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

Frederic Boulan – BofA Merrill Lynch Nicolas Cote-Colisson – HSBC Vikram Karnany – UBS Nicolas Cote-Colisson – HSBC Georgios Ierodiaconou – Citi Michael Bishop – RBC Usman Ghazi – Berenberg Jakob Bluestone – Credit Suisse Mark Murphy Jacques de Greling – Natixis Securities

This conversation will be recorded. Good morning ladies and gentlemen. And welcome to the Swisscom's third quarter results 2014, presented by Urs Schaeppi, Mario Rossi and Bart Morselt to whom I hand over first. Bart, floor is yours.

Yes, good morning. Welcome from our side, and thank you for dialing into this call. We've got two main parts on the presentation today, if you look on page 2 to the agenda. First part will be addressed by our CEO, Urs Schaeppi and the second one, the CFO, Mario Rossi. Urs will start with discussing the third quarter dynamics by taking you through, what I call, the Q Three a logical tree that provides insights into where results may differ from your expectation. And Mario will then take over to discuss the nine month results and the outlook before we move into the Q&A which will be handled by the operator. With that simple introduction, I would directly like to hand Urs to start his part of the presentation. Urs?

Yes, good morning ladies and gentlemen. As Bart mentioned on slide 3 you see the tree, let's say the financial tree. And in green you see there we have a particular positive dynamic. I will go through now a bit more on the details on this tree. If you go on page 4 you see the net income, the net income is driven by operational and extraordinary income dimensions. And you see overall on a year on year base we were able to increase our net income by CHF89 million. And from this CHF89 million, CHF42 million are coming from the EBIT and CHF49 million are coming from the financial results. And on the right side of the chart you see the dynamic in the financial result. It's mainly driven by, or mostly by one off-set. One dimension of it is the consolidation for new acquisition of PubliGroupe which has an impact of CHF82 million on the year on year base. Then we had an early termination of a financial leasing of the technical building, of the technical building in Zurich which has an impact of minus CHF33 million. Then interest rate swap as the non-cash interest swap which is depending on the direction of the interest development in the market have an impact of minus CHF10 million. And then other financial results of plus CHF10 million, which gives in sum this CHF49 million financial result. So overall a good development of the net income, half operational driven and other half if is this financial driven. If you go on slide 4, on slide 5, you see the development of the EBITDA. Also a strong performance on the EBITDA despite higher subscriber acquisition costs. And the EBITDA in Q3 increased by CHF44 million. And it's coming from Fastweb and mainly other companies of Swisscom. And this increase of EBITDA is driven by revenue, increase in revenue, service revenue of Swisscom Switzerland where we had an increase of CHF44 million and Fastweb with CHF18 million increase in the service revenue. Direct costs, as I mentioned, they increased too by CHF22 million. And this is mainly the result of higher subscriber acquisition costs in the market which leads to an overall increase of our EBITDA of plus CHF44 million, so strong EBITDA development. If you go on slide 6 you see the revenue development in Switzerland. And very shortly said it's driven by the bundles, the success of our bundles. And we have an increase on a year on year base of our revenue in Switzerland in Q3 of plus CHF44 million. From this plus CHF44 million, CHF15 million is coming from the service revenue. And this service revenue you can see also on the chart that CHF92 million are coming from bundles, so plus CHF92 million growth of bundles this is 23%. And we have a decline a reduce in our 1Play product portfolio of minus CHF74, which leads to this CHF15 million increase in service revenues. Other service revenues increased by CHF29 million and about half if coming from organic and the other half is coming from two small acquisitions, which leads to this increase of CHF29 million. If you go on slide 7 you see the development of our 1Play revenues in Switzerland. We had a decline as mentioned but it's not worsening, so in a stable situation. The decline is CHF74 million on a year on year base. CHF9 million is coming from mobile. But it is interesting to go in the details on the mobile side, and you see it on the right side of the chart. Because of these roaming price decreases which we made this year the roaming revenues went down by CHF23 million in sum, but the 1Play and that's interesting, the 1Play mobile revenues were increased by plus CHF14 million. So good, also good development on the single play mobile which is mainly driven by our infinity offering. There we have still a good dynamic of net adds of infinity. And we are able to have up-selling if they go to infinity. And we are also able to increase our ARPU if non-infinity customers migrate to infinity, so good dynamics on the mobile. The fixed business decreased by CHF65 million, and the main drivers of this minus CHF65 million is the 1Play voice, so we have still a declining of 1Play voice, clear substitution and also bundling. And the broadband and TV business in 1Play is also declining by CHF21 million. But there the reason is the bundling, the migration the bundles where we have a strong growth, so overall also 1Play business in a good situation. 8, our slide 8 shows you the bundle revenues in Switzerland continued growth. And the growth is CHF92 million. Interesting is to see from where it is coming this bundle growth, and you can see that the main driver behind the bundle growth is the triple play offering and the quadruple play offering. Triple play offering we had an increase of CHF71 million. But this is 37% increase, strong increase. And on quadruple play we had CHF23 million which is about 20% growth. So we have a clear tendency to higher bundles. And the main driver behind this bundle growth is TV, so our TV offering. On the right side we have some more information about our new product range, triple play range Vivo, where we have different products starting from a light product, Vivo light up to a Vivo XL. And the difference between these different products is mainly speed, the functionality of the TV. And the starting point for Vivo bundle is CHF69 million for the light and for the high-end product the XL product which has also fiber in it and speeds up to 1Gbps per second is CHF169 per month. We are very successful with Vivo, new Vivo products line. We launched it now six months ago. And only on TV we have almost 150,000 new – 150,000 TV customers on our new cloud TV product, so very successful, and even now the growth continues. If you go on slide 9, you see the development of our revenues generating units, stable, overall stable growth. In Q3 we had net adds of 71,000 net adds, 39,000 are coming from mobile. We have a small decrease on our fixed voice of 19,000 and we have an increase in broadband of 17,000 and on broadband of 44 – 34,000 – TV. And this is at 20% on a year on year base. If you look to the figures of our competitors which were published in the last days you can see that we have a good development even also on TV but also looking to broadband, I think a good market performance also in Q3. Let's go to page 10, there you see the revenue or the ARPU development, a bit more detail on the ARPU. On the left side of the chart you see the development of the service revenue. And you can see that plus 23% is coming from the bundle service revenues. And this is interesting to look a bit deeper to the development of this bundle service revenue. And you can see that the ARPU in bundles is approximately stable, stable ARPU, but we were able to increase our revenue generation units in bundles by 24%. Let's go to page 11, on page 11 some information about Fastweb, overall, good, really good result, strong Q3 for Fastweb. We have revenue an increase of CHF18 million. This is 5% on a year on year base in euro. And the growth of the service revenue is coming mainly out of the enterprise segment where we have CHF14 million increase and the wholesale segment where we have CHF7 million increase. The consumer segment has – is approximately stable. We have still a higher price dynamic in Italy, price or promotion dynamic in Italy on the commercial side. The net adds in Q3 are traditionally a bit slower because of the holiday quarter, let's say it like this, and the net adds were 105,000 coming from consumer and enterprise. But overall, so a good result on the net adds. So now I would like to hand over to Mario Rossi to give us a bit more insight on the figures.

Thank you. Good morning everybody. I think we can present once again very solid numbers in – for Q3. I start on slide 13, where we see the dynamics of the revenue breakdown. The net revenue for the group went up by 2% or CHF166 million to CHF8.6 billion. Without exceptional items you find the details on slide 29, the top line increased by 1.5% or roughly CHF130 million in the first nine months. It's a strong third quarter contribution of CHF62 million, driven by the following elements. CHF66 million comes from Swisscom Switzerland the decrease in single play revenues of CHF205 million was over-compensated by the increase of bundle revenue of CHF276 million. CHF38 million comes from Fastweb. All segments report a revenue increase, and CHF33 million are contributed in from other segments of which Swisscom IT services report an operational increase in third party revenues of close to CHF20 million. On slide 14 you see the breakdown by segment. The growth of Swisscom Switzerland of CHF56 million is driven by service revenue which increased by CHF66 million. Residential, in the residential segment we can now show increased revenue for the fifth quarter in a row. Residential is still benefiting from infinity and increasing number of revenue generating units, the ARPU mobile increased by 3%. We've reported this impact from migrate to infinity – from non-infinity to infinity this is about CHF8, CHF9 a subscriber. And we see during the last three months a slight increase within the infinity community roughly an impact from upgrades is around CHF1 per month. Year on year we have 233,000 more revenue generating units, 82,000 come from wireless,74,000 from broadband and 175,000 from TV. Line loss on wireline access is around 100,000. SME delivered CHF7 million more service revenues. There we had a small decline in wireless ARPU of 2.7%. And the corporate segment CBU view had lower service revenue year over year of CHF90 million. CHF10 million come from wireless, we see some price erosion. CHF9 million come from wireline and other services. Fastweb's underlying revenues increased by CHF38 million, Q3 with an increase – with a growth of CHF31 million was very strong with all segments contributing to this result. Enterprise plus CHF17 million, wholesale plus CHF10 million and other and consumable totaled CHF4 million. On slide 15 the EBITDA breakdown, excluding the non-operational items, they are on page 30 and 31 the details, the EBITDA went up by CHF60 million or 1.8%. CHF18 million comes from Swisscom Switzerland, the increase in revenue generating units over-compensated price erosion effects and led to higher service revenues as we discussed before by CHF66 million. The higher service revenue was partly compensated by higher direct costs, namely subscriber and acquisition subscriber/acquisition retention costs impacted CHF32 million. The EBITDA of Swisscom Switzerland in Q3 was below prior year minus CHF9 million. The roaming price decrease, the impact is approximately CHF20 million. And higher cost of subscriber acquisition retention costs of CHF60 million could not fully be compensated by the increase in revenues. The EBITDA of Fastweb increased by CHF42 million, of which CHF25 million is due to the lower purchases prices for ULL-based services and CHF17 million is coming from margin improvements. The EBITDA breakdown by segments on the next slide is a CHF21 million increase in residential. I think we discussed this impact before. SME is stable with a negative evolution in Q3. There we have an impact of higher subs. But once again the level of market share and margin in the SME segment is very, very high. And in corporate we have revenue – an EBITDA decrease of CHF19 million but here we see no acceleration in the EBITDA decrease compared to the prior year. Fastweb we discussed on the slide before. Coming to the group results, on slide 17, we discussed the EBITDA, depreciation and amortization increased by CHF32 million to CHF1.5 billion because of the higher CapEx level over the last years. Net interest of CHF165 million is CHF22 million better than in the previous year. Here we clearly benefit from the refinancing we did during the last few quarters at very favorable conditions. And the other financial results with minus CHF9 million is on previous year level, but contains several effects which compensate each other. In 2014 we had negative effects of CHF28 million coming from a non-cash fair value adjustment of an interest rate hedge. In the prior year we had a positive impact of CHF23 million so the difference is CHF51 million. Then in Q3 we had a positive impact of CHF82 million due to the revaluation of the so far 49% participation of LTV Yellow Pages in connection with the takeover of PubliGroupe. And the third item is a CHF33 million negative impact. We repurchased a strategic technical building which was under IFRS an early termination of a financial lease and this led to a negative impact of CHF33 million. Income taxes of CHF337 million led to an effective tax rate of 20%. Compared to last year the tax expense is around CHF40 million higher, and the corporate tax rate on the long term run we calculated it at 21%. Compared to prior year net income of the group went up by CHF76 million to CHF1.3 billion. The increase is mainly driven by higher operating results on the EBITDA level. Quick look at the CapEx on the next slide, first nine months CapEx went up to CHF1.7 billion. CapEx in Switzerland mainly driven by higher CapEx in the FTTH network went up by CHF100 million, CapEx at Fastweb of CHF494 million contained CHF82 million in the next generation network. An operating free cash flow, so if you look at the cash flow proxy EBITDA minis CapEx that stands exactly at the same level as in the prior year. And the positive free cash flow impact compared to prior year of CHF82 million comes from a better development of the net working capital compared to prior year, the impact there is CHF93 million. Finally I come on page 20 to the outlook we confirm our guidance the revenue remains unchanged at CHF11.5 billion. EBITDA which we increased after Q2 to above CHF4.4 billion can also be confirmed. And CapEx for the full year 2014 remain unchanged at CHF2.4 billion. In the context of the EBITDA guidance it's in our opinion important to take the following elements in your consideration. Out of the CHF40 million to CHF60 million expected EBITDA growth in the second half, we realized CHF45 million in Q3. Out of the CHF45 million EBITDA growth in Q3, CHF39 million related to the gain on the sale of real estate and exceptional items. For Q4 currently no other exceptional EBITDA is expected. However, Fastweb will have lower Q4 EBITA year over year due to the booking of EUR28 million in Q4 2013 for the full year 2013 of lower ULL fees. Overall it looks like it's going to be a good year. And if that is – indeed is so there is no reason why we wouldn't take CHF22 per share which we had already announced for this financial year. With that I hand over to the operator.

(Operator Instructions). First question, Frederic Boulan. Frederic Boulan – Bank of America Merrill Lynch: Hi, good morning. It's Frederic Boulan from Bank of America Merrill Lynch. Thanks for taking the question. [Indiscernible] firstly if you could update on our – update us on our view on Fastweb as a strategic asset and what do you make of Vodafone's reported interest in Metroweb? Secondly on the CapEx side if you could provide an update on where you are, the FTTS roll-out and expand a bit on the CapEx saving for 2015 and beyond in Switzerland. And lastly you seem reasonably relaxed about competition in mobile, if you could comment a bit more on what's happening from Orange Sunrise and of course Cablecom. Thank you very much.

On Fastweb we believe that we can increase the value of Fastweb and that you can see we had also a good development on the market share, also on the profitability side. So our intention is to increase the value of Fastweb. And then my message was always if we would have an excellent offer for Fastweb we would look to it, but that's not the case. So we want to develop Fastweb. On the side of Metroweb there are a lot of rumors about Metroweb, what is going on with Metroweb. We have – we are a minority shareholder of Metroweb with good minority rights. We are a good customer of Metroweb, so we are quite relaxed on the development of Metroweb. For the CapEx we are beginning with the roll-out of fiber to the street in Switzerland. We are gaining traction now with the deployment. And the CapEx in Switzerland they will stay high, also the next years, and they will stay on a level as we have it this year, because we have to invest in our network. We have strong competition on broadband and therefore we want to fast increase our ultra-broadband footprint in Switzerland. Some information about the mobile market in Switzerland, we think – we don't know all the figures of our competitors in Q3. But the ones we know we see that Cablecom had not really traction on the mobile side, but they have certainly an interesting offer in the market. But up to now, no big traction, we don't see actually churn on our capital base, very low churn figures. And also a good indicator for the performance in the mobile is always the relation between in and out porting, and we see a strong in-porting balance so that means I think we will have also a strong Q3 in mobile.

The next question, Nicolas Cote-Colisson. Nicolas Cote-Colisson – HSBC: Yes, hello. Nicolas Cote-Colisson, HSBC. One question on Fastweb and then there is one on Switzerland. For Fastweb do you think you are well equipped for 2015 when Telecom Italia will start offering Sky content over the TI network? And also do you see an increased take-up or interest for residential fiber services as you are expanding your network footprint with fiber to the street cabinet? And regarding Switzerland if we can get more granularity on your infinity plans. I understand you have more than 2 million clients. I was wondering what was the spread between the different plans, if you could see any change quarter after quarter in the split, and more generally if you could share with us some usage metrics. Thank you.

Okay, on Fastweb this cooperation on the TV side with Sky up to now we don't see really big changes there. We had very strong figures with Sky in October also. And it's not such a closed cooperation TI Sky as we have it with Fastweb, because with Fastweb we have really un-converged bundle with a common customer service and the TI offering is more a re-selling offering. On fiber to the street, your question to fiber to the street, what we see is, in areas where we invested in fiber to the street, that we are able to increase our gross adds in the region. So we have – it shows that the Italian market is looking for high speed. And therefore we are convinced the investment in fiber to the street will get the payback. Infinity type plans, as Mario mentioned, really good development in the infinity type plans. We don't see, really, movements in the existing customer base. If the customer was, on infinity, they are quite stable. And that Mario mentioned, we are even able to get a small ARPU increase in our installed infinity customer base. That's a bit on infinity. Then I would say good dynamic in infinity and stable development.

Maybe one addition on Italy and the FTTF rollout. Because the business plan contained three other elements. One is lower churn. That's confirmed. The churn rate on the FTTF network is comparable to the FTTH network. And significantly lower than on the ULL network of TI. Then the second element is premium products we can sell. Premium products on this good infrastructure. And the third element is, of course, the lower fees towards Telecom Italia. We pay lower sub-loop fees on this NGN network.

Next question, Karnany Vikram. Vikram Karnany – UBS: Yes, hi, thanks. Vikram Karnany from UBS. I've got a couple of questions. Firstly on infinity offers once again. Now it has crossed 60% of the base but we have seen the rate of increases slow down a bit in recent quarters. So please can you give us an indication, what's your expectation in terms of the long term target in terms of infinity take up to your overall postpaid base? And with infinity probably maturing in the future, do you see the need to come out with new, innovative offers in the markets like some of your competitors are pushing for a sim-only proposition. Is that the segment you think would be a driver for the growth in, say, beyond 2015? And then secondly, in terms of the one off related to the building sale. You gave an indication at the time of Q2 that the one-off factor driving the EBITDA in the second half would be around CHF40 million to CHF60 million. With building sales close to CHF40 million already in the third quarter, how should we think about these one-offs in the fourth quarter? Is it mostly done in the Q3 numbers or should we expect something more in Q4? Thanks.

Okay, we'll start with infinity then Mario can take the questions on the EBITDA one-offs. Infinity, still today we have, on a month base, an increase of 20,000 to 30,000 customers which are migrating to infinity. So we see still a good dynamic. My forecast was always that about 70% of our postpaid customer base will migrate to infinity. So that's one point. The second point is what we see in the Swiss market is that we have an increase of the postpaid percentage is Switzerland. So a lot of prepaid customers going to postpaid subscription because of all the smart phones is always on trend. So I think the customer base of postpaid will increase. And therefore, I also believe that we will have a good dynamic for infinity in the next year. But it is slowing down, as you mentioned.

Perhaps if I may add to that, because you also have to see the ARPU if infinity customers is well above CHF90. Whereas the rest that is not on infinity, that is more like CHF40 to CHF45. And the CHF40 to CHF45 again is well below the first rate of infinity. The lowest rate in infinity is CHF59 a month. So there's a limit in terms of how many customers will move over. And the last thing you want to do is to hunt people away, out of the current tariffs. So we will keep them on the current tariffs because if they are happy, we are happy as well.

Then on the one off, on the real estate gain, we have the CHF11 million in Q2 and CHF39 million in Q3. And in Q4, we don't expect any additional one off. So the guidance doesn't contain any additional one off for Q4.

Next question, Georgios Ierodiaconou. Georgios Ierodiaconou – Citi: Yes, I have a couple of questions. The first one is on Fastweb. And there were some news about a month ago that you will expand fiber to a [indiscernible] network for another 2 million homes in the following couple of years without changing your CapEx plan. If I'm not mistaking, right now there's around CHF100 million to CHF150 million a year going into FTTH investment – FTTC investment. In order for there to be a reduction like you planned before, that means you have to save something like a quarter of your recurring CapEx. So I was wondering where that could come from? And any indications as to whether there would be any impact on the business? And secondly, if you could perhaps give us a bit more clarity as to the split of the customer base in infinity. I believe in the past that you mentioned that the S and the M are the most popular tariffs. Is it possible to let us know what the percentage is on each of the five different products that you have available? Thank you.

Okay, to the question first with the CapEx and the mix of the CapEx. So it's right that we – that the CapEx will not increase for this expansion of fiber to the street. We made a reallocation of the CapEx. We really tried to put more CapEx on fiber to the street, reduced best investment in refreshing of fiber to the home and IT projects. But we are convinced that we can do this without a negative impact on our business. So we are convinced that this is a good prioritization. And maybe on the customer base of infinity, we don't give, really, the mix of infinity figures. Bart.

No, but as I mentioned before, you have to see the average ARPU's around CHF95 over the entire customer base, the lowest plan at CHF59 the highest CHF169. So pretty much in the middle. There is of course a bit of – in terms of the volumes, S and M are by far the most popular, so this is where the bulk of the customers are. And then it tails off quite quickly. Georgios Ierodiaconou – Citi: And if I could ask, have you seen any change in the mix between S and M? Because I saw you increased the price – the speeds for the M offers in the summer. And I was wondering, as people move into video, the S is only one megabit per second. Is that enough for people to use video or are you seeing a migration to M already?

No – [indiscernible] to key reasons why we did increase, selectively, some of the speeds for infinity was that this summer was the first time that the first customers who started two years ago on infinity had the right to move. Because the 24 month contract expired. And by giving them a little bit more speed, we tried to find a way to defend against the possible downgrade that they could have done otherwise. It has been quite successful because also in Q3, it's now the first quarter where you see that people who moved from an infinity plan to another infinity plan on average actually started trending slightly higher ARPU. Before, it was a slightly lower. But now it's slightly higher ARPU. So all over all, I think that has worked well. But as also Urs mentioned at the beginning of the presentation, there is not a lot of churn going on within the program at all. So the statistics are not very high in terms of absolute numbers.

And the good thing is what we really see is the customers are going to the amount for higher speed. And that's why we really invest heavily in our 4G network. Also LTE advanced. So we will have a good footprint next year on LET advanced, of 150 megabit per second. And I'm convinced that this will work.

Michael Bishop is next. Michael Bishop – RBC: Hi, good morning, it's Michael Bishop from RBC. I'd two questions, please. Firstly, following on the Fastweb discussion. You guided to pushing towards 30% FTTX coverage. But how do the economics beyond that change at all as the scope to go further within a similar CapEx envelope per home to what you've been doing? Or do the costs ratchet up quite quickly beyond 30%? And then second just in general on Swiss fixed line pricing. It seems that Liberty Global or Cablecom are being pretty rational and trying to take prince increases where possible. And on your slides, you're highlighting that you ARPU is broadly flat and a lot of the growth is coming from RGU growth. Do you think there's potential for that mix to change and put through price increases in the Swiss fixed business going forward? Thanks.

On the expansion plan of Fastweb, we did our calculation on – of the IRR on the initial plan which will be completed by the end of this year. We see, with the extension plan for additional 2 million household’s coverage, the IRR is still attractive. If we would add the next two stages, another 100 or 250 then the IRR doesn't become attractive any more. That means speaking today, after the second extension plan, we will not build out a third extension because the IRR is not attractive any more. So that's not [indiscernible].

On the pricing development in Switzerland for the fixed market, you're right, on some areas the market is quite rational. On the other side, you see also offerings from Cablecom where they give the broadband internet connection, let's say, for free, it's two megabit offering. And also on the TV side, there is a lot of movement. And so I think we will have still a price dynamic in Switzerland. And we have the substitution on the wireless – on the wired line side, on voice. However, I think we do a good job if we are able to keep our ARPUs in the bundling on the level where we are today. Because the ARPUs on our Vivo bundles are in a very good area. So our advantage is really to move more customers on bundles and to increase, with this, the ARPU in the bundles.

Next question, Usman Ghazi. Usman Ghazi – Berenberg: Good morning, gentlemen. Thank you for taking the question. I just have one please. So in the local papers in Switzerland, it's been reported that Sunrise has signed a last mile fiber access deal with Swisscom. I was just wondering what would have driven Swisscom to do that deal? Was it regulatory pressure or something else? Thank you.

No, – Sunrise were always a good wholesale customer of Swisscom. And the competition in Switzerland is not only between Sunrise and Swisscom. There is a lot of competition with cable operators and also fiber operators, in the utilities. And we made this deal with Sunrise because we think that it can increase our position in the wholesale market, on fiber to the street and wholesale offerings. That's the reason behind it. Usman Ghazi – Berenberg: So you don't see any risk of cannibalization of your own base from Sunrise having better trends in broadband, for example?

No, not too much. I think they will be able to gain market share in the cable turf. Usman Ghazi – Berenberg: Right, okay. And any – I know deal is commercial so you can't – you probably can't indicate what this is worth to you. But where will any revenues or anything from this deal be booked? Would it be booked in CapEx or offset against CapEx? Or would it be in revenues and EBITDA?

It will book – we will book it as prepayment in the balance sheet. And then the revenues will be booked in income in the segment wholesale and network. Over the period of the contract. So the impact on the EBITDA per year is quite limited.

(Operator Instructions). Next question, Jakob Bluestone. Jakob Bluestone – Credit Suisse: Hi there, just two quick questions. Firstly just on the roaming side. Could you maybe talk a little bit about the elasticity effects from the roaming cuts, particularly on the data side? You mentioned that your overall data traffic – which I think was voice – doubled. Was that a significant change in growth for roaming versus what you were seeing before the cuts? And then secondly, just following on from Michael's questions on fixed line pricing. Can you maybe just comment what sort of ARPU effect you expect from the price changes that you mentioned on page 8 in your slide pack? Do you – can you confirm that you expect those to be roughly ARPU neutral? Thank you.

First on the roaming side, you are right, we have high price elasticity on data. The new tariff plans were – with the new tariff plans we were able to double the usage on data. On voice, we see less price dynamic, on it. And less price elasticity, let's say it like this. And I think we will be not able to compensate the price decrease through volume increase. So that would mean that the revenues in roaming will go down. They will go down, we will be not able to keep the roaming revenues on the level where we are. And we will have a price dynamic also next year on roaming.

Which is also one of the reasons why we're replacing – in the infinity range, you get bundles of roaming minutes inclusive if you take a higher infinity product. So therefore those minutes, roaming minutes are, quote-unquote, given away for free to the customer. But of customer, but of course he pays a fixed monthly subscription for that right. So basically trying, the entire industry, to move away from pricing per minute or pricing per megabyte, into pricing per subscription. Perhaps on your question on page 8.

Page 8, on the bundles ARPU.

Yes, basically also there you have the move to bundles. Because the fixed line products are no longer being sold standalone. We're moving entirely into where we try to sell bundles instead of single-play products. And you may also have seen from the statistics, the ARPUs on the bundles are actually stable. The tripe play bundle's even increasing a little bit in terms of the ARPU. So no standalone products to be sold. Rather sell it in bundles. Because the ARPU's more stable. And secondly, the churn is far lower, so people stay with you for much lower. And that creates, ultimately, longer customer lifetime value.

George is having another question. Georgios Ierodiaconou – Citi: Yes, hello. I was wondering whether you could comment a bit on the review of the telecoms law. If there is anything that came out so far that would worry you or not? Any information that you could share with us would be very greatly appreciated. Thank you.

Okay, so that was not a – derivation of the law was not surprising for us. We were always in contact with them. The increase of the broadband speed, it will have a very limited impact on us. And we are on – the most areas, we have already this two megabit per second speed. So I'm really not surprised and no real impact on our results. Also not for the next years. But what is important is that our strategy is really to have a very fast and ultra-broadband coverage in Switzerland. And to go two meg is not ultra-broadband but it's the highest obligation for a country in whole Europe.

Then maybe one addition on the regulatory side. It was no change of the telecommunications act, it was just some amendments on the ordnance. And going forward, this year, the OFCOM will public to the [indiscernible] a view on the telecommunication – on the market situation in the Switzerland. And then it might be – its cast in the parliament next year and if – and we really say if – there would be a change in the telecommunications act, it would not be before end of 2017. So mid-term we don't see any changes.

Mark Murphy, next question.

Hi there, thanks for taking the question. I thought your comments in your presentation on full-year guidance were interesting. Are they – is there anything for us to be concerned about there? Just in terms of the level of exceptional items that you recorded this quarter. And in terms of Fastweb for Q4 possibly not bringing in as much EBITDA as 2013 levels?

No, there's nothing. We just wanted to give you some details that we don't expect any exceptionals in Q4. So don't expect anything in the guidance. And related to Fastweb, we wanted to point out that in Q4 2013, of the last year, we had this positive impact of a one off of EUR28 million which we booked in Q4. So it's just for comparison Q4 2014 and Q4 2013. But don't expect any bad news on Fastweb for Q4.

Usman Ghazi again. Usman Ghazi – Berenberg: Hello gentlemen, sorry, I have two follow ups. The first was just on infinity. So you've mention that you see is peaking at around 70% of the base. Now we're already at around 60%. What – and you've mentioned that the gap between the non-infinity customer and the infinity customer is pretty wide, thereby preventing upsell to some degree. So what happens once you are at 70% penetration? Because effectively after that, you won't be able to participate in any future growth in the postpaid market in Switzerland because your tariffs aren't going to attract any customers. What are you going to do at that point? Just any part from that would be useful. And then the second question was just on your LTE advanced plans. Again, how do you intend to monetize the LTE advanced investments given – if you come up with that CHF250 price point for 100 meg downloads, that's not really going to have much of an impact I can imagine. So is it about giving more speed for free at the same price point or something? Or any thoughts on that, thanks.

Okay, the best thing to monetize the investments in our mobile network is actually infinity. Because that's exactly the reason behind it. If we are able to make an upsell on our customers base. Because they are looking for speed. And that's one point. The second point is Switzerland is a quality oriented market. And you need a good network and then you are able to keep your churn figures low. We have extremely low churn figures because we have a good quality and good customers service levels. I think these are a lot of reasons to show that we can monetize the investments in these LTE networks. The second point is, the market is moving more on postpaid. And our strategy is really to increase our postpaid customer base by migrating customers to postpaid subscription. That's the strategy. And in an always-on world, the customer is looking for security, he's looking for flat rate offerings. So I think -- Usman Ghazi – Berenberg: Sorry just I think probably my question, I didn't come across as clearly as I should have. So my question is, your net adds in postpaid mobile, obviously a lot of that was driven by infinity. Both migrations as well as new customer coming. With infinity now expected to peak at 70% of your base, what is going to get you incremental net adds in the market? Because it's clear that the infinity momentum that was supporting your postpaid mobile net adds is maturing. Do you see a need to do something else with your tariffs to continue to benefit from the growth in the postpaid market over the next few years? Or is it just that you're happy for your customer base to reach 70% penetration of infinity and then you leave the rest of the growth to your competitors?

No, that's certainly not our policy to leave it to our competitors. We are working to get more customers on postpaid, we are working to get more customer on infinity. And if we see that we are – we get a weaker dynamic, we will do the needed actions. But I wouldn't say – I wouldn't give you now our ideas on the development of infinity. But one thing is certainly, that the dynamic, the strong growth dynamic of infinity is slowing down. That's right. But on the other side, we have to work now on our customer base, prepaid and postpaid to improve the ARPUs. Through intelligent offerings, through intelligent marketing and sales actions.

But you will have to see then in the market where the penetration is above 100%, but increasingly the origin of the net adds is a customer of a competitor. And there you manage to continue to grow an infinity program because it's not your own customer base with a low ARPU that you're trying to get on infinity. But especially also customer from your competitors moving to your infinity program as a better alternative to what they currently have.

(Operator Instructions). It seems that there are no further questions. So back to your Bart.

Okay. Well ladies and gentlemen, thank you for --

Sorry. Jacques de Greling. Do we have time for another question?

[indiscernible].

Thank you. Jacques. Jacques de Greling – Natixis Securities: Thank you very much. Regarding the postpaid market, could you elaborate a little bit upon the current stage of the sim-only market in Switzerland, please? Thank you.

Okay, so the sim-only market up to now is on a very low level in Switzerland. But if I look to really the decision points of [indiscernible] that the price – handset price is extremely important. It's also on the top of – it's our agenda. Therefore the Swiss market is still a very strong handset-driven market and the take-up of SIM-only is still low. And our intention is not to push sim only because we don't see a customer need it, a bit customer need in it. If we see that the market is really changing, we will certainly have a look to it. And we would be able to react fast. But today, I don't see really a customer need for it. Or a big customer need for it.

All right, Jacques? It looks like. All right, well we better – I would like to conclude this call. Thank you again for dialing in. If there are any further questions, feel free to contact either Louis or myself. And we're looking forward to talk to you soon again. Thank you and have a nice day.

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