Bart Morselt – IR Urs Schaeppi – CEO Mario Rossi – CFO

Michael Bishop – Barclays Alex Grant – Macquarie Georgios Ierodiaconou – Citi Luis Prota – Morgan Stanley Usman Ghazi – Berenberg Sasu-Petri Ristimäki – Bank of America Merrill Lynch

Good afternoon from our side. Apologies for the extraordinary time, 2 o’clock in the afternoon. Normally we do the call at 9 o’ clock in the morning. You may have seen that we do also did a press conference this morning, basically not just the third quarter results but also the announcement of our new CEO. Urs Schaeppi is the new CEO he is sitting here next to me and will present the part of the presentation. And then after Mario Rossi, our CFO will present the financial results. Perhaps let’s have a quick look on the agenda before I hand over to Urs. The title of today’s presentation Turning Points aims to show a number of important trend changes in our business and company. Urs will kick off with the first turning point which shows how during the third quarter we have managed to change revenue and EBITDA trends. Whereas previously the trends in our core business were going south we’ve now started recovering. Also operationally, shown in chapter two, the trends are favorable, both in terms of market share as well as how the Infinity mobile tariff plans start making a positive difference in our ARPU development. As I said Mario Rossi will present the Group and segmental results while he will conclude by discussing the unchanged guidance in the final chapter. With that I would like to hand over the Urs to start his part of the presentation. Urs.

Good afternoon, ladies and gentlemen. I am happy to present to you the quarter three results. And as you can see on page three, we really managed to grow in Q3 if you compare it on a year-to-year base. Our revenue increased by CHF 61 million and CHF 51 million of the CHF 61 million are driven by acquisition, mainly by Cinetrade, that’s our content company and investment in IT area, business IT area. So CHF 51 million driven by acquisition and CHF 10 million on a like-for-like base is growth. So it’s really a good result, which we have and if you look deeper to this growth then you see that demand driver behind the growth are bundles and the red line shows it and you see that CHF 91 million is a bundled growth albeit approximately stable, overall stable. But really the big change is in the single play area. You see it on the blue line. And we managed it to decrease the decline to CHF 85 million and that sum, if you take the sum of this two line, red and blue, the green line, then you see that we were able in the Q3 to increase our revenue by CHF 6 million in the core business and that’s really the turning point which is a good result. Let’s look deeper to this one play topic, on slide four you can see a bit deeper, the one play game. We have to distinguish between the fixed line, the wired line product and the mobile product. Let’s start with the wire line product. The line, the violet line, this business is approximately stable. We have a decline of CHF 62 million on a year-on-year base mainly driven through substitution in the mobile through the mobile and the voice business. Changes we see in the mobile business, in the wireless, the red line. And if we split this business in the access business, that’s the blue line, you see that we are able to constantly grow and we have a growth in the Q3 of CHF 94 million. This is a better than the previous quarter and this is also driven by Infinity or mainly driven by Infinity. Interesting is to have a look to the red line, there you see a turning point, and that’s the real improvement. In the Q2 of this year we had a decline of CHF 146 million and on Q3 only CHF 117 million. So a real improvement in the decline of the 1P traffic mobile of CHF 29 million, important change in the trend. If you take all of this, the sum of it, as you can see in the bars in the graph, you see that the sum of this revenues are also declining and in quarter three it was CHF 85 million compared to previous quarter preceding quarters, where it was CHF 120 million decline. Interesting is now to see if this has a change in profitability and this we show on slide five. On slide five you see blue line that we were able to increase the Group EBITDA by CHF 24 million. If you take only the EBITDA of the Swisscom Group without fast track and the acquisition, that the dotted green line you see that we have a sharp improvement in Q3. Turn positive, that means we turn positive our EBITDA in the core business. EBITDA you see also in the chart of Swisscom without Fastweb it’s plus CHF 17 million and Fastweb plus CHF 7 million. That means both Swisscom and Fastweb has an increased EBITDA in Q3. On the next slide, slide – our next chapter I would like to have a deep look to the market share development and our ARPU increase. Let’s start with the market share on page seven. There you see that we were able to increase our market share on net adds on the upper chart, top chart and also the market share on total subscriber. So we have a strong performance in our market and after Q2 of last year we were able to increase our market share up to 62.4%, strong performance mainly driven through NATEL Infinity. On the chart below you see that we have also strong growth on net add, on the net add. We don’t have today the figures of our competitors, they are not disclosed today. But if we look only after net adds we can estimate that will also have a good market share performance in Q3. Wireless, in wireless we have an increase of 159,000 subscriber, in the wireline business we have an increase of – 195,000 in the wireless and 159,000 in wireline. So a total increase in the Q3 of 352,000 subscriber; strong performance if you compare it also with the preceding quarters and it will be interesting to see the figures of our competitors of Q3. If you go to the next slide, that’s certainly an interesting slide. We discussed this already the last time, that’s the development of NATEL Infinity ARPU. The ARPU increased in Q3, certainly one of the key driver of our performance. We have today actually 1.5 million customers, NATEL Infinity customers and what is also positive on the ARPU level is that if a customer change from a non-Infinity to Infinity we could turn positive to EBITDA the ARPU increase by CHF 6. And if we take an analysis on customer which change from Infinity to Infinity we see today that we have upgrade change of 60%. So that means that we are able to increase our ARPU in our customer base through Infinity. Slide nine shows that we have a strong penetration increase with NATEL Infinity. The blue line shows that we have 49% of our customers are now on Infinity, but interesting is the green line. The green line shows that this 49% of customers are making 63% of our turnovers. So that means we get high ARPU customers, high value customers on Infinity. Now I would like to come to some organizational changes. The first one is very short introduction of myself, a bit strange, and the second one then, some words about our organizational changes. Today the Board of Directors elected me as new CEO. And I will follow Carsten Schloter, who made an excellent job for Swisscom. I have great respect for what he has done from Swisscom. From my side I am working now for 15 years with Swisscom in different executive roles. I was in more technical jobs but also in marketing and sales jobs. And in this year I was responsible for the role of CEO of Swisscom Switzerland. I would like to point out three things which are important for me. We don’t make changes in our strategy, because I was part of this strategy team, to build it and our strategy is the right one. So I don’t see the necessity to change something in our strategy. It’s also important that the strategy is fully supported by the Executive Board and we will execute it as we have done it in the past. The second thing is the change which we made or which we announced today on the corporate business. We will merge the department today, we have two departments, an IT department and connectivity or telecom department, which are serving our customer in large account segment. We will merge these two departments to one unit because we are convinced that we will be able to increase our performance in this segment. The market is converging day-by-day. We get a lot of new opportunities to increase our market share with this organizational change. We will create an ICT powerhouse with one face to the customer which can deliver end-to-end solution, which is really a unique proposition in the Swiss market. The third thing which I wanted to point out that the Executive Board or the new structure of Swisscom will make the management structure of Swisscom simpler and faster because we are actually de-layering our organization and that means in the Executive Board of Swisscom we will have the big operational unit and we will be able to decide fast and quick on business decisions. I am convinced about this move in organizational change that we will be fast and more efficient in the future. Now I would like to spend some words on our enterprise customer unit, the new merged unit in the corporate area. If you got slide 13 then you see the background of this actually transformation. I already mentioned it’s driven by the ICT converting topic and it’s driven by the belief that we will have a strong USP because we are bundling connectivity with IT services, which is really a unique proposition in the market. And I am convinced that we can increase our market performance in this large enterprise unit. What are the goals of this organizational alignment? The first one is one face to the customer. Today we have several departments which are visiting our customers. We will have one face to the customers. This unit will start his work today to don’t lose track in market, we – that was the first step, really to make the change quick and to be efficient in this marketing and sales department. The second goal of this reorganization is really on the product side, because we will have a total other dynamic in the future, if you have the telecom people and the IT people in one unit they will be able to create more value proposition for our customer, which differentiate us from our competitors. It will also increase the stickiness of our customers and therefore improve our performance in the corporate market. The third goal of this re-organization that we want to have more focus on an innovative topic that’s the cloud topic. The cloud is still a small business, but I am convinced that this will be the delivery, the delivery model of the future and we will start with proposition in the corporate market but we will also go much broader with this product in the private market and the consumer market but it is also a possibility to export cloud products or to follow our customer with cloud product around the world. The cloud is an important goal of this new business unit. And the fourth goal of this reorganization is certainly to have, or to exploit synergies in the commercial and the technical department. In the technical department we will have one big technical department in Swisscom. It’s a merge of the IT, technical or operational unit with the network and IT department from Swisscom Switzerland and the goal of this new department is, which has about 4,000 employees, is to really industrialize the IT production and telecommunication production. Cloudification, you could call it. That’s certainly one of the, also the big goal. What will the impact, the concrete impact on the financials we will elaborate this in the beginning of the next year. We have rough ideas today but we have to deepen it and when we know the detailed organization we can give more details about the financial impact on FTEs but also cost. 2014 will be a transformation period for this unit. We will report in the current reporting structure and in 2015 we will report in the new reporting structure. On slide 14 you see the new structure of Swisscom. It’s an organization which is simple, de-layered where we have in blue, the big, the members of the Executive Board. You see this is a customer oriented, customer facing unit oriented organization, with residential SME, enterprise customers and then the network and IT department and then support functions like CFO and human resources; simple more agile organization. Now I would like to hand over to Mario Rossi which will explain us the Q3 figures.

Thank you Urs. Also welcome and good afternoon from my side. I will run you quickly through the numbers. I think we present a robust Q3 without no surprises. Group revenues for the first nine months increased by CHF 36 million or 0.4%. Revenue is influenced by three exceptionals, is the policy of impact of CHF 83 million, you see them on the right hand side of the slide. The underlying revenue came down by CHF 47 million compared to last year with Q3 being the quarter with the strongest contribution in this year. Fastweb’s underlying revenues decreased year-over-year by CHF 40 million. This slightly lower contribution comes from other wholesale business. For Swisscom Switzerland revenues came down by CHF 42 million , lower revenue in SME and corporate due to competing price erosion mainly in mobile which cannot be fully compensated by the excess growth. On EBITDA on the next page, page 17, the underlying EBITDA declined by CHF 98 million. Some of the lower restructuring costs, strengthening of the euro against the Swiss franc, higher pension costs and acquisitions had an impact on the EBITDA of net CHF 10 million. The operating results without these mentioned exceptionals decreased by CHF 108 million compared to the last year. Fastweb’s EBITDA contribution, without exceptionals is almost flat year-over-year. I will come later to Fastweb. The margin of Swisscom Switzerland without exceptionals came down by CHF 104 million mainly as a result of the previously discussed lower top-line contribution and slightly higher cost base for cost of goods purchased, repair and maintenance and IT expenses. In this context I would like to highlight two point in particular. On the one hand side we see a negative margin trend in our corporate business, mainly as a result on the ongoing competitive market situation. This also explains partly the motto of Swisscom IT services is to corporate business which was explained by our new CEO. On the other hand, [positive] trend of Swisscom Switzerland hence the Group is positive. We are able to term the trend of negative EBITDA development. Quick on the net results, EBITDA amount to CHF 3.248 billion, depreciation and amortization increased by CHF 47 million to CHF 1.5 billion mainly due to the higher, attributable to the ongoing fiber rollout in Switzerland and Italy. In addition the Entris acquisition of the mobile essence license in the previous year led to higher amortization in Switzerland. Net interest is CHF 160 million is CHF 29 million better than in the previous year. This is the result of a fair value adjustment of interest rate hedges. Net income after income taxes of the Group went down by CHF 83 million to CHF 1.27 billion. The decrease is driven by lower EBITDA and higher depreciation and amortization. Some highlights on the segment, on the different segments. Let me start with residential on page 19. The net revenue of the segment went up by 1.2% as per end of September. Adjusted for the acquisition for Cinetrade which contributes around CHF 40 million as per end of September net revenues developed stable. Price erosion could be compensated by the volume growth and higher hardware revenues. The contribution margin too decreased to CHF 2.2 billion. The 1.2% decline is mainly driven by higher direct costs, out payment around CHF 10 million and higher SAC and SRC of CHF 5 million. But let me point out Q3 contribution margin too increased by 3.3% year-over-year. On the operational performance we see a further good momentum on the wireless and the TV markets. The Infinity price plans let to a higher number of mobile postpaid subs plus 4.9% and an improving ARPU trend. Q3 versus nine months 2013 cumulative we have a blended ARPU of CHF 34; Q3, standalone of CHF 36. The number of TV subs increased by nearly 30% and surpassed a threshold of 900,000 in the residential segment and we are quite confident that we will see a one million customer base by the end of this year. On SME, next page, net revenue of the segments decreased by 1.4% to CHF 860 million. The decline is due to price erosion effect and decreasing wireline telephony revenues. Lower net revenue of total CHF 12 million and higher direct cost of CHF 6 million explain the lower contribution margin, which decreased by 3% for the first nine months 2013. Two items on the operational performance. We see an ongoing broadband growth now with 210,000 lines as per end of the third quarter. Wireless ARPU as per end of September decreased by around time 10% primarily due to the right grading effects of Infinity customers. Those right grading effects were slowing down in the third quarter. So ARPU of Q3 stands at CHF 74 million which is slightly above the nine months ARPU. On corporate, page 21, net revenue of the segment decreased by CHF 36 million, price erosion, which we discussed already was partly compensated by the increase in the number of subscribers. Contribution margin too came down by CHF 30 million and some words on the operational results, the number of wireless subscribers went up by 7.7%. Around one-third of this growth is machine-to-machine driven. The price pressure in the wireless business, also on roaming led to an ARPU erosion of 15%. On wholesale and network there are no exceptional to discuss and let me therefore jump to page 24, Fastweb. Excluding the managed reduction of low margin hubbing revenues, net revenue is EUR 12 million lower than previous year. This declined related to the first drop – is related to the first [drop] is mainly due to one-off revenues which we saw in Q1, 2012 in wholesale. Reported EBITDA reached EUR 336 million as per end of Q3 which is equal to a margin of close to 28%. It’s worth highlighting again that we see a positive EBITDA trend, with the Q3 contribution of EUR 126 million, which is 38% of the nine months EBITDA and a 3% increase compared to Q3 of last year. CapEx increased by EUR 67 million, to close to EUR 400 million. The increase is due to that fiber of the street rollout which is going on as planned. In terms of customer development Fastweb again managed to grow its customer base, considering that most of the other telcos in Italy appear to losing customers this implies that we are further increasing our market share. It’s a proof of our strategy in Italy to also deliver service quality to our customers is correct and it makes us a happy owner of our asset in Italy. Let me point that we did not book the reduction of the ULL and bit stream adjustments of the fees. We will do so when the regulatory body’s decisions will become legally binding. We expect this at the beginning of December of this year. On the segment ARPU top line with external customers increased by around 10% to EUR 1.3 billion. Swisscom IT services revenue increased mainly as a result of acquisition of interest from CHF 66 million and Swisscom participation revenue went up by around CHF 19 million mainly due to higher revenues for construction services. The EBITDA of the segment ARPU of EUR 237 million increased by EUR 22 million or 10% mainly due to better profitability also in Swisscom IT services. Let me conclude our presentation with the guidance for 2013. We’ve not changed the guidance compared to when we presented our half year results. Revenues are expected to top CHF 11.4 billion as EBITDA should come in north of CHF 4.25 billion, with the trends in Q2, Q3 and Q4 to produce manageable revenues needed to achieve guidance would have to come in at the similar level as Q4 of last year. The same applies for EBITDA that the CHF 1 billion required in Q4 of this year compared to an actual of just over CHF 1 billion of last year in Q4 result exceptionally. CapEx is still expected to land at around CHF 2.4 billion for the Group implying that the free cash flow proxies should end up by around CHF 1.85 billion. So net we will propose again the division payments for this year of CHF 22 per share payable in April. Today we have no reason to think that this would not be possible. With said I conclude the presentation and hand over to the operator to start the Q&A.

(Operator Instructions). The first question is coming from Michael Bishop from Barclays. Michael Bishop – Barclays: Yes, good afternoon. Couple of questions please. The first question is looking at the level of subsidies in the fourth quarter last year, where the number of handsets was quite elevated. Do you expect that to be similar in the fourth quarter this year or is there any reason why we should be thinking about a different levels of subsidies? And then the second question was on the broadband markets. Again your sales in Sunrise seem to both do fairly well and could you just talk a little bit about the dynamics that you are seeing from Cable – sorry Cablecom in the market given they have double speeds and then talking yesterday around launchings of 500 megabit products? Thanks.

I can answer the question related to the subsidies. We expect a similar level of subsidies in Q4, 2013 compared to 2012. And we always have a high amount of subsidies because of the Christmas business and this year especially also is the expected launch of the iPhone, which the launch started at the end of October in Switzerland.

The second question with the competitive dynamics in the cable area. Cablecom just disclosed their Q3 figures yesterday and what we can see is that they had a quite moderate acquisition on TV side. We had a much stronger acquisition share on TV. So the performance in TV is not so good. On the broadband side they have, let’s say also a moderate acquisition, better than TV. Some of this growth is coming out of acquisition of small cable operators. But the competition is certainly on broadband this year, so speed is becoming more important in Switzerland. That’s why we are rolling out fast fiber-to-the-street and we will have a footprint of fiber-to-the street at the end of or in 2016 of about 60% in Switzerland. So we will be certainly competitive on speed and we don’t see actually today increased churn rates on broadband, wireline broadband. Michael Bishop – Barclays: And just a follow up quickly on the TV mix and it seems like the Swisscom TV light net adds have been relatively modest compared to the paying TV net add. So would you see any reason whether mix would change going forward?

Yeah, we have in the beginning where we launched the lower end TV products we have quite good figures but they are declining and the good thing is that we are selling more value TV products then in the beginning of the launch.

And increasingly in a bundle not just as a single product. Michael Bishop – Barclays: Great, thanks so much.

The next question is coming from Alex Grant from Macquarie. Alex Grant – Macquarie: Hi, thanks for the questions. Mainly on Italy, if I may. And firstly you risk-rated your commitment as of happier in Fastweb. Can you give us a bit most of color on that and how you are investing in Italy particularly given your previous comments by Carsten and on the need for convergence and what Vodafone were expected to do initially moving towards that? And actually second perhaps can you give us some sort of comments on how you view the revenue and EBITDA growth profile going forward. Clearly it’s pleasing to see you’ve gone to growth and but should we now see you as a great business or are there any sort of other headwinds? And thirdly there can you just give us more detail on the Bitstream you are expecting in December in Italy? Thanks.

Go to the first question and our strategy with Fastweb. We believe in Fastweb and we are confident we can develop and create value with Fastweb. If you look to the figures, to the acquisition figures markets, shares increase of Fastweb in this year we are quite confident that we are on the good way. The second thing is where we are also optimistic is that investment in our broadband, ultra broadband networks, fiber-to-the-street we see with fiber to the street in Italy that you kind of really increase your gross adds and the Italian market is keen for this broader bandwidth. So our strategy in Italy is to go ahead with the strategy we have, to have an excellent network and good customer support. But mainly on the second question was on EBITDA, do you take it Mario.

I think he was pointing to what’s the turning point, revenue and EBITDA growth in Q3, will this continue into Q4? I think the short answer actually to that is that if it were one of turning point we wouldn’t have called the presentation turning point. So of course we think that there is a trend here, rather than a one-off.

And I think is a trend on Infinity clearly and in residential market that we mentioned we see some price pressure on the SME and corporate. And then in Italy we see an ongoing growth, mainly especially also in the FTTS area where we see quite a successful pick up rate then we arrived with FTTS the pick-up rate is quite good and that gives us a good trading for 2013 also for Fastweb. Then on the operation on the ULL and Bitstream prior adjustments we will book in December when the prices will become effective low digit number as a positive effect, low double digit sorry. Alex Grant – Macquarie: Perfect so if I can just get back on the first question, Urs answered fairly well. I was just keen to understand that do you think you need mobile in Italy?

We think Italy is quite different to Switzerland. In Switzerland mobile is really important to get the sticky customers. And if you look to Switzerland you will see that we have quadruple play bundles, about 40% in the bundle area. But in Italy with the whole dynamic, with the high share of prepaid, it’s quite different and today I don’t really see the big value add of mobile for doing good business in the wireline area. Alex Grant – Macquarie: Okay, thanks that’s clear.

The next question is coming from Georgios Ierodiaconou from Citi. Georgios Ierodiaconou – Citi: Hello a couple of question on my side. Firstly in Italy there is an expectation that Teleco Italia could accelerate broadband high speed broadband rollout and I understand you how an investment agreement with them. Would you be especially given the uptick you’ve seen so far, would you’ll be willing to consider perhaps increasing your CapEx in Italy and also to participate in that and any comments around your thoughts on investment in the Italian market would be interesting? And secondly perhaps around cloud in Switzerland, should we expect the investments in cloud to be additional CapEx that you are planning for next year? And if you could comment on your plans in the residential segment, whether it’s one or three year period before we see the launch of Cloud TV on the residential segment? Thank you.

May be start from the FTTS rollout. We have our plan until 2015 to cover the most attractive cities and we are well on track and right now we don’t see a reason to change our rollout plan. We see that Telecom Italia is currently rolling out also according to their plans and I think currently is no need to change the rollout plans.

Not in historical [inaudible] but we cooperate in laying cable so we can continue here.

Yeah we can continue here yes. Then on investing in Italy that always a clash, will the network separation take happen, will the network separation happen and if this would happen we would certainly not contribute our valuable networks into this new company and we would certainly not invest in this network. Georgios Ierodiaconou – Citi: Perhaps just follow up on FTTC do you have any savings by pushing fiber into your cabinet, you pay less then when you are bundled at exchange?

Hey let’s – on the ULL fees . Georgios Ierodiaconou – Citi: Yes so when you do fiber to the cabinet is what you pay to Telecom Italia for...?

Then that CapEx is part of our business case, then you have lower payments towards Telecom Italia you don’t pay the ULL fees you pay sublink fees. Georgios Ierodiaconou – Citi: And what’s the saving?

Our IR department will come back to you with the saving with that number. Georgios Ierodiaconou – Citi: Okay. Thank you.

The second question on cloud in Switzerland if there would additional CapEx how it will be in the area in the overall area we will make some smaller reallocation but we will not increase our CapEx effort. And the third question was on the residential side Pay TV when it will be launched in Switzerland, it will be not the next year. Georgios Ierodiaconou – Citi: Okay thanks.

The next question is coming from Luis Prota from Morgan Stanley. Luis Prota – Morgan Stanley: Yes, hello two questions please. First is when do you think that the migration to Infinity will complete. So most all or our most of the customers migrating to Infinity and when the positive impact that we see on ARPU for standalone quarters will apply for the full year, is that going to be 2014 or may be 2015? And secondly with your 4G penetration reaching now around 70%, I wonder you have noticed any higher pickup of higher take up of higher speed Infinity bundles in parallel to the network deployment or whether when you have 4G coverage of 100% you are planning to launch higher speed packages at higher prices that could drive further ARPU accretion may be? Thank you.

Go to the first question migration to Infinity, we believe long term that the market is able to go up to 70%-80% Infinity in our postdate customer base. That means we will certainly have an increase of our Infinity penetration in the next two years and actually we have about today about 40,000 net backs per months so in next two years you will have an increase of our Infinity customer base. The second question 4G coverage, it’s certainly, if you get really the experience of 4G you see the value or this will increase the value of our high tariff plans Infinity. And then but we will not launch additional speed packages because already to date the XL the highest tariff plan in Infinity has the maximum speed and the connective could be that to implement additional tariff plan but then we will confuse our customer to stay with the portfolio as it is. Luis Prota – Morgan Stanley: Okay, thank you.

The next question is coming from Usman Ghazi from Berenberg Bank. Usman Ghazi – Berenberg: Hello, gentlemen. Thank you for taking the question. I have two please. Firstly on the Infinity subscribers of 1.5 million would you mind splitting that between residential and SME just for us to see what the penetration rates are in those two subs? And then my second question also on Infinity was if I and you’ve given the percentage of revenues coming from Infinity and non-Infinity subs within the overall revenue base. If I back out Infinity comes out at an ARPU of around slightly more than CHF 80 and it started off much higher but it seems to have stabilized at around CHF 80 level. I mean do you see new customers taking price points at higher than CHF 80 ARPUs or is that should we think about that ARPU level as stable now?

Okay for the first question on this 1.5 million Infinity customer 70% is consumer residential and about 30% SME. On the new customers to which tariff plans they go we see also today that we have customers which are really going to the high end tariff plans. It’s not like this that we have only low end subscription Infinity acquisition to date. And we see a quite normal mix. Usman Ghazi – Berenberg: Okay like do you I mean does the ARPU for the new net adds vary a lot from the ARPU of the Infinity in total at the moment?

Sorry a huge part of the gross additions comes in the S and M subscription, and tells to give you an idea the M stands at the CHF 99 and the S at CHF 75. Usman Ghazi – Berenberg: Okay and so you are saying that the majority of your gross adds are coming on those two tariffs.

The majority of our gross adds. Usman Ghazi – Berenberg: Okay, thank you very much.

You are welcome.

We have one more question. It’s coming from Sasu Ristimäki from Merrill Lynch. Sasu-Petri Ristimäki – Bank of America Merrill Lynch: Yeah thanks hi. I really wanted a follow up on the Swiss [inaudible] issue, if I look at the ARPU development and residential clearly has stabilized or has in fact a remarkable sequential increase as well. Now you are certainly not reporting a similar development in either the corporate segments or even the SME segments. So can you talk a little bit about firstly how did the competitive dynamics appear that the moment and in the more enterprise segments? And secondly how sustainable do you think is the ARPU stabilization in residential?

To the dynamic in the corporate markets, what we face today is that our customer – our competitors they have much higher focus on the corporate market, because they have quite, let’s say moderate net backs in the mass market. So they are going for the corporate markets and really going with quite steep prices in our customer base that’s why we have quite strong competition price competition in the corporate market. But if you look to the dynamics this happened already several times in Switzerland. There will be high price competition then they see that we’ll not get so much customers and then they refocus them on the mass market, that’s the normal dynamic. On the sustainability of the ARPU in the residential market if I look to the development of the different customer clusters which migrated to Infinity we see a stable ARPU. If the customer of long term Infinity we don’t see actually moving in the ARPU. So stable, it will be quite stable in actual market conditions. Sasu-Petri Ristimäki – Bank of America Merrill Lynch: Okay. If I can ask a quick follow on. Have you seen any kind of significant response from your competitors in relation to the Infinity pricing and they seems to be suffering a fair amount at your hand in the mass market segments. So have they come up with anything that could be challenging your position there?

Our competitors reacted already last year and Sunrise made similar tariff models [Atrias] and Orange has a different model, more customized model. But I don’t really see today a fundamental change in the gross add dynamic. So have a stable conditions. Interesting will be the market entry of Cablecom with their mobile offering. This should be in December 2000 – this year. That will be interesting how they will launch , but we have to look for it.

Before we move on to the next question is one question I would like to come back to the previous question by the previous asker on the Infinity distribution between residential and SME customers and I gave a number of 70-30. But frankly it could be, I don’t know the answer for sure. It was a wrong number based on sim cards instead of based on the Infinity program. So I am withdrawing the answer, sorry for that.

If anybody is interested they can come back to us later on we’ll try to find it out. Next question please.

The next question is from Usman Ghazi from Berenberg Bank. Usman Ghazi – Berenberg: Hi guys sorry, I was going to come back to you on the 30-70 split because it didn’t – when I did the math, it didn’t make that much sense. So that question has been answered. Just while I am on the line I just want to ask about subsidies, handset subsidies in Q3. I think Michael already asked the question but I wanted to find out why did subsidies go down in absolute terms in Q3, were you just saving fire power for the fourth quarter or something, or do you see a structural tendency in the market to reduce subsidies?

You know we don’t see a trend that the subsidies are going down on a unit base. It is more volume driven profit. And in Q3 lots of customer waited for the new iPhone. So that overall market for handsets is a bit weaker.

Also look at retention cost there not the acquisition, but low retention cost especially. Usman Ghazi – Berenberg: Okay, thank you very much.

That was the last question.

All right well in that case I would to thank everybody for the interest. If there is any follow up questioning then feel free to contact us. And otherwise we look forward to speaking to you very soon again. Thanks for your interest and have a nice afternoon.