, I'm trying to use this to work out what the implications for 2023 could be. How does your current CapEx spend compare to the CHF 500-CHF 600 million range you're talking about in future? On the second point, I just wanted to discuss energy cost headwinds. It's something that's coming up a lot across the sector. I believe you're quite well hedged in Switzerland, but less so in Fastweb in Italy. Could you just give us an indication of what kind of energy cost headwinds you should be expecting for 2023 and 2024, and also your hedge position in both Switzerland and Italy as well? Thanks. Sure. Okay. First on the CapEx, and I'll talk about fiber rollout CapEx envelope only. Because you know the overall CapEx envelope of CHF 2.3 billion. For this year on the fiber rollout, we expect about CHF 500 million. And for the next three years between CHF 500 million and CHF 600 million. The CHF 500 million-CHF 600 million are in essence a mix of two things. One is rolling out the point-to-point FTTH, as we explained. And the second smaller component is retrofitting the existing 400,000 point-to-multipoint lines, which actually means digging up the streets and building the feeders to hook up the PON tree to the central office. CHF 500 million this year, about. In the next three years, between CHF 500 million and CHF 600 million is a rough figure. Obviously, on the exact number, we'll talk about it in February. Secondly, on energy costs headwinds, a very good question. It's obviously something that kept us busy this year. As you pointed out correctly, on the Swiss side, we are very well hedged and long-term hedged all the same. We do have in 2022 versus 2021, a small impact on energy costs on the Swiss side. I talked about a single-digit number already at the beginning of the year, and this is what it is. We basically bought almost all of our needs for the year, already a year in advance. Given where the energy prices are right now, and given the degree to which we already bought for next year, this number will increase, again, next year. It will all be reflected in our guidance, but it's probably not going to move the needle in any meaningful way. On the Fastweb side, we are not hedged to the extent that we are hedged in Switzerland. This is also why we have increased energy costs on the Fastweb side this year compared to 2021. It's a small double-digit number. The upshot of not being hedged is that you are also flexible when prices go down. For next year, it's too early to tell where we will end up exactly on the Fastweb side. It's not implausible to assume that there will neither be much upside nor much downside compared to this year's figure. This is where we stand. Obviously, a part of the synergy, in particular on the Fastweb side, still needs to be acquired. It depends a bit on the prices going forward. Yeah. Thanks for that. I mean, just coming back on two things. On the energy point, surely energy costs will be going up for next year if you've been buying in the market for 2022 and spot prices are higher than they were at the start of the year. Are there any offsetting factors you could point to in Fastweb to say why the double-digit million headwinds shouldn't repeat or even be higher in 2023? Secondly, on the fiber CapEx, I think in the full year presentation slides, you gave, you know, best and worst case scenario, which made it look like the CapEx required for point-to-multipoint versus point-to-point was quite binary. In that case, should we assume if you go fully down the point-to-point route and you're currently at CHF 500 million of CapEx, that's maybe CHF 100 million higher next year? Or is it still feasible it could come within that range of CHF 500-CHF 600 million? Thanks. No, it will be within that range. Yes, we gave best case and worst case scenario at the beginning of the year to have a boundary around the range of potential outcomes. We also always stressed that the truth will be somewhere in between. I confirm that we are talking about the range, and it will be within that range. That's clear. On energy costs in Fastweb from 2022 to 2023, it really all depends on prices. Obviously, if prices still go higher, we will have a negative impact year-over-year from 2022 to 2023. If prices stay where they are or go down even, as we have some indications right now, they might be flat or even go down. It all depends on this evolution. Thank you. Yes, good morning. It's Luigi Minerva from HSBC. Thanks for taking my two questions. The first one is on the reorganization announcement or, you know, sentence in your press release. You mentioned that there is gonna be a group strategy and development unit that will be responsible for identifying new growth areas in Switzerland and abroad. I was intrigued by the abroad part. I'm wondering if you can elaborate and if that may involve also acquisitions outside Switzerland. The second question is on your dividend policy, which is obviously very core to the equity story and investment case. Can you just remind us how do you think of, how you think about your dividend policy and under what circumstances the dividend may grow from here? Thank you. Hi, Luigi. It's Christoph. I'm happy to take the first question on the reorganization. Basically, we bundle together activities which are already present in the group. We decided to merge what we called previously Digital Business unit, where we have venturing innovation, all the startup management together with our strategy group, into let's say a new group that is focused on one, the group strategy, and second, executing growth options. We will, in the coming months forward, we will Go into more details and formalize the growth strategy and the themes we will look at in the IT space. It is important that, I think, we make progress on that side. We are already active in certain areas, like cybersecurity, like digital trust. In some of these areas, there might be opportunities to also grow outside of Italy or Switzerland. It is too early to make any announcement on or around these topics. I think for the group, it is important to continue its shift and transformation to more IT solution business also going forward. Maybe on the second question, Louis, our dividend policy has been longstanding, is well-known and is unchanged. We are committed to pay out a high share of our free cash flow as a dividend. It all depends on free cash flow evolution. Rest assured that we are doing everything to keep free cash, even make it grow. That's it. There is no news with regard to dividend policy to talk about other than that. Okay. Thank you very much. Yeah. Hi, it's Maurice from Barclays. Start with sort of a big picture question. I'm relatively new to covering Swisscom again. On Italy and 5G, i n the slides, you talk about having 3.5 million homes passed with 5G FWA, which is a significant step up in the third quarter. Can I just check exactly what that coverage is? I think some of it's being rolled out by yourselves, I think some with partners. Just your sort of thoughts in terms of what's been driving that growth and how we should think about the evolution of the coverage. Just sort of more linked to it, just, I mean, intrigued as to your levels of excitement about FWA as a sort of product in the Italian market, you know, where you think long-term penetration of customers could go to. Thank you. We continue to build out the 5G FWA footprint together with Linkem. We will continue to build out the coverage in the coming months. We will see. I think it's an important technology, especially in the areas where there is no FTTH coverage in Italy, which is still quite substantial, where you have bad broadband connectivity. In the future, we will focus on these areas where there is real customer value through FWA, and we will see how the customer base evolves now in the coming quarters ahead of us. It's predominantly rural, the 5G FWA. Good. Well, I would say in the past, we built it also in other areas, in urban areas, but before we were focused more on the rural areas. Is it all being built by yourselves? I thought you had a partnership with, I forget whether it was Linkem or EOLO you were partnering with, but wondering how much has been done with you rather than partners. Yeah, we have a partnership with Linkem, yes. Okay. Is the build of the 0.8 million mainly you or mainly Linkem? No, both. Just to be clear, both parties or both partners build out their own network and then we share it for the service. This is the essence of the partnership. All right. Thanks so much. Hi, it's Jakob Bluestone here from Credit Suisse. Thanks for taking the questions. Two questions. One, given the stronger service revenues that you reported, was there a reason for not changing the CHF 3.5 billion guidance for Switzerland for this year? Is it just 'cause it's so late in the year or is there something else? And then just secondly, can you maybe just explain what is the relevance of the COMCO dispute at this point? I mean, if you did actually win it, whenever it finally concludes, would something change in your targets or, I mean, how should we sort of think about that case? You know, does it matter anymore after the decision you've made today? I'm happy to answer the second question, the COMCO dispute. After the announcement of today, I would expect quite little impact on any COMCO decision. Anyway, you know, the next step would be to COMCO to pronounce itself. We will see what they want us to build, and we would, let's say, analyze if we take up legal action. Running through all instances on the legal side would take us probably, you know, a couple of years, until we have a final verdict from the legal side. For the coming years or at least the three years moving forward, the impact of a COMCO decision is now quite negligible, compared to our announcement we made today. On the guidance question. The focus is obviously on the overall guidance of CHF 4.4 billion for the group. You know, just to see what has changed since the second quarter. Not so much actually. What has changed is the service revenue. Although already in the second quarter we talked about CHF 100 million-CHF -150 million, much closer to CHF -100 probably. That was the wording, if I remember it correctly. You know, we now talk about if you look at the CHF -46 million for the first three quarters and the normal rate for the fourth quarter, we talk about maybe CHF -60 million or so. That's a difference to what we talked about in the second quarter of about CHF 40 million, and on the overall group level, that nets out with the currency effect from the translation of Fastweb, and that's why we ended up at 4.4%. We didn't change the sub-line for Switzerland due to those CHF 40 million ± change that we had since Q2. Got it. Thank you. Hi. Thanks. This is Clara from JP Morgan. I just had two questions. One is on Italy. So you said that the wireline market in Italy remains competitive, but we also saw some price moves like Iliad increasing its fiber prices. So just wondering what you're seeing there and what do you think of the pricing moves? Is it more rational compared to the past? And then the secon d question is just on the CHF 100 million telco savings target. So what will drive the about CHF 60 million savings in the last quarter, you know, given that you are quite confident? Thank you. Okay. Hi, Clara. It's Christoph. I will take the first question. You're completely right. There have been some encouraging price moves in the Italian market, and we see that some of the players are behaving more rationally than before. We will see how this plays out in the coming quarters. We also still have new entrants coming into the market, so we have other brands that start or are thinking about wireline offers. We are a bit, let's say, cautious about how the pricing levels evolve over the in the future. Indeed, at least the price increases that we have seen are, let's say, encouraging moves. At least it is not becoming worse, which I think is already, also, a good thing. Regarding your CHF 100 million savings target questions. Yes, you're right. It requires a substantial improvement in the fourth quarter year-over-year in order to achieve the CHF 100 million target, but this was exactly planned like that. There are two or three elements to that imbalance over the quarters over the year. One is simply the savings profile of the individual savings programs that we have that do not kick in in a linear fashion over the year. The other one is we had in the previous year, in the fourth quarter, very high marketing expense in connection with Black Friday promotions, et cetera, et cetera. The phasing of these expenses were completely different this year with the launch of the Blue portfolio, which concentrated a lot of the marketing spend in the second quarter as opposed to the fourth quarter. There's the third element, which is the typical volatility of various accruals over the course of the year. All of this explains the somewhat, you know, biased distribution over the year. As Christoph pointed out, we are fully confident that we'll make that number as we did in the past. All right. Thank you. We come to the last question. Yeah. Hi there. It's Steve from Redburn. Apologies you got some background noise. Mid-station at the moment. Two questions. One on Fastweb and one on Swisscom costs, if that's okay. I take the point on Fastweb wholesale revenues, but I think they grew 13% in Q3 versus 3% in the first half of the year. Can you just clarify whether there were any large IRU sales or one-offs in that growth you reported? Just coming back to Swisscom costs, going through the indirect cost breakdown, it looks like you booked almost nothing for allowances on receivables and contract assets. I think just CHF 2 million versus about CHF 17 million last year. Maybe just help us understand why the reduction in accrual is so great in the third quarter and what we should expect on bad debt accruals in the fourth quarter. Thanks a lot. Okay. First on Fastweb, Steve, and then I will ask you to repeat your second question because I simply did not, didn't understand or didn't hear it. On the first question, Fastweb, yes, indeed, in the third quarter, there is a significant IRU component in the growth of wholesale revenues. However, the biggest component is still the growth in B2B. So you're right. But you're right, there is a more bumpy element to the revenue mix in Q3, which explains the strong approach. Sorry, I think I didn't hear the second question on Switzerland. Sorry. Just looking at your indirect cost breakdown between Q3 and Q2 and the allowance for receivables and contract assets. I think you only booked about CHF 2 million in the third quarter versus, I think, CHF 17 million last year. I'm just curious as to why. Which I guess that's your bad debt provision, basically. I'm curious as to why it was so far down this year versus last, given that they saw what looks like sort of economic deterioration, but maybe you're not seeing it. Just any sort of help on how we think about your bad debt provisioning and why it was so low in the third quarter. Thanks. Okay, thank you. Now we got the question, but we don't have the answer. We need to get back to you on that. Okay. Louis is happy to. Okay. No problem. Okay. Thank you. Okay. All right. Thanks a lot, guys. Thank you. Thank you, Steve, and thank you to everybody. With that, we 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. Thank you. Bye-bye. Thank you. Bye.