Good morning, ladies and gentlemen. Welcome to the Swisscom Q1 2020 results presented by Urs Sharpe, Mario Rossi and Louis Schmid. Louis, the floor is yours.
Good morning, ladies and gentlemen, also from my side. As always, our quarterly presentation has 3 chapters: Q1 highlights, business review of financial results, but slightly different to the past, we will not run you through each slide. Our management Urs Scheffe, our CEO and Mario Roeser, our Chief Financial Officer, Chuck focuses on some key messages per chapter by referring to the corresponding slides. 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 Page 4 with the Q1 highlights. So overall, we are performing well in this COVID-nineteen crisis. So our performance is good.
We have 85% of our employees in the home office. And operationally, we have no problem and good KPIs. On mobile, we were able to win the 4 mobile network tests in this year. We are also awarded as the leading provider of cloud and security in the B2B market in Switzerland. And also on ESG, we were awarded as one of the most sustainable company.
In Italy, we are growing EBITDA growth of 5% and overall an EBITDA margin, which is which slightly increased. On Page 5, you see our market performance. Like always, Q1 is a bit weaker. And then also compared to last year on mobile, we had last year the special effect on an MVNO contract on Coop Mobile. So that's why the mobile net adds are a bit weaker, but overall, it's in the region of our estimation.
So a bit slight, but no specific or there are specific remarks to it. In Italy, we have a good momentum on broadband, net adds and mobile. Mobile is overall in Italy a bit weak because this home office, nobody is going out. And therefore mobile net adds are a bit weaker. On Slide 6, you see our financial performance.
So solid figures underlying EBITDA stable, so minus €3,000,000 stable EBITDA. So we were able to compensate the revenue service revenue decline in Switzerland through cost term actions, cost reductions. In Italy, we have a growth and overall, so a stable EBITDA. Also, you see the free cash flow on the bottom of the chart, which is at EUR 520,000,000. CapEx, CapEx are in the round of last year, EUR516,000,000.
So overall, a solid figure of financials. If you go on Slide 8, so you see some information to the COVID-nineteen situation. So in Switzerland, we had the lockdown mid of March. In Italy, it was earlier. They are, let's say, 2 or 3 weeks before the rest of Europe.
And on an operational level, as I already mentioned, no special impact. Maybe interesting to mention is that we were able to digest the volume increase and we have no performance problems and we don't need additional CapEx to digest the increase of the volume. The shops, they were partly closed. In the beginning of the lockdown, they were closed. Now we are reopening the shops and today we have more than 90% of the shops open.
This will certainly also help us to get a better performance on mobile in the future. And we also established kind of health package for our customers. So for customer which were blocked outside Switzerland, we get roaming benefits. We have special offers for SMEs for home solutions, home office solutions. And also on the SpeedType, we made some special promotions.
Overall, the net promoter score of our customer base increased through the crisis. So we get very good feedback from the B2B side but also retail side. On Page 9, you see the dynamic on our business of COVID-nineteen, we will certainly have enough time during the Q and A to talk about it. But it's hard to quantify it today because it depends on the different factors like duration of the epidemic and also the behavior of our customers. It's too early to judge it on a quantified level.
In Q2 or during the Q2 results, we have certainly much more visibility on the impact on it. But we will have a small impact on roaming because I'm convinced that traveling will be not the big topic in 2020. So we will have a small lower 2 digit impact on roaming. And so the major question is what is happening with the payment rates, but that's too early to judge it. And today, we don't see any signs that payment conditions are deteriorating.
So we have a stable cash inflow into Switzerland and in Italy. To Page 10, here you see what was happening on our network or is still happening on our network. So 70% more calls on mobile, 65% more calls on fixed voice. The calls are normally longer, 50% longer. So a high stimulation of the voice volume and also the data volume increased and this without the performance problem in our network.
On Page 11, I would like to skip it, but here you see how we made the restatement in Swisscom, Switzerland because of a reorganization. And the major change is actually the change of the SME department from retail to B2B and this leads to the restatement, which you can see on Page 12. Let's jump to 13, Page 13. Here you see the figures of B2C. So solid operation, good performance with our entertainment products, with our new TV platform.
InOne is continuing to be attractive. We have an increased penetration on fixed mobile converged offers. So this is a bit of a message. On Page 14, some KPIs. So low churn figures, you see it on the bottom left, low churn figures in March, they are even a bit improving.
And so 8.9% postpaid churn, 9.7% broadband churn and converged offer has 7.6%. In the middle of the chart, you see our ARPUs. So the blended wireline ARPU is stable, and the postpaid ARPU is at CHF 50 4, so minus CHF 4. And what are the reason behind this ARPU decline. CHF 2 are coming from fixed mobile converged discount, CHF 1 out of the revenue generating mix or brand shift and then CHF1 is because of the debundling, so which is compensated also by lower shock.
On a net basis, it's and you could say it would be minus CHF 3. On Page 15, our B2B business, so we are fully on track with the transformation B2B. On Page 16, some KPIs to our B2B business. So we are the clear number 1 ICT provided in Switzerland. On the bottom right of the chart, you see our positioning in cloud and security from a research company.
So Swisscom is the leading provider for cloud and managed security, which are both growth areas. And you see that our margin in B2B is stable or, let's say, it's a more or less stable or slightly increasing ARPU EBITDA in B2B. On Page 17, you see the financial figures of Swisscom Switzerland. The one on the revenue chart, you see the pressure on our service revenue and then minus 70 2,000,000, €40,000,000 is coming out of B2B, €32,000,000 from B2C. EBITDA, stable.
So these are the main messages to the financials. And then on Page 18, Fastweb performance in the consumer market is resilient. So you see that we have an increased broadband customer base by 3%. Mobile subscription went up by 24%, Fixed mobile penetration increased by 3% points. And this is important because then we have a better ARPU and lower churn.
On Page 19, B2B performance faster, so a good B2B performance in enterprise, but also wholesale, you see the growth rate, a good performance. And on the financial on Page 20 of Farfetch, you see this growth of 5% of the EBITDA. So these were a bit my main messages. And now I would like to hand over to Mario.
Thank you, Urs, and good morning also from my side. Only a few additional information remarks to the financials jump directly to Page 24, where we show you the main elements of the EBITDA evolution of the last five quarters of the Swiss business. And in Q1, the service revenue declined by €72,000,000 close to 5%, thirty 2,000,000 coming from B2C and EUR 40,000,000 from B2B, and there are EUR 21,000,000 from the wireless business and EUR 19,000,000 from wireline business. And we were able to compensate the main part of this decline of the service revenue. I think we did again a good job on the cost side.
We reduced the indirect cost by 33,000,000 CHF 14,000,000 coming from workforce costs and CHF 19,000,000 from IT, customer care, field services, communication, etcetera. Then we have a net effect a positive net effect of €29,000,000 from the device decoupling and the SAC SRC savings. And maybe one remark to the wholesale business. You see in 2019, we had quite a material increase of the wholesale revenue, where we had the impact of the transfer of the UPC client from the network of salt to our network that had an impact close to SEK 30,000,000 for the whole year. And overall, I would say, a flat evolution of the EBITDA in Switzerland.
Then some remarks to Page 21 to the cash flow development in Q1. There is there are 2 elements. So the change in networking CapEx of liabilities due to relatively high payments, and we had in February, January some prepayments for maintenance contracts and licenses contracts. Overall, over the full year, I expect a flat development. Then you see in Q1, we have relatively low income taxes paid.
The Swiss government reacted very quickly in March and allowed to postpone payments of federal and cantonal taxes until Q4 due to the COVID-nineteen crisis. And of course, we took benefit of that decision. And I think during these days, it's important to have a look at the debt maturity profile on Slide 29. In 2020, we have to refinance Eurobond of EUR 500,000,000, which is due end of September and some smaller bank loans. Just to remind you, we have EUR 2,000,000,000 committed credit lines still unused.
When you have a look at your balance sheet end of March, you see that we have SEK 1,500,000,000 cash at hand. The reason was that we draw uncommitted credit lines to secure the short term liquidity, mainly to secure the payment of the dividend in April, as we did right after, let's say, the whole evolution of the COVID-nineteen crisis. Of course, we are committed to our strong credit ratings. We had the credit reviews with the agencies, and Moody's already confirmed A2 stables this week. That brings me to the guidance.
So beginning of February, we committed as we communicated our guidance for 2020. The guidance is still in place. In Q1, we don't see any negative explosive place for you a positive COVID-nineteen impact cannot be quantified at this stage. It's just too early. You see at you saw at Slide 9, possible areas of our business where we could see in the next month or quarters impacts of the COVID crisis.
And with that, I hand over to Louis to manage or to the operator to manage the Q and A.
Okay. Operator?
Thank you, Then please announce yourself before asking your question. I will open the first line now.
It's Romain Arbuzov from JPMorgan. Thank you very much for taking the questions. My first one is just on the guidance. So you're saying that you're keeping guidance, but there is some uncertainty related to corporate. If you look at what some of the other telecoms have done, they have withdrawn guidance due to uncertainty.
And you're citing the same uncertainty, but you're keeping the guidance. So I'm wondering, does that mean that in the base case and given everything that we know up until this in terms of the impact on the business and also more generally in terms of the developments of the situation, is the base case that you're more likely than not to keep the guidance. Is that the right way to interpret it? Just in light of everybody or many others are drawing the guidance. So maybe a little bit more color there, that would be helpful.
And then second one, just roaming clarification, the 2 digit impact from roaming related to COVID, is this EBITDA revenues? And could you please help us understand what is the EBITDA impact on revenues? That would be very helpful. Thank you.
Good. I will take the question of roaming and Mario then on the guidance. So in Switzerland or Swisscom has a tariff scheme where roaming is included. So in the majority of our postpaid tariffs, we have roaming included. So the impact from there is actually 0.
And then the second point is what is happening with inbound roaming. That's clearly the borders are closed. There are there is no inbound roaming traffic. And the third effect is outbound roaming additional data package. So and at the sum, if you take all of this net, we will have a low I think we will have a low two digit impact on EBITDA level, but a low.
And on the guidance, it's our guidance 2020 is still our base case. And we as a management team, we work hard to meet this guidance also during this crisis. But there are some elements which we can be which are out of our control. For example, bank debt losses. Today, we have no visibility, but what might be in Q3 and Q4?
How many SMEs had to go bankrupt? We just don't know. So that's the reason why we say we have huge answer or huge, we have uncertainties. Also on the shop frequencies, we opened, that was explained, our shop, but we don't know yet how people behave in the next few weeks months. Are they afraid to go to the cities to the shops?
Or are they coming back? We just don't know it.
So I
think we need to observe now the situation in the next few months, and then we have much clearer statements at the earnings call of Q2. But today's case for us is guidance 2020, and it's our target to meet this guidance also during this crisis.
Thank you. Can I just ask a follow-up? In relation to the guidance, What do you plan in terms of mitigation measures? And have you already started enacting any of those mitigation measures? And do you think it's fair to assume that you will exceed your EUR 100,000,000 cost cutting target this year?
On the cost cutting side, we only said that if we see that we can do more than $100,000,000 then we do more. But we don't on the cost side, we don't we have not implemented an acceleration program. I think on the CapEx side, we will see some natural lower CapEx because some sites were closed in some cantons during the few weeks. But also there, we will see in the next month whether this CapEx is fully materialized or not. I think maybe it's slightly lower just because of these of the closing of the sites in some content and management.
Thank you very much. Appreciate it.
Thank you. I'll open the next question.
Hi, guys. It's Simon from Barclays. Just a follow-up on cost cutting. Does COVID-nineteen make that any more difficult? I'm just thinking from, say, a redundancy point of view.
So I'm just wondering if there's any issues there. And then secondly, on competition, we know that online competition has typically been very intense with big promotional discounts. I'm just wondering, have you seen any material changes in competition from that point of view in the last few weeks? Thank you.
Good. Mario, you take the cost. I will take the online competition. Yes. On the cost side,
I think we are confident that we can meet or that we will meet our cost target 2020. And looking for 'twenty one, that depends on the overall climate social climate in Switzerland, how we beat the unemployment rate at the end of the year, that might become a bit more difficult to reduce headcount in the future. But also, I think it's too early. We stick to our targets also for cost reductions at 'twenty one that we want to reduce indirect costs by at least EUR 100,000,000. And there, we are we started now working on different projects, like we did in the past to fill the pipeline for the next year.
But you're right, might have some impact to COVID-nineteen situation on 'twenty one, but not on 'twenty.
So on the competitive dynamic during this COVID-nineteen crisis, what we don't see is actually above the line promotions. There is much more calm. But you are right, on the below the line level, there are very specific, sometimes very specific aggressive promotions. But and that's also the point that you see that the percentage share of net adds over online channel customer care, direct sales is increasing. But from a high level perspective, the promotion activities is not totally changing.
If you also look to the aggressivity of the promotion before the crisis and during the crisis, there is no big difference. But with the same flavor as in January
February. And I'm
convinced also if shops are reopening, shops will remain an important part certainly on mobile.
Okay. That's very clear.
Just a quick follow-up then because we've seen service revenues improve quite materially this quarter versus the run rate last year. Does that does that competition is not changing? Give you confidence that we're now maybe at a new run rate, if you maybe park COVID-nineteen for a second?
We had a better run rate in the B2B area, €9,000,000 in Q1 versus minus SEK48,000,000 in Q4 'nineteen. But I don't see a trend there, no. And also, there's 3 elements on in the B2B. In the B2C area, I think these three trends, fixed voice line losses, conversions and ARPU mix will continue to be in place also in the next 3 quarters.
Okay. Thanks so much guys. Thank you, Simon. Next question?
Good morning. It's Roger from Citi. I have two questions. The first one is around EBITDA and the second one around KPIs. On EBITDA, I was just curious on the couple of things you mentioned earlier.
If you could be a bit more specific about when do you think the timing of any bad debt recognition will be visible? Like if you can talk us through how the accounting works in terms of is there delays in payments and then you start to have to make provisions? And then also on the cost side, there was a significant benefit in SSE and SRC versus device revenues. I think it was around EUR 50,000,000 benefit. Mario, correct me if I'm wrong, but at full year results, you suggested there should be a $5,000,000 perhaps improvement versus last year from the new device plans.
Is it something you may get a slightly bigger benefit than what you are budgeting initially? And then my second question is on KPIs. And I think it was partly answered also when you said that with very opening of the shops, you expect to see a bit better postpaid performance. But what I was a bit curious about is, obviously, you have a very significant broadband base, which some of your competitors don't benefit from that. So I was curious if you think the lower postpaid net adds is specific to you or is a broader market issue around this crisis and whether it can be explained to us by the use of online channels or not?
Thank you.
Good, Mario. May I start, Otis? Thanks for your questions. In 2019, we had a full year impact the net full year impact of SAK decoupling of SEK 75,000,000. We expect for this year, as you mentioned, 5 more, around SEK 80,000,000.
On the bad debt recognition from an accounting point of view, whenever you prepare a balance sheet, you have to make a judgment of potential future bad debt losses. I don't think that we will see an impact already in June because we monitor now these payments on a weekly basis. I can tell you until end of April, both in Italy and in Switzerland, we didn't see any negative impact. I would say, if we see if we face problems on the bad debt side, the first time, most probably we would see that in the Q3 closing. Q2 would be too early.
But on the second question, the postpaid performance. So I think in a saturated market, we should look much more to revenue market shares on mobile than only subscription market share. That's point 1, because the value of the SIM card is very different. And that's the first remark. The second remark is, if I look to the B2C performance, a very good indicator for me is always on the topic of market share net porting, net porting balance.
And if I look to the net porting balance, I don't see really changes. And then the 3rd remark to it is B2B. On B2B, if you look to the KPIs on B2B on Slide 16, you
see
our revenue generating units in B2B. So they are stable or slightly in general or stable. But on the other side, we have sometimes you are winning customers, sometimes you are losing customers. And this will have an effect on the value side or on the amount of SIM cards which are changing. But overall, I think we are in a quite stable market relation in postpaid, but the market is saturated.
And if you want to get a customer, you have to do it through aggressive promotions and then you have a dilution on your ARPU.
Thank you, George. Next question?
Thanks very much. This is Ulrich Serhat, Jefferies. Again, on the mobile postpaid customer losses in the Q1, In the prepared remarks, you suggested to sort of look at seasonality. It's always a bit lower in Q1, and that is true. I'm just wondering why has the shop closure not helped more?
Is it that most of this sort of seasonal loss happens usually in January February and therefore March doesn't really matter that much? Or is it that you didn't see a churn benefit during the
lockdown? Or
am I misunderstanding the situation overall a bit on the mobile postpaid? Maybe you have pulled back marketing expenses and sort of just look at that from this value perspective and then decided that Q1 is entirely okay. I'm just wondering how to interpret this, in particular visavis the churn impact from the lockdown onwards? Thank you.
The Q1 performance has actually not really a big impact from the lockdown because this is where only 2 weeks. And my message is Q1 is always a bit weak because there you have the spillover of this very aggressive promotions through Christmas time and then also January February normally is also a typical strong promotion month. And this then you have a spillover in March. And but if I look to the trend, I mentioned it on the churn figure margins is it has a bit of better trend on churn. So we see a small effect on this lockdown, but that's I would say that the major dynamic in our market is not this lockdown.
It's the overall promotion and competition activities.
That's helpful. Can I ask a follow-up question, a separate one, please? Could you highlight who in Switzerland still installs broadband when it's not just a question of sending somebody a modem or router to plug into an existing connection, but when it all involves a truck roll, do you do that? And do any of your customers do that, though sorry, competitors do that
still? So the broadband market in Switzerland is totally saturated. So everybody in Switzerland has a broadband connection. So if there are changes in net adds from the one side to the other side, this is churn. And we still see that the cable operators are suffering a bit on the net adds.
But overall, the broadband market is, I would say, it's becoming more And if you see to the movement in the customer base, they are, I would say, 100% driven by promotions from the one or the other side. And so the dynamic is that's a bit the overall dynamic, Zwift coming is approximately stable. Capital operators are slightly losing. And then there is a small increase on the 2 other telco players.
Okay. So but still there is migration between technologies, right? There's still some migration to fiber. There's sometimes churn between cable and
Yes. But the
main dynamic is not I would say the main dynamic is not technology driven. It's promotion driven. And yes, because the bandwidth in Switzerland for the majority of the curtain, there is enough bandwidth on the hybrid copper networks or fiber networks and cable operates having off speed. The main dynamic is not fiber to the home and dynamic are the promotion.
Understood. Thank you very much. Thank you.
Thank you, Ulrich. Next question?
Yes. Hi, Doug. Can you hear me, guys?
Yes.
Yes. It's Steve from Redburn here.
I just wanted to come back to roaming, and I was kind of surprised by your relatively muted exposure. Can you just help us understand exactly what your roaming exposure is? Are you a net payer or a net receiver? And maybe just tell us what proportion of revenues and EBITDA is made up from roaming? That would be great.
And just on cash taxes, I heard your comment on the Swiss government support. Do you still expect to pay the same absolute level of cash taxes this year, but just all loaded into Q4? Will they be lower than your original expectation? Thanks.
Okay. Mario, do you take the cash back?
The cash back, we expect to have this normal payment in Q4. It will not be lower. It's just the government just helped the companies, let's say, in the kind of a short term financing, and I think most companies took benefit on it.
And on roaming, yes, the covenant, what's the plan of the covenant? First is ensure the liquidity for this company, which had a lockdown. That's the major point and they were very fast. And the second topic is you get some payments if your employees are having the work. So that's you don't have to do a layoff, stabilizing off the market.
These are the 2 major impacts, and that's why you don't see actually a real increase of the unemployment rate in Switzerland. And this stabilizes overall the market. And now the whole question is how fast we will have a recover of the business in Switzerland and how is the attitude of the consumer to spend money because at the end, Swiss people, they have money and they can't travel now. So they could spend the money in Switzerland. We don't know it how the take up will be.
The whole roaming revenue is around SEK 300,000,000 of which SEK 200,000,000 is inbound. And overall, we are a net payer. But as we also explained, we also have some revenues from mainly from data roaming packages outside of Europe. And on that, we make, of course, a margin. And there, we might suffer a bit.
And that brings us to the expectation that the negative impact could be in the low double digit numbers. And the overall number of roaming is not public.
Okay. But when you say you're a net payer, I mean, if no one traveled at all in and out Switzerland, would your EBITDA go up or down?
Yes. But we don't have out payments too.
Yes. But of course, you would lose the out payments, but I'm trying to understand. You're saying there's an EBITDA hit, but if you're a net payer and no one traveled, your EBITDA would go up?
Yes. The normal situation would be that the outpayments are there, but as always also inbound is not anymore around. So the outpayments will compensate the inbound revenue losses. But as Mario explained and also explained, we still have the exposure in outbound metered revenue, which is a certain margin. So therefore, it has, let's say, overall not a positive but a slightly negative impact.
Okay. Thank you. Thanks, guys.
Thank you.
Hello, it's Usman Gazi here from Berenberg. I just want to make sure you can hear him, please.
Usman, we cannot hear you.
Can you speak clearly or loud more loudly or?
Very good. Clear. Thank you.
Okay. I just had two questions, please. Firstly, just wanted to Hi, sorry, now? Now. Okay, great, great.
Thank you. I just wanted to point out, firstly, on I mean, some companies have disclosed what the exposure is to sectors that are most affected, so hospitality, leisure, travel, etcetera. I mean, are you willing to disclose how much of your revenues are coming from those specific sectors?
Good. It's a yes, a very different dynamic in this market. So we have industries which are booming and other ones which have really a tough time. And the industries which will have the most tough time in Switzerland, these are the traveling industry and the event business. And but these are not too big industries in Switzerland.
That's the point one. And the second point is, even if they have problems, the revenues of this industry will not just go away because they would have to make a bankruptcy and then we would loss or would have more bad debt. And that's why it is, as Mario mentioned, it's too early to say what will be the impact on this bad debt, and we don't disclose the revenues by industry.
Okay. Thank you. And the follow-up question was just on B2B. I guess, from your experience in previous cycles, in the wake of a recession, I mean, how long does it take for your clients to start requesting contract renegotiations, etcetera? Or do you think that because of the financial support being provided by the government, this crisis might be different than that you don't see that kind of impact?
No. Up to now, we don't see changes there. As Mario mentioned, we don't see changes in the payment behavior, and we don't see an additional activity on renegotiating contracts. But this depends all on the development of the economy. If the economy comes on the big pressure, that's clear you will have a step by step negotiation on some contracts.
But on the other side, I think everybody saw how important telecommunication and IT is, and we had a lot of companies where we were able to do additional projects, IT projects to ramp up their infrastructure, I think there are 2 dimensions, a risk and a chance.
Okay. Thank you very much.
Thank you, Usman. Next question?
Thank you. Good morning. It's Michael Bishop from Goldman Sachs. Just two questions, please. Firstly, following up on the comments that you've seen a much higher NPS.
We've also heard this from a couple of other big European telcos through the crisis so far. And so the big picture question is, do you think this higher level of NPS can continue potentially post crisis? In the sense do you see a sort of fundamental mind shift from customers in terms of realizing what value they're truly getting from telco connections? And then the second question is you're flagging that you've completed the move to all IP and residential and B2B and the subsequent decommissioning will complete by 2022. Could you just walk us through the next practical stages on that?
And to what extent can you effectively monetize any of the old infrastructure like some other European telcos have done in terms of selling buildings and things like that? Thanks very much.
Well, Mario will take the question on IP and I will say something to the Net Promoter Score. So I think it's normal that during a crisis, if you are very close to your customers, if you are agile, fast reacting on the demand that NPS has a good development. But on the other side and totally with you, our industry should now be able to use the good momentum, which we have because everybody saw that our industry is crucial and that we should work on the differentiation and net promoter score that we come out of the area where we only talk about prices. I think that should be a chance for our industry. But yes, unfortunately, our industry prefers to talk about prices than value.
I think we should really work now on the momentum to show the value of our industry, and then we will be able to increase the net promoter score also in the future.
No. And on the decommissioning, I'm not so optimistic about monetizing the commissioning of all IP. The equipment may be some parts you can sell, but that you will not impact you won't see in the cash flow statement. It's not material. And on the buildings, in the main technical buildings, those you cannot leave because there are also data centers, etcetera.
Maybe you have some free space afterwards, but you cannot rent those spaces and the most probably we will use them for additional data center capacity. And then you have a lot of free space in small buildings, and these buildings are not very attractive. They're not nice buildings, and they are not on central locations in the landscape. So also there, of course, we try to monitor to do some monetization, but I really don't expect a material cash inflow. Sorry about that, but I think that's a matter of fact here in Switzerland.
Yes. Then from the whole IP migration, there are certainly positive effects cost side, volume side on call centers as an example shop. So it's much more convenient for the customers so we can decrease costs in call centers. But that's not that new, and we see
it already today. And the huge part of this all IP savings we realized in the last 2 years, You saw the lower number of calls, the lower interventions that we really realized in that was part of our cost saving programs where we took out SEK 250,000,000 net in the last 2 years was one important element.
Thanks. That's really helpful.
Thank you, Michael. Next question?
Yes. Thank you for taking my question. Andreas Rynlos from Zuho Cantonalbank. I was wondering, can you discuss the 5 gs antenna emission measurement discussion basically in Switzerland, where the regulator hasn't set really good measurements out. I mean, does that change anything short term in your investment plans?
And also, when do you expect when these emission regulation are out?
Good. Maybe to give a bit more flavor on this question. In Switzerland, there is a big debate on 5 gs, a lot fake news around 5 gs. And the government actually is, let's say, is not very supportive on this topic. So we have still not an established method to measure beamforming.
The 5 gs has new antenna type. And for this, you need a new mechanism to measure the radiation. And the government hasn't established this specification. And this leads to the challenge that a lot of regional governments say they block the building of antenna. And for de blocking this, I think we need this specification from the government, from the state.
I think this will take time. I don't understand why, but it takes time. And I don't think that we will have before the end of this year a clear specification. So that means in several districts in Switzerland, we will have problems to build 5 gs networks. This is mainly in the French part of Switzerland.
And so we will have slowly light the CapEx, as Mario mentioned, but this is not too big at the end. But we will have a bit of slower rollout on 5 gs in several areas. And now I hope that governance will be much more supportive.
Okay. And then last night, I think you lost the trial against INIT7 for IP you've got to pay for them. But is there more kind of impact on pricing there on interconnection?
No, no. It's a very, let's say, political driven topic. So we had a claim of 1 of the players in Switzerland asked for free access to interconnection. That's not normal in our industry. And now that the court decided that they have to pay something for interconnection.
But the regulator has now to decide how much. So at the end, we will get a bit more money because up to now, we haven't charged him. But that's neglectable because It's more a political competition driven game.
Okay. And then my last question, working capital was going up. I mean, has that to do that you couldn't sell that many devices into the lockdown? Or what was the reason behind it?
No, I mentioned it on the cash flow statement. We had a negative impact of a bit more than SEK 200,000,000 that had to do with fund prepayments, on maintenance contracts and license contracts and some higher payments of accounts payable in the 1st 2 months of the
year. Okay, clear. Thank you very much.
Thank you, Andreas. Let's go through the probably last question.
Yes. Thank you. It's James Ratzer from New Street Research. I have two questions, please. The first one is regarding business service revenues.
So in Italy, you have disclosed that churn on your enterprise business was down 24% year on year. What kind of churn reduction are you seeing in the Swiss business in Enterprise? And if there is a sharp reduction in churn, I mean, could it be in Switzerland that even though the economy might weaken, you might actually see an improving trend in business service revenues from lower market share losses. And secondly, just on your mobile net adds in Italy, could you talk about the changes you're seeing at the moment in number porting? Are you seeing less ports in at the moment from people like TIM and Vodafone specifically?
Is that what is impacting your net adds at the moment? Thank you.
So on B2B churn trends in Switzerland, we don't see changes. Our churn figures in D2B are low. And if we lose a customer, it's a very specific business. If a competitor of us wants to, let's say, to buy a customer, then there is maybe we will lose it. Overall, we have a very good win ratio.
We really want to fight for a customer. We have a very good win ratio and also win back ratio. So the main development of the churn level in the B2B is related to the aggressiveness of our competitors, And I don't see changes there. And then the second question on mobile dynamic in Italy, maybe very high level, the market is more calm through the during the lockdown. And I don't see general changes in the last month, but Mario may be on it.
No, first of all, we have
a very low market share. So I think the porting dynamics are difficult to see from our low the pausing dynamics in the overall Italian markets are difficult to see from this low market share in Italy. And then I think on the mobile side, we suffered from the COVID because Italy is 2 weeks ahead. So I think there we are really missing 1 full month with open shops and open retailers, I think, very soft. On the other side, we had quite a good performance on broadband.
And as Mario mentioned that the whole net porting during the lockdown went down. So that's a bit our visibility, but I don't think that there were changes in the market shares in the net porting or the whole net porting dynamics. In my view, there were not big changes during the crisis.
That's clear. Thank you very much.
Thank you, James. So this was actually the last question. Back to you, Luis.
Okay. Thank you very much. And with that, I would like to conclude today's conference call. If you should have any further questions, please do not hesitate to contact them. Speak to you soon, and have a great day.
Thank you.
The conference recording has been stopped.