Switzerland Telecom - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Key Highlights

• The Swiss telecommunications market is set to experience substantial expansion in the coming five years. Leading companies such as Swisscom, Sunrise, and Salt, which are all based in Switzerland, contribute to innovation by consistently investing in extensive research and development. This growth is further supported by increasing customer demand for fast connectivity and the increased investment in the deployment of 5G infrastructure.
• In Switzerland, a landscape of robust competition defines the telecommunications sector, with many providers vying for market share. As per the Federal Communications Commission (ComCom), Swisscom, by the close of 2023, boasted 6,202,000 mobile telephony customers, marking a modest 0.5% increase of 29,000 from the previous year. Notably, Swisscom secured 129,000 new contract customers, primarily through postpaid plans. The Swiss market currently hosts over 20 active operators, with Swisscom, Sunrise, and Salt emerging as the dominant trio. With these critical players intensifying their offerings, the market is poised for substantial growth shortly.
• According to ComCom, the contract segment has been the primary driver of market dynamics for the past decade. Prepaid users are steadily transitioning to contracts, with the share of contract customers climbing from 61% in 2013 to nearly 85% by 2023. This trend is consistent across all three major network operators: Sunrise leads with 87% contract customers, followed by Swisscom at 85.1% and Salt at 81.1%. Moreover, these companies are significantly enhancing their market share in the region, impacting the market's growth.
• The rise of new technologies spearheads a digital revolution, propelling a notable increase in internet users. This surge contributes to factors like the affordability of smartphones and the rollout of 5G-enabled devices, intensifying the appetite for mobile internet connections. Switzerland's telecom sector is strategically pivoting towards the expanding 5G landscape, foreseeing a surge in local service revenue. This optimism stems from the expectation that as users increasingly harness faster download speeds, they will consume content acceleratedly. Moreover, the broader availability of high-speed internet has catalyzed the emergence of novel applications and services, bolstering market expansion.
• Switzerland has achieved nearly complete mobile coverage thanks to cutting-edge 4G and 5G technologies. Swisscom and Salt phased out their 2G networks (GSM, GPRS, and Edge) between 2019 and 2021, with Sunrise following suit at the beginning of January 2023. According to ComCom, Swisscom reached 99% of the population with 5G and speeds of up to 1 Gbps by the end of 2023 and 81% with 5G+ speeds of up to 2 Gbps. Moreover, the increasing investments in boosting the adoption of 5G technology in the region are expected to drive the market's growth.
• The county's infrastructure relies heavily on outdated DSL networks, with DSL connections surpassing the OECD average by nearly threefold. Nevertheless, there has been a concerted effort by the Swiss government, regulatory bodies, and service providers to prioritize fiber-based services, offering speeds of at least 1Gb/s. Additionally, the rising number of mobile cellular connections is anticipated to boost the need for mobile networks and contribute to the expansion of the market.
• The COVID-19 pandemic has confined a significant segment of the Swiss population to their homes, leading to a surge in remote work and, subsequently, heightened broadband usage. This trend underscores the importance of providing high-speed broadband services, which, in turn, will bolster the telecom sector. Furthermore, the accelerated internet adoption and rising smartphone penetration, catalyzed by the COVID-19 pandemic, are poised to propel the market's expansion further.

Switzerland Telecom Market Trends

Rising Demand for 5G is Expected to Drive the Market

• Switzerland is witnessing a surge in 5G initiatives, ranging from spectrum auctions to business trials, all to nurture 5G applications tailored to local needs. These initiatives are integral to a larger strategy to cultivate a dynamic 5G ecosystem that fuels innovation and economic expansion. Collaboratively, the government and private enterprises are striving to maintain Switzerland's position as a leading adopter of 5G technology and its diverse applications within the EU. With numerous firms making consistent investments in 5G, the technology is poised to play a pivotal role in propelling the Swiss economy forward.
• The Federal Office for the Environment reports that mobile network data transmission has doubled annually. The introduction of 5G in 2019 aimed to enhance data transmission capacity with ongoing network construction in Switzerland. Asut, the Swiss Telecommunications Association, states that Switzerland is at the forefront of global 5G deployment. Various initiatives and investments are being made in the local 5G sector to promote its uptake.
• The Federal Office of Communications in Switzerland has reported that there are 6,000 operational 5G antennas in the country. During the initial stages of the 5G network deployment, these antennas were swiftly established by converting existing ones through a simple software update. At present, 5G services are exclusively provided by the three major providers in Switzerland, namely Swisscom, Sunrise, and Salt. Additionally, Yallo offers 5G as an optional feature for its subscriptions. The ongoing advancements made by these companies are anticipated to drive the widespread adoption of 5G technology in the region.
• Moreover, by the end of 2023, Swisscom, as reported by ComCom, achieved 99% 5G coverage, delivering speeds of up to 1 Gbps. Notably, 81% of the population already had access to 5G+ speeds, reaching up to 2 Gbps. Looking ahead, Swisscom is targeting a 90% coverage for 5G+ by 2025. In contrast, in early 2023, Salt unveiled its capability to reach 99.9% of the population, offering internet speeds of up to 750 Mbps by harnessing a blend of 3G, 4G, and 5G signals. These strategic moves by local players are poised to significantly propel 5G adoption rates across Switzerland.
• Swisscom initiated its 5G network rollout back in 2018, achieving an impressive 96% coverage of the Swiss populace. Notably, Swisscom has introduced a variant called "5G+," harnessing adaptive antennas tailored for this technology. In January 2024, the Swiss telecoms regulator, the Federal Office of Communications (Ofcom), unveiled plans to open up the 3,400 MHz to 3,500 MHz spectrum for private 5G mobile networks. These proactive steps by Swisscom and regulatory bodies are poised to catalyze the market's growth trajectory.

Data and Messaging Services to Hold a Significant Market Share

• In Switzerland, the data and messaging services sector, facilitated by fixed and mobile networks, leverages channels like the internet and text messages. This sector is on an upward trajectory, propelled by the rollout of 5G services and the widespread availability of fiber-based fixed internet connections. To keep pace with the surging demand, telecom providers are forging partnerships, enhancing their network infrastructure, and rolling out 5G services nationwide.
• The Statistical Observatory of OFCOM provides data on mobile telephony prices in Switzerland, focusing on the lowest rates providers offer. These statistics highlight significant variations in prices across different service packages. Irrespective of the specific service bundle, the least expensive option can be more than two to three times cheaper than the most costly one. In 2023, M-Budget offered the most affordable plan for light phone users (including 30 telephone calls and 500 MB) at CHF 12 per month (USD 13.29). This price was approximately half of the highest-priced monthly offer, which Swisscom provided at CHF 23 (USD 25.46).
• Mobile phone plans in Switzerland vary significantly in price depending on the usage requirements of the consumer. For those who fall into the medium-usage category, M-Budget's offer at CHF 14 (USD 15.50) is a much more affordable option compared to Swisscom's offer at CHF 39.90 (USD 44.18) . On the other hand, customers with high usage needs will find Yallo's offer of CHF 19.50 (USD 21.59) a better deal than Swisscom's offer of CHF 50.60 (USD 56.02). Despite these differences, it is essential to note that mobile telephony prices in Switzerland remain some of the highest globally for those in the medium-usage category.
• Numerous enterprises are making substantial investments in diverse technologies, including 5G. As the utilization of 5G services continues to grow, it is anticipated that there will be notable advancements in data services. According to their statement, Swisscom is actively expanding its 5G network to guarantee superior network quality and consistently provide customers with an exceptional mobile network. By the conclusion of March 2024, Swisscom had already extended 5G+ coverage to over 82% of the Swiss population. Additionally, the company has managed to refrain from passing on additional expenses, such as the VAT increase, to their valued customers.
• The increasing utilization of internet-based services across different industries, such as BFSIs, governments, retail, manufacturing, healthcare, and more, is fueling the requirement for data services from telecom service providers in the country. This encompasses internet data packages for prepaid and postpaid data services, as a larger number of individuals are adopting digital services. Additionally, market vendors in the area are broadening their range of data services to meet the escalating market demand.

Switzerland Telecom Industry Overview

• April 2024: Ericsson and Swisscom bolstered their enduring collaboration with a fresh multi-year agreement. This pact aims to invigorate the innovation ecosystem, propelling the service provider's 5G network in Switzerland toward heightened growth and enhanced energy efficiency. Central to this agreement is the deployment of Ericsson's Intelligent Automation Platform (EIAP), designed to deliver advanced network management and automation across Swisscom's diverse technology landscape. Notably, Ericsson has been a stalwart provider of its Network Functions Virtualization Infrastructure (NFVI) solution, underpinning Swisscom's telecom applications.

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