Good afternoon, ladies and gentlemen, and welcome to Swisscom's full year results presentation here in Zurich. After this short introductory movie, with impressions on our activities for the technology progress in Switzerland and the inspiration of Swiss people, we now start the presentation with the program and a quick introduction of today's speakers on Slide 3. Urs Sheppi, our CEO, starts with the chapter group results where he dives into last year highlights commercially, operationally and financially. In Chapter 2, strategic update, Urs will elaborate on trends, our strategic answers and priorities. And then in Chapter 3, Swisscom Switzerland, our CEO gives you a short overview on our 20 18 achievements and explains our activities and ambitions along our strategic framework, best experience, operational excellence and new growth for B2C and B2B.
Thereafter, Alberto Balcagnio, CEO of Fastweb, will discuss the industrial and financial performances of our Italian business and its plans going forward. After Alberto's presentation, we will have a 20 minutes break for coffee, and then we will continue at 3 p. M. With the group results presented by our CFO. Mario Rossi, our CFO, will discuss in detail our financials, including the outlook for 'nineteen.
And in the last chapter of the presentation, some final remarks from our CEO. Thereafter, we move into Q and A session for this chapter, Dirk Wirt Spitzke, our Chief Marketing Officer and Urs Lehner, our Chief Business Officer, will support in case of specific Swiss questions. Therefore, may I kindly ask you to keep all your questions until the 14 slot at the very end of the presentation. With that, I would like to open the conference and hand over to Urs for his part. Urs, the floor is yours.
So thank you, Louis, and welcome from my side. Would like to start with the group results and some highlights. If we look to the 20 18, overall, we have another successful year. We were able to perform on the network side. We won all the network tests in Switzerland, but we are not a marketing test company.
I would say more important is the customer feedbacks on networks and also there we have superior KPIs. So overall, we are performing on mobile. We were very active on the rollout of our fiber networks in Switzerland. Just to give you an example, each day, we are building out a new small city or a village with ultra broadband. So we are on a very high rollout speed on our fiber networks.
And on all IP, we are in the retail market through 99% are migrated on IP. And in the B2B market, large customers, we are at 75%. On the product side, we had successful bundled product in 1. We have about 1,000,000 additional customers on our quadruple play or triple play offer. And we also increased our experience on the TV platform and we are gaining market share.
On the customer service side, we have excellent service. Customer service, that's extremely important because in a saturated market where we are building on your customer base and excellent customer service is operational excellence side, we actually perform on our guidance or even we slightly overperform on the cost saving side. And Italy, Italy is certainly also a good message in each segment we were able to grow. Alberto will come later to it. And in the B2B market, we are able to grow on cloud products and also security products.
Our debt portfolio was rebalanced, and we have an overall interest rate of 1%, so very favorable conditions for our debt portfolio. We are now 20 years on the stock market. And if you take the total shareholder return, you see that we are in the region of 5%. So this some highlights and I think that's one of the very important chart because it shows that Swisscom is able to keep his market position in all the segment and that we are performing on the operational level. You see we have solid market shares in the B2B and also in the B2B market, also on mobile.
If I look to the market share on mobile, we are stable in B2B, but we have and we see it later, a strong price pressure in the connectivity portfolio in the B2B market. On the residential part, maybe one message. The in-one product portfolio is performing well, and we are able to reduce our churn rate. So we are on a churn rate for IN1 customers in the region of 5%. And I think that's an important message because the strategy, if you go for a value based management, the churn figures are extremely important.
Here, an overview on our financial results. So overall, the results are solid. If you compare it, the EBITDA on a like for like basis, underlying EBITDA, you see that we have a decline of €34,000,000 EBITDA with different dynamics. In Switzerland, we have this decline of 170 €4,000,000 and the main impacts are the ones which we already know and they are also actually as forecasted. We have the structural decline in invoice lines with 64,000,000 Then on mobile, you see that it is on outbound roaming, it is a bit flattening out.
It's €21,000,000 Converged discount is €85,000,000 And then on the B2B, where we have this price pressure in the connectivity portfolio, on wireline and wireless, we have this €97,000,000 On the other side, we are able to reduce our indirect costs by €121,000,000 which results at the end in this €137,000,000 Fastweb is growing and other is growing, so that at the end, we have this €34,000,000 decline, what means a quite stable EBITDA. The operational free cash flow or the operational free cash flow proxy is SEK1.8 billion. And so we are in a comfortable situation to cover our dividend of CHF22. Maybe one remark to our equity ratio, it's 36%, and we have a debt ratio of 1.75 multiple. So overall, solid figures.
Solid figures with a different dynamic in Switzerland and Italy. Some remarks to our strategy. This chart summarizes actually the high level picture of the strategy of Swisscom. You see we have 3 main pillars for our strategy. The first one is delivering a superior customer experience.
I will come later to it what is behind this. 2nd, because we are in a market which is transforming, operational excellence businesses in, let's say, in around our core business is also extremely important. So these are our 3 pillars for the strategy. And then the 3rd pillar is also Fastweb, which has the potential for further growth. On customer experience, delivering an excellent or superior network is the base for the success in the market because you are connected all the time.
You want to have coverage everywhere. And therefore, the importance of excellent networks is becoming even more important. That's why we are investing, continue to invest in our network and also optimizing our networks. The second pillar are the offerings. So we are in a market which is becoming more and more converged.
So delivering seamless experiences through the different product areas is an important topic. Multi brand is also important in our business because you have different segments. I will come later to it. And certainly, a potential for a company like Swisscom is to grow in the ICT space, not only in the big corporate market, but also in the SME market. And then as already explained, customer service is at the end the crucial point.
As a company like Swisscom, everybody in Switzerland has a connection with Swisscom. And if we don't perform on the customer service, we will very fast get, let's say, a reputational problem, and this has a spillover on the customer satisfaction. That's why customer service is so important. Net Promoter Score is an extremely important KPI for Swisscom. On operational excellence.
So our forecast was to deliver savings of €100,000,000 per year. You saw the savings in 2018 is €121,000,000 and we have also the ambition to deliver 100,000,000 on a solid base also in the next years. This will be a combination of digitalization, of CapEx efficiency, but also on working on stability. I'll give you an example. We were able to reduce the calls in our call center in 2018 by 13% through a better performance on our product portfolio, through simplifying our product portfolio to have a more stable service.
And this actually results in a lower volume in our call center and then these are indirect cost savings. So we are working on very different angles to reduce our costs without getting actually a quality impact or a negative impact on the customer service. I'm confident that we will be able to deliver these savings. On growth, I think we can actually grow very high level set in 2 areas. The first one is on the connectivity side, increasing our share of wallet.
That's what we are doing within 1. Trying to upsell like we do it with our new product, InOne Mobile Go, I think that's one of the big element to create growth in a saturated market, share of wallet and upselling. And then beside, we have the potential to go in adjacent business. And this is simply said, it's IT, IT solution, cloud solution, security. And the 3rd pillar is 5 gs, when we will have 5 gs.
On 5 gs, we will be able with our capabilities, which we have in the Swiss market, also to go much more in campus solutions, Industry 4.0 as an example. I think there are a lot of opportunities for Swisscom. And then certainly, last but not least, Fastweb, where we can grow. So there are growth opportunities for Swisscom. If we go to our Swiss business, so our strategy in the Swiss business is value over volume because the market is saturated.
So we should work on the value on our customer base. And that means defend our market share and trying to keep the ARPU where it is or even to increase the ARPU. And this chart shows that we are able to defend our market shares. So we have a market share in broadband of 53%. If you include also the wholesale business, we are at 67%.
On TV, we have increasing market share. We are at 35%. In fixed voice, we have this structural effect as actually planned or seen. It's flattening a bit out, but we have this structural effect where we lost 200 around 260 subscription in 2018. They not went to the competition.
They are actually out of the market. Or if they went to the competition in the calculation of the competition, normally it's a free access. They will not have an ARPU. And on postpaid, we are on a stable market share of 60%. In-one, maybe one remark to In-one.
On the left side of the chart, you see what is the penetration of In-one. So we are above 50% IN1 penetration and the churn is lower as already explained. So we are able to increase the customer lifetime value in the in-one portfolio by approximately 5 years. On this chart, some information to the financials. You see that we have a decline, a lower service revenue of 240,000,000.
The effects, I already explained it. Actually, they are all on the level where we gave the guidance, with one exception in the B2B market we had in the 3rd and Q4 more pressure on the connectivity revenues, but all the other elements are where we guided them. And Mario will explain it during the guidance. You can see that there we have we'll have some improvements on these different categories of the service revenue. So that the hit, we will we assume will be lower in 2019.
Costs went down over what we guided by €120,000,000 And as already said, €1,800,000,000 operating free cash flow proxy. So more or less stable operating free cash flow. Now some remarks to the network to our network strategy in the wireline area. Our ambition is a 100 and ninety-eighty ambition for 2021. That means all the municipalities will be modernized or roll out with fiber technologies And we will have a coverage of 90% on average over Switzerland, which has a speed of over 80 megabits per second.
So we will have really a fast network, full coverage network over Switzerland. And over 80 megabits per second means that's the minimum is 80 and the majority are in a speed of 200, 300 up to 1 giga bit per second. You see that in 2021, 75% of the households will have a speed over 200 megabits per second. So I think we will be in a very good shape to compete also against cable operators and to win market share from cable operators. On all IP, as I explained, all IP migration, we are almost soon in retail market, 99%.
And if you take the whole average of all customers, we are at 49% 94%. So 94% all IP migration is done and this will give us the opportunity to switch off the old TDM technology in 'nineteen or 'twenty. Some information to mobile. So we have an excellent 4 gs network. It's nice to see that we have a coverage of more than 99% LTE coverage.
And LTE plus which gives us speeds up to 300 megabits per second, is at 95%. So you see that we have really an excellent full coverage 4 gs network. We won all the tests on mobile, and we will invest in 5 gs. As soon as the spectrum auction is over, I can't say anything to the spectrum auction. It's forbidden.
But as soon as the spectrum auction is over, we will begin to make the rollout. Our ambition is to have a rollout, a partial rollout in 60 cities or villages in Switzerland. We made in 20 18 a lot of pilots in different cities to see how this technology and these new technologies working. And so we are confident that we will be able to have a fast rollout of 5 gs in Switzerland. We are prepared for it.
All our base station are fiber connected. And with our dense fiber network, we are in a good situation to have a fast rollout. In 2020, the ambition is to go broad in the whole country and then also in 2020, handsets will come. The majority of handsets will come. The first one will be certainly in 2019, but in 'twenty, there will be a decent portfolio.
5 gs. Why is 5 gs interesting? You know it better than I. There are some new functionality in it, speed but also latency and the virtualization of the networks, which you can do and then you can deliver more reliable services. That means we can also go in Industry 4.0 application on campus networks.
And therefore, from the volume side, I would say, there are a lot of opportunities on 5 gs. Our industry must be now skillful in monetizing these 5 gs investments. It's only the ambition of Swisscom to get something more for 5 gs. I hope that our competitor will behave in the same way that we can charge better prices for 5 gs than for 4 gs. Regulatory update.
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So the revision of the Telecommunication Act, if I look to the most important topic for Swisscom, it was the regulation of fiber to the home was is actually in our favor. So there is no regulation on fiber to the home. So no extension of regulation in the Swiss market in the wireline market. There are some regulation on roaming, but the impact for Swisscom will be negligible. You know we also introduced now our Roam Like Home Offer in Switzerland.
So actually, we are through this. And I don't think that the impact on roaming will be big. And all this regulation will not come before 2020. So in 2019, there will no impact from this revision of the Telecommunication Act. I would say good news from the regulatory side.
If I go to our customer value management, we already touched it. I think I can go very fast over it. You can read it in the airplane if you are traveling back. But some words to our to the advantage or to the impact of IN1, you see that we are able to decrease the churn from 7.5 percent to 5.4 percent. And if you calculate this up on the whole portfolio, you see that the customer lifetime value is going up by 5 years.
I think it pays out. We have a small impact on ARPU if you go in a quadruple play offer. But on the other side, we have an increased customer lifetime value. And at the end, it pays strongly out this migration to in 1. Some words to our retail strategy.
In the B2B in the B2C market, we had always a strategy where we gave some hints to the market. We introduced in 2012 Infinity, the first flat rate offer for Switzerland. Then in 'fourteen and 'fifteen, we included a part of roaming. And each time we get a positive momentum, in 2017, we introduced InOne. And now in January, we announced our new product portfolio, in 1 mobile GO, where we have a flat rate offer for Switzerland and whole Europe.
And roaming is becoming more important. 10 years ago, roaming was not so important. But today, you have a smartphone. And if you go outside of your country, you want to use your smartphone as at home. Serving is extremely important.
And that's why we are convinced that including roaming is the right time now where we can gain additional momentum in the market. You see here the portfolio. So it's not only in1 go. In1 mobile go is our main product. But beside, we have also another areas of the product portfolio.
We have a premium, we have a basic. And then for the ones who don't want to have roaming included, we have a Swiss proposition. So we are convinced that we have a good attractive product portfolio, And we will begin to have the marketing on it to sell it at the end of February. And if I look to the reservation list, I'm quite optimistic that we have a good momentum, Dirk. The question is now what is the impact?
So we will have a kind of impact on the revenue because it's we have a debundling. We also debundled the handsets. That's why we will have an impact on top line, but not on EBITDA. On EBITDA, we will be neutral because we are able to save some subscriber acquisition, some subscriber retention costs. This is an outline of our multi brand portfolio, and you see also the positioning of the different brands, value on the Swisscom brands and the more price competitive positioning on our second and third brands.
And this product portfolio works. So we have a good momentum on the second and third brand product portfolios and a stable situation on our Swisscom portfolio. Swisscom TV is our hero product in the wireline market. That's why we developed this product in a, let's say, quite in a monthly way. We improved the customer interface, the usability, we improve our content portfolio and this at the end pays out to a higher market share and also increasing customer base.
I'm optimistic that we are able to get a strong position in the TV market even if the TV market is turning more in an OTT market as we see it with Netflix and so on. Netflix is currently integrated in our product portfolio. And you will have a coexistence of a TV platform, linear TV, with a lot of nice functionality and OTT applications. We also entered the e sport market, so we will build up Swisscom Hero League in Switzerland. Esports is a very popular topic today.
And not only for the young people, that's interesting to see. Also for Mario, he's also a gamer, normally with the figures and not with esports. But it's a broad it's really a broad topic, esports. And that's why we introduced the Swisscom Hero Week. SME market is an important market for Swisscom.
We have strong market shares in the SME market. And we have a very strong distribution network. We have a broad extensive partner network, and that's extremely important for the go to market in the SME market. We are strong in connectivity and we have still a quite untouched space in the ICT business. That's why we began to enter last year in this market, and we have now a very good momentum also in the ICT business in the SME market.
There is potential to grow. On the big corporates, on this slide, you can see what is our product portfolio. You see it's much broader than connectivity. So we are a full service provider in the B2B market. You know it, we are doing approximately 50% with connectivity, and the rest we are doing with IT solutions.
So it shows that we are really we have a fragmented business in this B2B market and the ICT business is actually and solution business is the growing part in this area. Cloud and security are growth dimensions. The connectivity business is under pressure as you have saw it during the financial figures when I showed the financial figures. So you see that we lost in the wireline and wireless market through price reduction. It's price driven purely price driven.
We don't lose market share, but we have quite an aggressive competition on pricing. On mobile, it's Sunrise who tries to attack the market. They don't get they don't gain market share. Sometimes they take customer from us, sometimes we get customer from them, but price level is coming down. And then on wireline, we have we are facing more with price competition from UPC, where on the MPLS networks, and this actually leads to this price pressure in the service business.
This price pressure will continue also in 2019. I don't think that it will accelerate, but it will continue.
On B2B,
wireless, I already explained it, kind of goes through. And maybe on the solution portfolio, that's the ICT business the B2B market. You see in what areas we are in. So we are not only connectivity, we have cloud solutions. We have and we are also awarded office.
We have the broadest cloud portfolio for corporates in Switzerland. It's a hybrid product portfolio. We have our own enterprise cloud, which is operated out of the data centers of Swisscom. And then we have also solutions from Amazon or Microsoft, where we are in a reselling and system integration role. So we have a broad product portfolio on cloud to deliver all the demand in this B2B market.
Security is growing. That's clear the complexity of security is increasing. And so there is a trend to outsource security to companies like Swisscom. And on banking, we are a strong supplier for ICT solution in the banking market. We had some price pressure also in the banking, but long term banking is an interesting segment for Swisscom because the financial industry, you know it better than I, is under strong financial pressure.
And that is actually a big opportunity for a company like Swisscom to get additional outsourcing or IT business. Healthcare market, this is an interesting market. The digitalization of the healthcare market is still underdeveloped, and this is an opportunity for a company like Swisscom to digitalize the hospitals and the whole ecosystem in the healthcare market. Now you see we have a broad product portfolio on the solution side. I skipped this.
Service is also very important in the B2B market, and it's not so easy to build up a decent, very good customer service in the B2B market because you need incident management, you need a lot of technical skills. Swisscom has certainly a USP on the customer service side in the B2B market. And on this slide, some remarks to our operational excellence. You see on which pillar we are working to get this €100,000,000 plus cost savings per year. I don't want to go through.
It's not only workforce. There is a lot of optimization, digitalization, which bring us lower costs. Now on CapEx, it's the same. It's, I would say, 5% inspiration, 95% transpiration to increase the efficiency, but that's important to do. And some words to our growth opportunities.
That's these are the growth opportunities in our core business. And very simple said, it's about share of wallet and upselling through a lot of different initiatives. Multi devices is 1, entertainment proposition, another topic. Our cloud solutions, we have application, My Cloud, where you can store all your different content. So a lot of different actions to work on this revenue or ARPU.
And actually, in the next years, that's the biggest growth potential which we have. In B2B, I already explained it. It's more about IT, it's about cloud, it's about security and then with 5 gs on campus networks. We are here in a very good position with all our IT capabilities, which we have. On wholesale, that's also certainly a market where it can gain some momentum.
You see some of our customers in the wholesale area. It's not only on MVNO, it's not only on fixed taxes, it's also for OTT players. So now I would like to hand over to Alberto for the Fastweb part.
Thank you, Urs. Welcome, everybody. Good afternoon. I guess I have also a little bit more minutes maybe. So as an Italian, I will take it.
Okay. I think that 2018 has been a tremendous year for Fastweb. And the good thing is that we were able to achieve growth in every segment we are in. Specifically, if you look at the B2C, we hit almost 4,000,000 subscriber. We now also in the future, we will as convergence will become more and more important with some fixed and mobile customer.
If you go in details and look at fixed, we now reach almost 2,600,000 broadband customer. What we like to see actually is the growth of the ultra broadband customer normally as Fastweb. Quarter after quarter, we try to push just ultra broadband customer. Those are the customers that we think are the best customers. And clearly, there is someone inbound that comes and wants a broadband connection we connecting.
But our focus is on ultra broadband. The good thing also that we are reaching almost 60% of ultra broadband penetration. So I think that our strategy to push on quality to satisfy customer needs as best is perfectly in line with our expectation. On mobile, very good year. We will talk in a second, but in the annus or rebilis of mobile in Italy or at least that's what experience our competitor due to the yard entry, we recorded the best year ever for our mobile revenues.
We reached almost 1,500,000 customers with a 30 percent penetration in convergence. Another important pillar, which also Urs mentioned, which is very important for Swisscom, but is also important for Fastweb is the customer satisfaction. And we are definitely leader for so many years in the Net Promoter Score in the fixed line. And we have a huge gap versus the 2nd operator. The good thing also that our the perception of our customers visavis also our mobile services is very, very high.
And we were able to now have similar NPS score, Net Promoter Score on mobile. As I said, similar to the top performer in the mobile space. Very good, so the B2C. For B2B, I would say also another year of solid growth. The revenue were up 10%.
And I think that also here, we grew nicely on the public administration, on the private. And also if I look at the services not just at the segment, I think that also we are very good to exploit growth on the value added services, namely data center. We acquired new top customers, but this is something that we are used to. Banco BPM is within the top 5 banks in Italy. A2A is also top 5 in the energy.
Here, we are now we overcame 30% market share, and this is something unique. You will not find any attacker anywhere that has reached such market share in the enterprise. And also the reason that we have reached such market share probably relies on the quality of our services because here the Net Promoter Score is 60%. There are, I would say, probably 10 companies in the world that can exploit 60% Net Promoter Score in a specific segment. Also wholesale has been very, very good, especially in the as expected in the second part of the year.
The revenues were up 11%. And definitely, this is the we will see in a second, but this is the time to connect with dark fiber the VTS because otherwise 5 gs will not be possible. And we have a very good network fiber extended network to serve our customers. In the future, we do see a lot of opportunity also in wholesale access services. If it comes to the network, here are other good news because we were able now to secure also a very good fixed wireless access footprint because now we have 6,000,000 home that we can cover with fixed wireless assets over 800 BTS already available.
This is a very good step forward for us because we will be able to deliver Giga performance is in area that today we are called white areas. And that's an important, I think, competitive advantage that we will exploit in the future. Overall, we are hitting almost 50 percent coverage with our own ultra broadband, but this is something that is in line with our fiber strategy since many years. Good news also comes to from 5 gs. Also there we will see in a second, but we were able to position now faster also in the 5 gs space with a solid position because we have now very good package of 3.5 giga frequencies and 26 giga frequencies from the auction.
And we are definitely ready to start the rollout. Actually, we already started to do the rollout. This is in it was in a nutshell the 2018. So very, very strong year 1 of the best in our history. If we go in details in the financial, as I said, if I look at the revenues, revenues grew 8%.
The good thing that the growth, as I said, was basically coming from each market because consumer went up 7%, enterprise 10% and wholesale 11%. EBITDA grew 6% organically and also this is a very good result. The difference in growth, 8% revenues and 6% EBITDA, relies on the fact that especially on the enterprise, we are broadening our offer to ICT solution, to security solution that clearly have lower marginality if compared with the pure connectivity type of services. In terms of CapEx, if we don't consider the money that we spent for the frequencies, I would say that we are more or less in line on what we spent with last year actually sorry, 2017. Also what you will see in the future, I think that Faso will continue to invest similar amount of money.
And what will change is that fiber will be decreasing in favor of 5 gs gs investment. As a consequence, with margins that are growing and CapEx that are stable, our organic operating free cash flow basically doubled year after year. And we hit more than €80,000,000 if compared with the €40,000,000 of 2017. So if I look, as I said, operational was very strong. But also if I look from a financial point of view, I think that we did achieve a very good year.
It's also good sometimes not always to talk in 1st person, but also to refer to 3rd parties. That was a report from Mediobanca that certifies that in basically in the 4 years from 2013 2017, definitely Fastweb was the one that was growing the most in terms of revenues that was investing clearly as percentage of its revenues the most and also that was expanding the most the network. That was referred to Italy. But also if we look bigger, broader to the big five market in Europe, So Germany, U. K, France, Spain, clearly also Italy.
We are the company that if you look at just the telecom and organic growth, we are the company that grew the most in all Europe in the same period. So again, I think that's something that we are proud of. If I look at our network, as I said, we do confirm all our fiber footprint and strategy. So we definitely we are covering 8,000,000 household with our fiber, let's say, network. What is will change our future landscape is the fixed wireless access because through the acquisition that we made of these tele frequencies, we also acquired the fixed wireless access network And we will be able to exploit such network.
We will upgrade this network rapidly to 5 gs and this will be a fundamental pillar for our strategy, as I said, also in covering areas like white areas that will contribute to us significantly and where we will build a very strong competitive advantage. If we think to the 5 gs for Fastweb, this is a tremendous opportunity because 5 gs is not the evolution of 4 gs. 5 gs is a technology that stays between, let's say, fixed and mobile. And specifically, in 5 gs, you can do point to point fixed wireless access type of connection that will be extremely, extremely powerful. With the 26 gigahertz type of frequencies that we have, we will be able in the future to exploit giga connection.
And that's an important, let's say, step forward, especially for Fastweb in areas where we don't have directly the fiber network. And as I said, a company like Verizon, for instance, in the U. S. Launched exactly this type of services. They launched in cities like Los Angeles, Sacramento, Indianapolis.
And after 5 months of operations, basically the average connections ranges around 800 mega megabit, sorry. So it means that in the future, 5 gs and this type of use of 5 gs will change significantly the customer experience and also the future operations of our company. Coming back for a second now to the B2C. I think that what is paying off, especially in this segment, it's not only the superior quality of our network, but also the positioning that we are consistently making of ourselves in the last 3 years as customer champion. We basically 2 years ago started to follow a super transparent strategy versus the consumer customers, which means, for instance, that they don't have any time obligation for the contract.
They can quit whenever they want if they are not satisfied without paying anything. If we publish or if we release new offer more convenient if compared with the past, they can switch immediately when they want to the new offer without paying anything. We are basically working a lot in making, as I said, super transparent our relationship because we do think that this is the correct recipe for the future evolution of the market. On top of that, we are really working on the product because we don't believe that just having giga connection will be enough. Operator should focus also on product and we are launching basically one every year a Wow type of product.
In the past, it was Wow Fi, our community of Wi Fi. Now this year actually, sorry, 2018, we launched the Wow space, which is an unlimited cloud for pictures, video that is, as I said, unlimited for all the customers that are choosing a mobile connection of Fastweb. And this is something that has been particularly, let's say, it was very much liked by the customers. We did 50,000 customer in new customer in several in 2, 3 weeks. That's extremely important because we do believe that in the future, the differentiation will come from product and quality and not from just connectivity.
Then as usual, we work also with our partners, ENI, which is the national gasoline company in Italy. The partnership that we have with them, we are bundling together electricity and gas with our broadband. Ultra broadband is doing very well. And basically in a year, we doubled the contribution to our overall quarterly customer. So I think it's a very good also growth engine for the future.
If we look at the, I would say, commercial performances also here, I think that for us is extremely important to continue to focus on ultra broadband where we had a terrific year plus almost 40%. It shows that Italy is super ready to go for ultra broadband. It's not true that we are always late. We are always the last country in Europe. I could rate this fake news.
And I think also in the future, we will see such explosive growth in Fastweb, but also in the market. If I look at mobile, I said, we are very proud in a year that has been a disaster for all our competitors. Because of Iliad entry, we recorded the best year in terms of revenues growth. But also if you look at the customer performance, we were able to grow basically almost 400,000 new customer. The other important thing is that clearly all the customers that buy both fixed and mobile has a much lower churn and specifically for almost 40% lower churn.
And since this number, the penetration, the fixed to mobile convergence penetration is increasing, clearly, the overall churn will benefit and this trend will be the trend also in 2019 and the year after 2019. If I look to corporate, here, as I said, very, very strong, let's say, year. But I think also you get used to such performances. Specifically, a lot of growth was coming from public administration and also from value added services. Value added services means cloud, data center managed services, security services, which clearly have different marginality if compared with pure connectivity.
But especially in enterprise, we are extremely proud to be really always at the edge of innovation. And this is something that is pretty much clear now in the market. Now we reached 31% market share in the enterprise market. We are actually accelerating the way we gain market share because it's a combination of 2 factors: 1, that we are very strong and also because competition, I think, is lagging behind. And this is true for enterprise, but I think it's also true for consumer.
Wholesale, which was one of the best contributor in the second half of twenty eighteen as expected. I think there is pretty much clear that there is huge opportunities, as I mentioned, as anticipated. 5 gs is now coming and 5 gs requires dark fiber backhauling. We in the past with dark fiber backhauled basically all the BTS of Vodafone. Now we started with wind 3 once with the Iliad ones and we are just at the beginning.
And they have plenty, the 1,000 of BTS that needs to be linked through fiber. And so we do expect also in the future a huge activities versus these type of services. But it's not only that because also in the future there will be new players coming in the wireline market. Some of them have already announced like Sky. Iliad is thinking about that.
We do think that for us it's a very good opportunity also to start wholesale the access. We are already doing it with Tiscali. And in the future, definitely, we will do for also other clients. We think that for us, at the end of the day, it's anyhow a value creation. So even if we are theoretically making some advantages versus our competitor, the fast food brand in the retail market is very, very strong.
And on the contrary, actually, we can exploit some wholesale business that anyhow someone other competitor would have done. So I think a very good business opportunity for us. This is, for me, one of the most important slide of the presentation, one of the the one that I'm proud of because here we are talking about Net Promoter Score. So customer satisfaction, so a way to measure the quality of our services. And as you can see, I think that if I look at the wireline, the fixed in the consumer space, there is a huge difference between us and the rest of the market.
And actually, this difference is increasing. And think that in the future, we will be able to reach much higher Net Promoter Score and continue this growth. In the mobile, that's another important topic. In the mobile, we are able now to be the top performer even if we are still now in MVNO because we will be MVNO in the future. And this is because it's a combination.
Clearly, the possibility to rely on the team network, which is a very good network, helps with the Net Promoter Score. But also in the Net Promoter Score, it's very important the niente come prima, the transparency approach that I described you before. Customers are not looking just at performance, are also looking in the way the supplier, the provider of telecommunication interacts with them. Finally, on medium and enterprise, as I said, here we have a market where we are growing and where we have a huge customer satisfaction with no, I would say, no competitor that can be even close to us. In the medium customer, we are at 40%.
And in the corporate customer, as I said, we are continuously surprisingly also for ourselves growing even if we work hard every day and 18%, 60%. All these numbers are telling you that the possibility in the future of having churn in the especially in the enterprise space is very, very, very limited because with such Net Promoter Score, no customers will abandon us. Finally, if I look then if I look at 2018, as I said, it was a very, very good year, solid, strong from whatever angle we see it, so from operational and from commercial and from financial. Now if you look at the future, 5 gs will be definitely for us an important pillar of our strategy. We do think that we have unparalleled assets because we have huge fiber network that can support the 5 gs.
In terms of frequencies, we are basically very close to the one in terms of 5 gs that TIM and Vodafone acquired and we have doubled the frequencies that Win 3 and Iliad got. So for a company that launched the 5 gs strategy 2 years ago is a very strong let's say, there's very strong asset to leverage. In fact, our ambitions are there because in the mobile space, we want to try for basically our market share hitting by 2022 5%. Wholesale, as I said, will be very important also in the future for us because we do see that there will be an acceleration in the dark fiber backhauling and also in the wholesale of assets strategy and there of assets or needs. And there also the ambition is to basically more than double our market share, our current market share, which is already very good.
It's you don't find anybody in any other country to have such market share in the wholesale market, which is typically an incumbent market. But our strategy is to go there and to double and to find our space. And finally, if I leave if I look at corporate, definitely, there is a huge possibility to continue to grow our market share and then the share of wallet. Because market share, because we are able to get new customer. The share of wallet because we are broadening our offer with security with data services much far beyond the pure connectivity.
Also there, we think that in 4 years, we will be able to hit 40% market share and overcoming TIM and incumbent. To do all this, clearly, it will be for us always key to deliver a significant free cash flow growth because as I said, we do see also in the future a constant growth coming from revenues and margins with CapEx that will be always in the regions that we experienced in the past. And so as a consequence, we will have the end goal will be a further cash generation. Thank you, everybody, and I leave the floor to Louis.
Thank you, Alberto and Urs, for your presentation. Let us stop, as indicated, the first part of the presentation here and have a 20 minutes break, so around 20 minutes. Outside this room, there is coffee and some cakes available, and the presentation restarts at 3 pm sharp. Thank you.
Okay. Welcome back, everybody. So first of all, I know it's not wise to object the CEO, but I have to make one point very clear. I'm not an esports gamer. My favorite sport is here in road cycling.
That has to be said, wolves. So let's come to the financials. Overall, the financial performance is in line with the guidance, and we are overall satisfied with 2018. The revenue like for like is stable at CHF11.6 billion. And on EBITDA, we have to do to make some adjustments on the 2017.
You're aware of the litigation we had last year. You have to correct the EBITDA by minus CHF102,000,000 and then we booked in 2017 the provision for restructuring. There, we have to add CHF61 1,000,000. And the same exercise on the 2018 numbers. We have to adjust for IFRS 15 impact, minus CHF 43,000,000 and we have ForEx impact and revenues or gain from sale of real estate of CHF 40,000,000.
So the underlying performance on EBITDA is for the group minus 0.8 percent and all the following explanations and comparisons are based on a like for like basis. On revenue. So the Swiss revenue went down by CHF250,000,000 and I think the bad thing on it is CHF243 1,000,000 are coming from the high margin service revenue. I will come later to all the drivers of that. The retail segment lost 3.2 percent or CHF 173,000,000 comes from service revenue.
I will come later, as I said to you, to the main drivers of this decline. In the enterprise segment, we lost 6.4 percent service revenue at CHF 70,000,000 and another CHF 24,000,000 in the solution business. I think the negative surprise in the enterprise segment was the performance in Q4 In service revenue, we lost there overall CHF24 1,000,000 CHF14 1,000,000 From mobile, we had there quite heavy price pressure CHF10 1,000,000 in the fixed line business, mainly coming from all IP migration. So as you all know, in the residential business, we are through with the all IP migration. 99% of all clients have been migrated to the All IP network.
But in the B2B segment, the migration is still going on. We stand there at about 75%. In the solution business, since Q3, we are losing revenues compared to prior year. We explained that at Q2 conference call. We lost one banking client and we had one big contract being renegotiated.
And overall, we lost in the banking CHF 42,000,000 in revenues. On the other side, we were able to increase revenues from cloud, security and hardware business. On wholesale, we have loss on inbound roaming of CHF 20,000,000. That's not a bad thing that's because that's compensating on the costs on the inbound roaming. And we had higher wholesale revenues, high margin wholesale revenues of CHF 15,000,000 And as Alberto explained, we have a strong growth in our Italian business, an 8% increase in revenues, reaching SEK2.1 billion.
And I think the important thing is that we were able to increase revenues in all three segments. A few words on the OpEx of Swisscom Switzerland. In the direct costs, we have a better performance on subscriber acquisition and retention costs. We have about €40,000,000 less subsidies for routers and TV boxes because we have had a big impact in 2017 coming from the All IP migration. We have about CHF 23,000,000 less cost for acquisition and retention costs in the residential business.
The out payments went down by CHF 44,000,000 I mentioned before because of less inbound roaming, we have a compensating effect here on the outpayments. We have higher costs for goods and services. There are 3 main elements. CHF 60,000,000 is directly connected to higher hardware revenues with no margin impact. We have SEK 50,000,000 additional costs for assurance material.
And in 2018, the costs for the spot content was around SEK10 1,000,000 higher compared to prior year. I think the important thing is the indirect costs. We guided for SEK100 1,000,000 saving. We reached SEK121 1,000,000. And on workforce, we are able to reduce personal costs by CHF 77,000,000 and external work costs by CHF 10,000,000.
And I think the main driver for the workforce reduction beside reductions in the overhead is coming from the call centers. We have 13% less calls in our call centers. That's because of stable products, stable networks and stable platforms. And also in the field force, we had 7% less intervention. Main reason is because your IP immigration is more or less through.
And on other costs, we reduced those by €34,000,000 50% is coming from IT costs. On EBITDA, on EBITDA in the Swiss business, we lost CHF137 1,000,000 And in retail business, the reduction is 3.1 percent or close to CHF100 1,000,000. So we saw before that service revenue declined by over CHF170 1,000,000 EBITDA by only CHF100 1,000,000. That means the difference is cost management. It's the same situation in enterprise customers.
There we lose 8.2% on EBITDA level, reaching 600000000,000,000 and there, we have the same we can part of the reduced service revenue compensate on EBITDA level. But again, we have the highest negative impact on enterprise customers in Q4 with CHF 25,000,000 coming from the before explained performance in the service revenue. On Fast Wrap, 6% growth. As expected, we had a very strong Q4 in wholesale, in high margin wholesale business. And in the segment others, the plus 62 €1,000,000, there we have the following composition.
€32,000,000 come from reconciliation from pension costs, IAS 19. Then we have reductions on the headquarter of CHF 10,000,000 and another CHF 10,000,000 are coming from a sold company from the Public Group takeover. We sold this company at the end of 2017, and this improved digital company produced losses of CHF 10,000,000 in CHF 17. Therefore, it has the positive impact. A few words on the underlying changes of the Swisscom of the Swiss business.
So you know this slide from the earnings calls. And I think all drivers developed as expected except the B2B business. So fixed line loss, that's structural driven. I think we had the peak in 2017. This year, the negative impact is CHF64 million.
We expect a lower negative impact in 2019. The same for roaming, CHF 20,000,000 negative in 2018. I would say in 2019, the impact is close to 0. Even with the new portfolio where Rome is included. On convergence, we saw the peak also this year.
Well, we saw the peak this year with a negative impact of CHF 85,000,000. And there, we expect this impact to slightly soften in 2019. And in B2B, we expected CHF 50,000,000 to CHF 60,000,000. And for the reasons we explained before, we stand here at CHF 97,000,000 before the cost reductions. I would say this impact in 2019 will be slightly lower than this CHF 97,000,000.
And the cost savings, we discussed CHF 120,000,000. And for 2019, we expect CHF CHF 100,000,000 which is part of our 3 years cost saving program. Below EBITDA, there is nothing special to report. We have more or less stable depreciation with a €20,000,000 currency effect from Italy. Net interest is €21,000,000 lower compared to prior year because of the low interest area, and we did quite successful refinancing.
And the tax rate is at expected 20.6%. Net income lands at around SEK 1,500,000,000 or 4% below prior year. Few words on CapEx. In Switzerland, CapEx were slightly below 2017. If you look at the composition, wireless network, around CHF 310,000,000.
There, we invested CHF 36,000,000 more than prior year. That's the preparation for the 5 gs rollout included, the first preparations. In FTTX, we invested close to CHF 500,000,000 in line with expectation CHF 21,000,000 more than 2017. And we had some savings on IT systems, all IP, etcetera, where we invested CHF324,000,000 around CHF 100,000,000 less than the prior year. In Italy, net of the spectrum we acquired, the CapEx are more or less stable.
And the amount for the spectrum in Italy, Israel is €64,000,000 On operating free cash flow, we have quite an odd picture on net working capital. Maybe a few words on that, on the change on net working capital. In 2017, we had an increase in trade payables of CHF 120,000,000 and the booking of the provision for restructuring of CHF 50,000,000. That gave a positive impact in net working capital of CHF 184,000,000. In 2018, we had it exactly the other way around.
So we had to pay these provisions. So we had a decrease of provisions of CHF 57,000,000 and we had a decrease of the trade payables of CHF 95,000,000. So there's no structural effect on the free cash flow generation. If we balance out this swing in net working capital, we could say operating free cash flow in 2017 would have been CHF 100,000,000 lower and in 2018 would have been CHF 100,000,000 higher. So no structural effect, just this change in net working capital.
And I think we can skip this slide and go directly to the shareholder return. Urs mentioned it already. If someone invested 20 years ago in the Swisscom share, he received a total shareholder return of 5%. Overall, these 20 years at the stock market, we distributed SEK 32,000,000,000 to our shareholders under different titles, ordinary dividend, power reduction and also share buybacks. And our financial policy is unchanged.
We aim for a predictable and stable dividend. We want to maintain a single A rating. The unadjusted leverage at the year end stands at 1.9. Also before IFRS 16, and you are aware that the maximum level given in the strategic objectives from the government stands at 2.1. So we have enough room.
Our debt portfolio. I think we have a well diversified debt portfolio of the CHF6,500,000 you see on this slide. The average interest rate is at 1% and with a fixed 74% of the portfolio is fixed. So we are well protected against any potential into SAIC. A few words on IFRS 16.
So this new standard of leasing is effective from January 1, 2019. So the lessee has to recognize a right of use asset on the one side and a lease liability on the other side. And the reported EBITDA goes up because the distinction between operating lease, where you book everything in OpEx and finance lease, where you book in depreciation and interest expense, is disappearing. So everything is treated like finance lease. The impact of this new accounting treatment is neutral, more or less neutral net income and 100% neutral on free cash flow.
But the future higher lease liabilities are leading to higher net debt, of course, and higher interest. So our reporting approach will be the following: no restatement of 2018 figures. And in 2019, we report the EBITDA without lease expenses. And we give you all the details on the lease expenses below EBITDA. So we fully disclose that, that we have the full comparison.
And your outlook, to which I will come later, includes the new IFRS 16 requirements. And what are the financial implications of this new standard? The reported EBITDA goes up by around CHF 200,000,000 Net debt will go up by around CHF 1,300,000,000 and the leverage, the adjusted leverage, stands at CHF2.0 billion. So we do not expect an impact on credit ratings because these operating lease contracts were fully transparent to the rating agencies, and they adjusted already for these contracts. So some words and explanations on the guidance 2019.
You see that the revenue we expect is at around CHF 11 point €4,000,000,000 the EBITDA more than €4,300,000,000 and CapEx for the group of around €2,300,000,000 The EBITDA number includes a positive impact of IFRS 16, as mentioned before, of CHF200 1,000,000 Free cash flow proxy of around CHF 2,900,000,000 is as reported. If you take out the CHF 200,000,000 IFRS 16 impact, we land at CHF 1,800,000,000 which is more or less the same free cash flow generation as in 2017. Some flavor on the different components on this guidance. So the revenue Swiss come without Fastweb will be at around CHF 9,000,000,000. That means a revenue decline of CHF 300,000,000, which might look a little bit high for you.
We have the following main components, just the main components: Fixed line loss, I gave you the details before, less negative impact than in 2017. Conversions, lower than 2018. We saw the impact at the peak already. Roaming impact, practically 0. And the B2B impact slightly better than 2,000 negative impact slightly better than 2017.
Despite stable market shares in the B2B business, we don't lose SIM cards. If I look at the in and out portings, we don't close SIM cards. It's just the price pressure within that market. These and on the other side, we have a positive contribution from the wholesale business. You are aware that UPC mobile business is coming to our network.
And these five effects have a direct impact on EBITDA because that's high margin business. Then we have an impact from the new mobile offering. This debottlenecking effect from the new mobile offering will be in the area of negative €60,000,000 to €80,000,000 on revenue. But that will be EBITDA neutral, thanks to compensating lower subscriber acquisition costs and some IFRS 15 impact. And then, of course, in this new portfolio, you always have the risk that at the beginning, you have some customers who can optimize their actual subscription.
That's the risk of every new portfolio. EBITDA Swisscom without Fastweb, we expect less than CHF3.6 billion. The negative impact from the top line, which we just discussed, will be partly compensated with cost savings of around CHF 100,000,000 CapEx Swisscom without Fastweb at around CHF1.6 billion including 5 gs rollout, but of course, without any spectrum costs. Few words on Fastweb. So Fastweb will be able to slightly increase revenue in a market where we see, and Alberto explained it, where we see overall declining revenues.
The growth rate will be lower than in 2018 because we saw some nonrecurring low margin business in 2018, hardware and flash fibre revenues of around CHF 100,000,000. At EBITDA, we expect an organic growth of around 5%, thanks to a better revenue mix and also thanks to efficiency gains. And CapEx volume will remain stable at around SEK0.6 billion, and that means Fastler will also have a growth on free cash flow proxy. And if we meet all these targets, we will again propose a dividend of CHF 22 per share to the AGM. With that, I hand over to Urs for some final remarks.
Good. Thank you, Mario. Some short final remarks. What are the business tendencies and what is our focus in 2019. So the first point is certainly to have a good value management on our B2C customer base.
That means on the product side, in one, making a good fixed mobile penetration, increasing the share of wallet and also gave a good momentum with our new product InOne Mobile Go. That's certainly the important topic on the retail market. The fixed Swiss fixed trends will slightly improve, as already Mario mentioned. And we have certainly also some potential to gain market share in the broadband market. With the increased footprint of ultra broadband, we can gain market share from cable operators.
Operational excellence will be crucial. We have all the actions in place, and we are working on it. So we are confident to deliver this cost savings of SEK 100,000,000. And then we will work on new revenue streams in the IT space, wholesale space, but also on the value added area in the retail market. More for more is the approach where we have here that means leveraging our customer base, which is a loyal leveraging on this with value added services.
And then Fastweb, Alberto already explained it. We are confident to further increase the penetration or to have a growth on broadband. And there are business opportunities in the B2B market and the wholesale market, so that we will have a growth, as Mario already mentioned it, on EBITDA level in Italy. What is our credo? I think that's important to know what actually what we are working on to deliver a reliable cash flow, to have a solid shareholder return.
For this, it's important to stabilize our top line. The measurements or the actions are actually on the way or in place, but this service revenue decline, which we had in 2019 'eighteen, we have to flattening it down. Working on the cost level, that's the second very important topic. And then through a technology mix to improve our CapEx efficiency that we can do the same with less CapEx. And you see that the guidance for this year is 2,300,000,000 and last year, we had CHF 2,400,000,000.
We don't actually reduce our ambition on the investment side, but we do it in a smarter way. So that's a bit our credon for 2019. And now I would like to hand over to Louis.
Thank you, Urs and Mario. Now it's time for the Q and A session. And as previously indicated, our 2 other guys from the management, Dirk and Urs Lehner, if there are specific questions, may support. Two points, may I kindly ask you to use the microphones because there are also people being on the cast, so they can follow our discussion. And second point, if you have a question, please let us know the name and bank you're representing.
So who can I give the first question? Georgios?
Georgios from Citi. Maybe a couple of questions. The first one on Slide 57 where you show us the different moving parts for the guidance for 2019. One of the things I was wondering is the MVNO agreement with UPC, whether that will have a meaningful delta and maybe offset by something else? Because I didn't see it in the main drivers that you showed there.
And then maybe a question. There's been a I remember last year, there wasn't a single question on enterprise. I think today, there will be more. There are some rumors that 2 of your competitors may get together and form a more integrated player. In the B2B side, can you give us an idea of whether that really changes the dynamics around how the bidding works between the different contracts?
And then maybe a very quick question on Fastweb and around the BT Italia situation. If someone were to buy BT Italia, I understand they get the chance to bid for some of the public administration contracts that come available without potentially changing some of the dynamics in the market?
Okay. Morje? I can give you the answer on the amino contract and the impact on the guidance. So first of all, we don't disclose the numbers on the UPC contract that we cannot do. And the impact on the guidance, we gave you the main drivers.
And also in 2018, we had one line all other. So we cannot guide every each and every element. So but therefore, you can assume it's limited to positive impact. It's material, high margin, but limited.
Thank you, Mario.
Urs? Yes. The first part of this B2B question, and Urs will then give some more flavor on it. If Sunrise and UPC would merge, they could do some connectivity bundled offers, but they still don't have the ability to do IT business. So we are much, much broader in our footprint.
So I think we can handle such a merge in the B2B markets and that wouldn't actually increase the pressure for us because already today in the connectivity side, normally you have an RFP on mobile and you have an RFP on MPLS. So this will not change the dynamic. And for the big IT business, they actually today, they don't have the ability to compete with us. There would not be big changes. But Urs, what's your
view on it? I fully see it the same way on the mobile side. I don't see additional competition due to such a potential move on the wireline side. We anyhow have a strategic transformation towards SDN, which is ongoing over the next years. Also, therefore, such a move wouldn't change the landscape for us from a competition perspective point of view in a fundamental way.
And as mentioned, we are more than sure that we are strong in our overall offering towards IT. These are not our main competitors in this field. They are not visible in the enterprise market for larger IT services business. So therefore, as mentioned, we I don't believe either that it wouldn't change the dynamics a lot on the B2B space.
Thank you, Jorges. And then
the last part, Alberto? Yes.
If I understood correctly, the question was related to the possible sale of BT Italia and on the fact that BT Italia won a piece of the contract with the public administration. I would say that from what is concerned us, honestly, we are just focusing on our organic operations. Remember that Fastweb, along the years, have been able to won a lot of, let's say, bid related to the public administration. Connectivity, the one that BT won is just a little piece because then in the years that we had voices, we had IP telephony, we had security, we had workforce management. So I would say that the position that we build with the public administration is very, very strong.
And most importantly, as worried So we are not really let's say, we are not worried at all on the result of this process. At the end of the day, I think that the competition will not change in our position. And most importantly, in the corporate will not in the corporate space will not be weakened.
Okay. Thank you. Jacob, second line.
Hi. Jacob Bluestone from Credit Suisse. So got two questions, please. Firstly, to prove Georgios right, a question on Enterprise. And then secondly, a question on the balance sheet.
On enterprise,
I was hoping you could maybe give
a little bit more sort of clarification of why you don't expect a further deterioration over the course of 2019. I mean, if I look in your annual report, it says that incoming orders in the enterprise business fell from 2,700,000,000 to 2,500,000,000 over the course of 2018. And I guess that's an 8% drop. Your revenues fell 4% in enterprise this year. So I mean, just sort of treating the orders as a leading indicator, and it wouldn't that suggest that things actually would get worse.
And I guess also just the fact that you exited with Q4 being under pretty heavy pressure. So just if you can maybe explain a little bit more why you don't think the enterprise business will deteriorate and if anything, will actually improve from the Q4 run rate. And then secondly, on the balance sheet, I think you've got about 1.8x net debt to EBITDA. I think you have a target of 1.9 times. You've got the spectrum auction coming up where you'll presumably pay something.
You've got IFRS 16. You've got EBITDA, which is declining on an underlying basis. I was just wondering, can you maybe give us a little bit more sort of comfort on why you're comfortable with leverage and you see the dividend being sustainable given that it sort of feels like you're sliding slowly towards the upper end and maybe even beyond your sort of 1.9 times leverage target.
So just
sort of any clarification there would be useful as well. Thanks.
Thank you, Jacob. I think the first part, the B2B is question for
Urs. Sure.
So the link from order entry to turnover we've been they have to, let's say, lay out a little bit the structure of our order entry. So usually, we count order entries which are relevant on a TCV basis up to 5 years. So there is no short term link by definition from an order entry perspective towards just one annual
revenue piece.
That's one element. The second one, we had in 2017 a very large contract, which was re signed in December. We had a very large contract, which was re signed 3rd January 2019 as being a game of 2018. So having said that, I'm pretty convinced that, let's say, we have a very stable order entry, which is also looking very good from a site sales pipeline perspective point of view for 'nineteen. So I don't have any intention.
That's one. That this should be worried. On the second one, we are learning also that order entry in a consumption based model in cloud business, and it is not always directly related to revenue, and there we are working very hard provide revenue. And there we are working very hard that, let's say, we get better in the allocation of revenue out of order entry in the cloud transformation and that there I'm pretty convinced that I don't see an additional drop, as Mario explained already, in 'nineteen.
Maybe two remarks from my side, just to underline what Orest said. The order entry is not directly you can't correlate it directly with the revenue development because if you make a contract extension or renewal, it's also order entry. And a lot of contract renewal at the end is not good for the turnover because normally you have lower prices. So it's you can't just correlate order entry with revenue development. And we had a good order entry also in January, as you told it.
So and we have a very good win ratio. We have a win ratio. What's the win ratio?
On volume base, it's in the high 70%. So almost CHF 4 or CHF 5 that we are offering, we are winning.
And then on the connectivity side, we have now all IP migration is at the level of 75%. So that means also the hit on fixed voice should be lower.
Thank you. The balance sheet? The balance sheet.
On the balance sheet, so in 2018, we slightly reduced net debt by CHF 50,000,000 and the ratio was 1.75 compared to 1.73 in 2017, so only a slight increase. I don't we really don't care about the IFRS 16 impact because that's included in the ratings. And if I look at on the spectrum auction, this impact, we cannot give you any details, but just I always explain it the same way. One indication is 2012. There was a lot of spectrum on the market, and we paid CHF 360,000,000.
That's less than CHF 0.1 leverage. I think the more important thing about how we feel comfortable around the dividend is the free cash flow production. There, we have the same free cash flow proxy of SEK 1,800,000,000. I see a maximum amount for payment for interest and taxes of around SEK 400,000,000. That means we have SEK 1,400,000,000 free cash flow and the dividend sum is CHF 1,140,000,000.
And there is enough room for some deleveraging or for some small M and A activities. So we as a management, we feel quite comfortable that we have a good dividend coverage, and there is enough room in the balance sheet.
Thank you, Mario. Guy?
Thanks. It's Guy Peddy from Macquarie. Just one quick follow-up question on the IP side. Can you talk about whether we should start to see any cost savings come through in 2019 from the fact that you're going to be reducing the amount of duplication you've got in your networks? And looking forward in CapEx, how much is the move to can you actually quantify how much the move to IP has cost you from a CapEx line?
And when should we actually start to see that come through? Will it be 2020 before we start
to see that?
Good. On this all IP migration, TDM phase out, in 2019, we will be able to begin with some phase outs and but the impact will be more in 2020 where we can switch off more equipment. And this will be part of our whole saving plans. On the CapEx, we don't need actually new CapEx to do it because we have actually done the investments for this IP infrastructure.
Sorry. Perhaps my question was confusing.
I understand you've done the investment for the IP. But obviously once you've moved to IP you don't have to repeat it. So is there an element of your CapEx budget that will fall away once you've actually moved to IP, I. E. Or will it be allocated to something else is what I'm trying to get at?
Yes, sure, sure. The whole CapEx mix will change over time. If we make a guidance of SEK 2,400,000,000, the mixture of CapEx is another one. We will have we are now strongly investing in the access network and then this is slowing down and then we will invest more in 5 gs. And these IP investments are not actually the biggest part of it.
So you should you can think that our CapEx will stay for the next years in this region where they are or maybe midterm slightly trend down, but that's also driven by competition, how we see the competition in the fixed business.
And then maybe to add, these IP investments were included in the maintenance CapEx. That's around CHF 1,500,000,000 in the CHF 1,600,000,000 of Swisscom Switzerland. And there, there goes a lot of CapEx in the transport networks just for more to handle the capacity. And we expect those maintenance CapEx remaining stable between €400,000,000 €500,000,000 as it was in the prior years.
Thank you. Next question, Usman.
It's Usman Ghazi from Berenberg. I've got three questions, please. The first one was just on, again, enterprise. I guess, in other markets, I'm just thinking about the Netherlands, where, again, you've got 3, 4 high quality mobile networks. You had a situation where the SME market in particular got very pressured by the mobile only challenges where I guess there's less demand for bundling ICT with connectivity.
So how do you see that evolving in Switzerland? The next question was just on 5 gs, particularly Sunrise has spoken about offering 5 gs fixed wireless access in rural areas and then migrating or cost savings potentially from wholesale fees to their own kind of 5 gs network. So I mean is this a real risk that you see or is it just technically not possible what they're saying? And then the final question was just on 5 gs again. I mean given that your competitors seem to be distracted by deal making, etcetera, was this not the time to step up the CapEx, gain the advantage in 5 gs deployment and extend that network perception gap that might have been lost in the 4 gs world as Sunrise has managed to at least from a network ratings perspective, they managed to catch up to Swisscom?
Thank
you. Thank you. It's not I'll take the 5 gs questions and then Urs can take this enterprise question or SME or Dirk you can take the SME question. Otherwise, you have nothing to do here. Okay.
I think good.
Good. On 5 gs, fixed wireless access is you will have a niche in the market where you have a substitution from Internet. But the majority of the market will be in a co existent. I don't believe that fixed wireless access would really make a big substitution of the Internet. If this would be the case, why wouldn't it be already today?
We have if you go to on the Swisscom mobile network, you will see that you have speed in the area of 40 to 50 to 200 megabits per second already today. Actually, you could do it already today. And the mobile is a shared medium. If you have more load on it, you don't have the speed. The reliability of an Internet access much higher than on a mobile access.
So you will have a niche, but not the majority. So that would mean that Sunrise, in my view, will not be able in Switzerland. And Switzerland and Italy is another topic because Alberto mentioned the fixed wireless access strategy in Italy. I'm not afraid that wholesale revenues. Then the second point on 5 gs, to increase actually the network advantage of Swisscom.
These tests, we shouldn't overestimate all these tests. Connect you should once go to the Internet and looking where KONNECT is measuring. KONNECT measures only in cities and some access. 60% of the calls or data sessions are done inside in house and all such things are not measured in this test. And Swisscom has a better network, I'm confident.
But you are right, we will try to increase our advantage on 5 gs. And that's why we have an aggressive rollout strategy on 5 gs.
Okay. SME?
Okay. With respect to SME, we are pursuing a total offering strategy that includes fixed and mobile, but includes connectivity, communication and IT as a new space to come into. Connectivity then is obviously, as I say, mobile, but also then to the different locations that any businesses would have, which in many cases, not only one location, but several. And we are offering cloud produced solutions there. I mean, the keywords are the network function virtualization and so on and so forth that allows nowadays also small businesses to profit from features that otherwise would be for corporates like VPNs, bringing the mobiles back into the business, management of LANs and wireless SSIs and so on and so forth, all set in a very cost effective and scalable approach.
So it's just not like providing a SIM card. It's like a total connectivity solution. The same is true for communication, where it's just not any longer like a phone that you put on anybody's desk, but it's like also a converged solution, be it a phone, a smartphone, be it a PC, laptop, whatever, there's a program that goes beyond just communication as voice would be, but data exchange, collaboration, productivity tools and so on. And then lastly, on IT, we're providing the entire bit from the operating system and the equipment on-site, but then obviously also a big part of it is cloud produced with server infrastructure backup and so on and so forth, yes? And every business needs that.
And every business these days, let's say, is also in a transition from on premise IT into cloud IT. And every business asks itself, how can I be more competitive, more cost effective? How can I profit from digitalization and that is basically what our proposition is? So it's like a 3 60 degrees proposition that goes way beyond just handing over a SIM card. And the world is a bit more, I wouldn't say complex, but is a bit more richer and a bit more of opportunities for these small businesses.
And which is why also then the others can just not easily replicate that with running around and offering a couple of SIM card connectivity. That is not doing the trick.
All clear. Thank you. And Josh, next question.
Thanks. It's Joshua Mills from Goldman Sachs. I had a couple of questions on enterprise and then one on cost cutting. So firstly, on enterprise. Marie, I think you said that, that was the area that surprised negatively this year.
And I
just wanted to ask,
was that because of the extent of competition? Or is there anything in there from the fact that some of these higher growth new solution businesses maybe aren't as profitable as had been initially expected? Or is it just the competition? Following up on that point, I think if we look to other telcos, so KPN, for example, has recently said we don't want to focus on non profitable revenue growth. And I think in the presentation, you've laid out areas where you can grow revenues, IoT, security, etcetera.
But out of interest, are there any areas which you've consciously stayed away from because they're margin dilutive or maybe not profitable? I'm just trying to get a sense of where EBITDA margins end up in the B2B space versus where they are today. And then finally, on the cost cutting, you've exceeded expectations this year. What specifically drove that? And how sustainable is that piece?
I'm trying to understand whether the €100,000,000 guidance for this year and next is conservative. So those are 3. Thanks very much.
Thank you. George? Maury, take the costs.
Maury, take the costs. So yes, we were CHF 20,000,000 better than expected this year. There, especially in the first half, we had some tailwind in the cost cutting in the area of call centers and field forces. So the impact of the all IP migration, the positive impact kicked in earlier. And of course, we took that benefit with us, and that was the main reason for the, let's say, for the beat of the SEK 100,000,000.
And I would say, no, 20 19 is not conservative. We stick to the SEK 100,000,000. But if things still a lot better, then of course, it's taken with us.
And then on the B2B, maybe you can give them some more flavor, Rose. But actually, we were a bit astonished about the development on the wireline side because of our all IP impact. That was the topic. So we had more cancellation because of the all IP migration, not only because of competition. And yes, if we are in a nonprofitable business, we our ambition is certainly to increase the profitability.
And in the businesses where we are in, we have margins. It's not the case that we are running a business without margins. But the IT solution business has a lower margin than the connectivity business. But if I look to cloud, if I look to security where we are growing, we have a nice EBITDA. If I look to data center, we have a nice EBITDA.
Urs? Sure. So I guess we have a very solid growth, as already mentioned, in security, in cloud and also in IoT, where we have some very solid double digit growth and also planning to do so in 2019 further on. There I'm pretty convinced that we will deliver that, at least on the expectation and in the plans. On the other side of your question, we are in consolidation of our portfolio.
So we have in 2018 at least 40 to 50 products, which were end of sales. So let's say, we have a clear focus to shrink down our larger portfolio towards a more focused and standardized approach, which is a mid- to long term activity until it's in operation. But this is one of the policies we are really working on very hard, yes.
Okay. Thank you. Luigi?
Yes. Good afternoon. Luigi Vinerva from HSBC. Three questions. The first on 5 gs.
So if we look at the CapEx profile in 2020 to 2022, assuming you get the spectrum, it's reasonable to assume an increase in CapEx? And maybe if you can help us understanding if there was a change in the electromagnetic emissions legislation and to what extent it can help you on the CapEx side? And then still on 5 gs, a point on revenue. From where you sit today, can you point us to an application or maybe better more that really require 5 gs and that can bring incremental revenue? Can you make some examples in practice?
Then moving on to the wholesale business, just following up from previous questions. You give us an idea of the extent of the wholesale revenue at risk if UPC Sunrise were to merge? And then finally, on Italy, we talked about the wholesale opportunity if Sky is to enter broadband. But what happens on the retail market because they are partners commercially with you and close to your market segment as well? Thanks.
Thank you.
I'll take the 5 gs question and Mario then you can take wholesale and Italy is clear. On 5 gs, so because we have already a very dense network, because we have already all the fiber station or all the base station connected with fiber, we don't see a huge, huge peak for 5 gs investments. And what is also the country effect is that 4 gs is going down. So yes, the CapEx are will go up for mobile networks. But on the other side, the fiber network rollout will go down.
And so overall, we feel ourselves comfortable that the CapEx envelope overall will not increase. And this the second part of the question was this radiation question. We have in Switzerland a very severe regulation on it, 10 times more severe than in the rest of Europe. I don't think that we will get a fast relief on it. Maybe on the measurement methods, we will get a relief, which will help us to have a faster development.
But the threshold which we have today, I think we will have to live with this in the next, I would say, 2 years. Then maybe we will be able to have some changes. And the result of it is that we have to find new sites. So that's a bit the topic. If you would get a relief, we could save some CapEx, that's right.
And the third part of the question is where a typical application where we can monetize 5 gs, I would say it's a campus solution in the industry. If you are doing networks for a fabric to have the whole connection on wireline. That's a business case, these edge networks, these campus networks where we can monetize 5 gs. And then the other topic is how skillful is our will be our industry in charging for speed. And I hope that the industry will be more intelligent than in the past, but hope is always the last thing you have.
So but in B2B, we will be able to monetize. I'm quite convinced.
Can I add a word on the consumer market? So the tariffs that we just launched last week, we are also calling them 5 gs ready, which explicitly or implicitly means we have not yet made a decision on the existing tariffs. But it might well be that we only enable this for the time being only this tariff for 5 gs. And as that is a bit more like towards the higher tier of tariffs, we also can anticipate that there will be a skew towards those higher tiers for those people that want to have 5 gs, yes? Now what do they want to have it for?
I mean, there's obviously an emotional and a rational aspect to it, yes? There's clearly an amount of people that always want to have the best and the greatest and the newest. And that is like 15% to 20% of the consumer population. And that will show. And then 5 gs over time will be the better network than 4 gs, just as it happened in the past with 4 gs and 3 gs.
If you look today at the 3 gs symbol, you can bet the quality of connection may be not as good as in 4 gs. And the same will happen in the transition of 4 gs and 5 gs also. It might take a couple of years, but still there's a value to that. If it's only busy on the capacity, that's fine and that will help. But then obviously, it is all high speed.
Yes, at 100 mega, you can download a video in 2 minutes or so. But there's people that are impatient for that and want to have that in seconds, and that is what 5 gs does. We delivered an option to the new tariff scheme that gives you a premium speed of, for now, 1 giga and that can go even further for an additional CHF10. We offered options for IoT, so multi device, which in a way is not technically basically bound on 5 gs. But from a proposition perspective, we bundled it all together, yes?
So I think there's clearly a value proposition. And that comes in like low latency, which in the consumer space translates for now into applications like gaming, which is very popular and will enable new scenarios and then new scenarios that come in with AR and IR and so on. So we are really confident that there can be a pull. But obviously, it depends also upon, as Urs said, are we able to sustainably, in a competitive context, monetize it? We do hope so, and we see very positive signs.
Okay.
And the wholesale question, so we do not disclose the revenues we have with Sunrise and the AXA Steel. And I think also Sunrise does not disclose the numbers. But to give you some help, but to make an estimate on a potential impact. So they might have 300 to 400 lines with us at Sunrise. And the prices of our wholesale portfolio, you find off on Page 86.
So you can do a rough calculation of a potential impact. But maybe one word, if such a transaction would happen, these revenues would not disappear overnight. So this migration, I think, that would take years. You have to replace modems, TV boxes and maybe the customer doesn't like to change all these things at home. So these revenue streams would be at risk only midterm.
Okay. And for what it concerns Sky, yes, Sky will enter the Italian market. Not clear exactly when. They said within 2019. I think that at the end of the day, yes, it would be an additional player, but at the end, it's not going to change the dynamics in the market.
Remember that in the last 5 to 5 years, the Italian market has been extremely aggressive on the wireline. And I think that prices today are already very, very competitive. So I believe that if Sky decide to enter in a new market, they want to do it also on a sustainable basis. So I think that really for us, we shouldn't be too much worried on the retail. Yes, there could be a marginal impact on retail even if I don't think, but there is much more an opportunity to provide them wholesale services.
And I think that the balance for us is positive.
Thank you. Next question perhaps we start with Simon.
Simon from Barclays. I just had a question on the new mobile tariffs that you launched last week. So the first question is just they're not really offering you're not pricing at a premium to competitors anymore. So I'm just wondering what's the rationale behind that change because it would appear to be more aggressive than it was before. And then secondly, maybe it's linked to that.
Have you offered the convergent discounts to now price the InOne mobile GO at quite a discount to competitors? Is that to maintain bundling momentum in mobile because you really want to try and protect that base from competitors? Or is that more of like, say, returning the favor to your competitors or being very aggressive in the enterprise market?
Thank you. Diet?
Okay. So if you look at the new tariff schemes and how it compares to the existing, and I think Ursa Mario said it before, there's, let's say, certain consumers that can kind of like trade down and others can trade up. Beitrack sits in the middle. So there's a notion of you pay a bit more, but you get much more value for it. By way of example, let's say, in 1 mobile as consumers, what happens is in only 10 o'clock 70 Swiss francs.
Now it would be 80 Swiss francs. So there's 10 Swiss francs which obviously not our first idea. We have a big one to 1 campaign ongoing where we could suggest to those customers to take not only like the base bundle, but also then added value bundles like the connect bundle and other international auctions and so on and so forth to maintain the revenue and spend level that they already have. And we are quite confident that, that case will come through. In a way, it is a bit of a proactive move, yes?
You can do some scenario planning around what otherwise would have happened with roaming and so on and so forth, yes, and puts the portfolio in a quite competitive and compelling space, yes? But that is, let's say, by intention. Okay. Thank
you. Next question, Nick from UBS.
Hi there. Nick Prezzone from UBS. First one is just a follow-up on George Surly question on the wholesale contribution from MVNO. I appreciate you aren't going to give a size of it. I wonder if you could just give an idea of phasing, if you're going to see the full impact in Q1 or if it's going to come in later in the year.
My second question was on CableX. I think at Q3, you highlighted the other generated about sort of €25,000,000 from a contract rate to Swiss Railways. I just wondered what the full year contribution of that was, whether that kind of revenue is going to recur in 2019 or if that's going to drop out? And then my final question is on cost cutting. I suppose we're now 2 years away from the end of the plan.
I just wonder if you could give us a view on where the cost base will be at the end of the plan, potentially opportunities for the cost cutting and if we might see a new target at some point. Thanks very
much. On CapEx, yes, you had the impact with Swiss Railways, construct the tunnel in Southern Switzerland. The full year impact on revenues was €50,000,000 €50,000,000 €50,000,000 with no EBITDA margin because it's a long term contract, it's in construction. So you rather, let's say, realize the margin at the end of the contract. We will have some revenue next year.
Cannot give you the exact number, but maybe CHF 20,000,000, CHF 30,000,000 also with no EBITDA margin impact. That's an old contract we concluded around 3, 4 years ago. On cost cutting, we have now this 3 years plan. And then as a management team, of course, we evaluate cost opportunities each and every year when we draw up our business plans. And what I know today, of course, we are looking for new opportunities to reduce costs.
But I've been now in this industry for 20 years. This has been always the case. It never ends. And I didn't get the question on wholesale.
On MVNO, the impact on MVNO.
Can you please use microphone?
On the fast plate?
No, no, no. On the UPC.
Okay. No, that one. No, that will gradually improve over the year. So I was confused because we discussed the Sunrise MNO before. Now that will improve or increase, I would say, gradually.
We had some let's say, bit more migrations in Q1, but that didn't that's not a huge impact on a Q on Q basis.
Okay. Thank you, Mario. Matt, please.
Yes. Hi, Matthijs Vallejo with Kepler Cheuvreux. First question is on Fastweb. If you look at the cash generation, it's still quite limited and it's due to the fact that CapEx II sales is still north of 30%. So I'm wondering when do you expect CapEx II sales to normalize and to what kind of level?
And in addition to that, obviously, Fabry carries some strategic value. What is your view in the long run on your Italian subsidiary? CapEx.
As I said, Fastweb has been successful in the last, let's say, 5 years, just to cut a long story short, because we were able to invest to position ourselves and to grow our margins. And this will happen also in the next year. So you will see margins continuously growing with the CapEx that will remain always in a region of around €600,000,000 And so the free cash flow generation will ramp up accordingly. The reason why we will need to invest also in the future is because, as I said, we will diminish the fiber investment, but we will need to ramp up the 5 gs network. So at least for the next 3 years, that is going to be the situation.
But that doesn't mean that the free cash flow will not grow because the margin will grow significantly as we said before.
Thank you. And on the second part of the question, we believe that we can develop the value of Fastweb. So we are not on the way to sell Fastweb. And we're going to develop Fastweb. We see a lot of opportunities.
Alberto mentioned them in the B2B market, in the wholesale market, but also with mobile. So that's domestic churn.
Would you consider teaming up with 1 of the mobile only players?
We don't we have our strategy on mobile to get for an intelligent rollout of 5 gs. That's why Alberto acquired Tiscali. And then the rest we maybe we don't comment on just on rumor topics.
Okay, fair enough.
Okay. Thank you. Next question, Andreas.
Andreas Mennloff, Zurcher Kantonalbank. Three questions. One is on the market liquidity in enterprise. You mentioned that the All IP migration is currently increasing the propensity of your clients to change their provider. How do you see that on the retail side?
Is that since that has basically completed, is that going to change down the road? And also, could you this 7% less revenues, how much was that in Q4 out of this kind of liquidity problem? 2nd question then on SALT and SALT Fiber and the traction, what do you see there? Where are these new clients at SALT coming from? And then the third question, in Italy also, the fixed wireless access, access, the white spots, I mean, what's the potential there in millions of clients, say, in the next 3 years or so?
Thank you. The last part is for you, Alberto. Yes.
I'm sorry.
Okay. You start?
As I said, on the fixed wireless in Italy, there is a huge opportunity because we have 6,000,000 households that will be reached with a technology that is going to be extremely performing. There is differently from Switzerland, in those areas, white areas, the average, let's say, performance stays below 10 meg, sometimes between 5 10. So having a fixed wireless technology, which will be boost by the 5 gs with through the 26 giga frequencies will be a huge change in customer experience. And therefore, those are the families or home that will have to wait forever without this opportunity. And so it's a material opportunity because €6,000,000 is a huge potential market.
Thank you. And then the market liquidity in the retail business, the best indicator is the churn rate. And in 2017, we had churn rates of over 10% in broadband in the residential market. And that came down by 2 percentage points, down to 8%. And I think that's a very low churn rate.
I would say this impact is more or less over. So we don't see increasing churn rates. So, Dirk, No.
I mean, I think the question was also related to all IP, whether it's a weak effect in residential and that's basically over, yes. As Will said, we are 99% through. I think there's like 10,000 lines or so left in consumer, which in the next couple of months we will deal with. There's every now and then some optimization with respect to the voice service still in consumer, but that has more to do with when customers reevaluate what type of service they have and what is still needed, then there is a bit of an effect of fixed mobile substitution. Also, that is also slowing down already.
Then to the question of SALT, what we see actually is after the entrance of SALT, much more promotion activities in the fiber to the home footprint. So that's the main impact. And as Mario mentioned, our churn figures are on a low level, but we see a lot of promotions. I think cable operators are suffering much, much more from these promotions than Swisscom. And we have net adds in the fiber footprint, which are quite well.
But we see more promotion activities. Actually, fiber to the home connections today are sold for a low bandwidth connection. That's a bit the situation we have. I think cable operators, they are suffering more from this than Swisscom.
Urs. Usman, perhaps.
Usman from Berenberg again. Thanks for the opportunity. I have Sid, 2 further questions. Firstly, could you indicate what is the overlap of your consumer mobile base with, say, UPC broadband just to assess the potential risk if this transaction was to go through of cross selling. The other question was just on enterprise.
I mean, in the past, we've seen over the top risk, whether it be SD WAN or voice over IP that have cannibalized revenues. I mean with 5 gs, there's some talk of over the top players being able to do network slicing, etcetera. I mean how do you manage that risk as we go into 5 gs? Thanks.
Thank you, Suraj.
On this question of overlapping of footprint of broadband and mobile customers from Swisscom, I'm not so concerned about this. You must have a good value proposition if we are pushing in one our in one offer. I think we are in a very solid situation to compete there. The main impact of a possible merge of UPC and Sunrise, in my view, is not wholesale. What is always asked is not such question as you ask.
It's the behavior of the management, how they behave on the pricing side. That's the main impact of such a merge. And if you look to such a company, I think the likelihood that such a management has to behave themselves rationally is quite big because they have a big installed base. UPC has a high price on Internet access and TV. I don't think that they are going for a price strong price competition.
So therefore, I think we can look quite relaxed to such a deal.
Okay. On your question concerning the beat the enterprise phase with SD WAN and other OTTRISK, on one side, we for sure have a well integrated portfolio on SDN proposition already in place on the lower end of the portfolio, which is already in operation since the year. We are coming to the market with the high end SD WAN solution within this year. I truly believe 5 gs is not the competition itself. It will be part of hybrid architectures in the future, given the fact that 5 gs has the ability to make sure that we are able to provide SLAs and mobile communication using slices.
And there, I see an upside potential, as already mentioned, in the B2B space, for example, in critical communication areas for real critical communication use cases, which are pretty a lot out there. So for me, it's much more synergy and the chance to drive complex network architectures into more customer specific scenarios than today.
Thank you, Urs. Is there any other question? Does not look like. So I think then we come to an end.
And I would like
to close down the conference. And at this point, also thank you and invite you to have some drinks and snacks with us outside. Most of the people are still around, so you can do some informal chatting.