Good morning, ladies and gentlemen, and welcome to Swisscom's Q3 Results Presentation. My name is Louis Schmid, Head of Investor Relations. And with me are our CEO, Urs Schaeppi; and Eugen Stermetz, our Chief Financial Officer. The first part of today's analyst and investor presentation hosted by our CEO consists of three chapters. Chapter 1, a quick overview with some highlights, the operational performance, and financial results of Q3. Chapter 2, with an update of our network situation, B2C and B2B performance and financial results in Switzerland, and then Fastweb’s Q3 results operationally and financially. In the second part of today's presentation, Eugen runs you through chapter 3, the financial results and the adjusted EBITDA guidance for the full year 2021. With that, I would like to hand over to Urs to start his part. Urs?

Yes, good morning, ladies and gentlemen. And I would like to start with the highlights on Page 4. So overall we had a good and successful third quarter and on the operational side, but also on the financial side. Some highlights, we increased our ambition, CO2 ambition for 2025. So we will be net zero over the whole value chain of our telecom in 2025. And we will save 100 million tons CO2 on the footprint of our cut. Let's call it the handprint of the 100 million, so ambitious goal on our climate goals. Then, the second point, maybe to highlight the out in the B2B market, we have a strong and unique market position. We are doing a lot of business in the IT space where we have a leading position on security cloud, but also on 5G IoT. So a strong, differentiated market position in the B2B segment. In our consumer business, we perform through service quality. We won, some award as an example, connect the shop test, service app test, that's an online app for sales, service, but also net test, we want the net test than several net tests in Switzerland. Fastweb has a solid performance on the consumer side, but especially also in B2B and wholesale. Then we will talk later on this fiber rollout of the -- the ruling by the Federal Administrative Court actually prolongs the regulatory uncertainty, which has an impact on how we will built the network in the face of this unclarity and also on the Salt partnership, we will discuss it later. And then, so this leads us to an outlook, which is unchanged on the EBITDA level. So we support the EBITDA guidance, which we have. We have a small change on the net revenue and CapEx, and the reason that there are two reasons behind it, the exchange rates which has an impact and then the on whole setting of the Salt partnership, which has an impact, Eugen will explain it later. If you go to Slide 5, you see our market performance. So we have a solid, robust market performance in Switzerland, positive revenue generation units in Italy. If I start with Switzerland, you see that the wireline business. So we have net adds which are slightly positive. We will have, we have good churn figures and also ARPU figures, Eugen will come later to it, but stable in the wireline business, that's a good performance. If you look how competitive these, this market is, driven through promotions by our competitors. Then we have a positive net adds on postpaid is 50k net adds positive, so a good moment on postpaid. And then in Fastweb, a good momentum on mobile, 128,000 [ph] additional mobile subscribers, positive moment on wholesale, and then a weak result, I would say, approximately stable in broadband, September was positive on net adds. So third quarter is always a bit weak in Italy also because of this, let's say it's, Ferragosto it's more a holiday quarter, so overall good market performance. If you go on Slide 6, you see our financial performance, also here solid underlying performance. If you go to the Q3 EBITDA development, you'll see that we have an underlying growing EBITDA business in Switzerland and in Italy, so CHF 11 million plus in Switzerland, CHF 60 million plus in Italy. The exceptional item we will explain them a bit later, but the -- in the exceptional, there are the, the exchange rates and the provision on the regulation and litigation. But overall good financial figures revenue, which went up by 1.7% and the net income which went up by 32% CapEx are in the region of CHF 1.6 billion. So overall a solid good financial performance, which also leads to this EBITDA outlook, which is stable. On Page 8, just some remarks to our business priorities. They are unchanged, so important for us is that we are continuously investing in our infrastructure and sustainability. The second priority is to deliver on our leading market position in Switzerland. So that means on the product side, on the customer service side, also through innovation as we have shown this week with our new blue offers, which really differentiate us in the market, that's important in a market, which is very promotion oriented that we have a differentiated value proposition. Then you have a strong commitment to our operational excellence. You will also see that we are on track to achieve our targets, our cost targets. And in Fastweb in Italy, it's important to invest in its further growth in Italy so that we can have growth in all segments. These are our priorities. On Page 9, you will see some more explanation to our ESG goals, to our environment and sustainability ambitions, and that I explained it before, so we have these two goals to be net zero on Scope 1 to 3. So that means on our old footprint, and then to save 1 million tons CO2 on the Scope 4, that means the handprint. And there we have the potential by using products like IoT, Smart Home, cloud, that our customers can really save CO2. I think another important point to show the commitment of Swisscom to sustainability. So we do this now over 20 years is also the figure that we were able to reduce our CO2 emissions by 90%. So, that shows the high ambition which we have, and our 26% compared to 2020. On Page 10, some remarks to our network strategy. On the left side, we see our, let's say outstanding coverage on which is technology on LTE we have coverage of 99% of the population with 5G, with the base version of 5G dynamic spectrum sharing we have 98%. And on 5G plus, we have today, 31% of the outdoor sites, which are on 5G plus. So you see that the footprint of 5G is rapidly increasing despite all the challenges we have in Switzerland to build or to get permission for UN [ph] 10. On wireline, what is our fiber rollout strategy? We see that there we have different phases. First we have the phase to rollout fiber to the home in the cities. Then we made the push to get full coverage in Switzerland on ultra broadband out there, we have more or less over 90% of Switzerland, and now an ultra broadband footprint, or 71% has speeds above 200 megabits per second. So you see the coverage increase. And now we are in the phase to rollout fiber to the home on this point-to-multipoint approach where we have now this uncertainties caused by the Federal Administrative Court. We will come later to it, but we remain on the ambition to continue to rollout on fiber to the home. To this COMCO investigation on Page 11, so this investigation is currently jeopardizing our FTTH rollout ambitions. The problem today is we have a lot of uncertainty, a lack of clarity. The investigation is around this point-to-multipoint technology, actually the technology, which is state of the art, in the telecommunication world which is used in all the different countries. And we have precautionary measures, which actually ask that we have to offer layer-1, offer from the central office, there where we are building the point-to-multipoint architecture. And what does this mean as an impact? We have to do some adoptions on the rollout, temporary adoptions until we have clarity. And this adoption means that Swisscom will only build point-to-point compatible network elements. So that means, we cannot do the whole rollout, but we will do the all the elements of the network rollout, which are point-to-point compatible until we have this clarity from the court. But we had to set the partnership with Salt on hold until we get more clarity, but important is the contract stays in place. And we are committed to much is the contract work. And so it's, we have to work, how we could actually implement it onto the new unclarity. What are next steps on this topic of this investigation? So we will appeal to the Federal Court and it's so fundamental that we have to appeal and we will have to do a review of our fiber rollout network strategy. It's too early to say what will be the outcome, but we will evaluate the different options. And then as soon as we have clarity, we will come back, I would say, it will be in the region of our full year results we will have more clarity how we do the rollout and we will issue an update there. On Page 12, to our B2C business, so overall a good Q3 for the B2C segment. Important for this business is to have a customer-centric user experience and you see on the left side, what we have done some examples of how we improve our value proposition each day. So we made big progress in online tools. So there My Swisscom App that’s an online app for customer service, we were awarded that as a, we get an award there on shops. We were the winner. I called before on blue, we improved our value proposition with this blue play. That's a huge media center where we can improve the value of our TV product, also on the reach of our TV platform is increased. So, you can also see it on Apple TV. So our strategy on the TV platform is to be an aggregate to give our customers the easiest access to the world of entertainment with an excellent user experience. And that's why we do such things like blue play, like cooperation with Apple TV. On the market side, on the right side of this chart 12, you see that how we performed in the market and we had a good market performance. Page 13, some remarks to the results of B2C, so solid performance, solid RGU base on wireline. Churn rate, which is lower than before. So that shows, that the on the loyalty side, we have a good performance, 8.5% churn on broadband. ARPU, you can see the ARPU stable. And also important to mention is that the fixed mobile converged subscribers are 46%. So that's important because also on a converge bundle and churn level are lower. So also to the stickiness of the market, it's important. Wireless with the same picture, lower churn, stable ARPU on the one side, but the, and that's the good message and increasing revenue generating base. On Page 14, our B2B business, just the two remarks here. We are well positioned in B2C market. We are strong in the projects business. You see some examples on the left side and you see also our standing in the security market. Swisscom is judged or recognized as the leader in security and with all the threats, with all the trends in this B2B business, I think that's an important pillar to differentiate ourselves. The performance of B2B on page 15, also here it's as expected that the development of the service revenue is as expected. We have described erosion of CHF 23 million in Q3 and you see on the right side how this CHF 23 million is actually allocated. So, CHF 14 million is coming out of the wireless business and CHF 9 million of this erosion is coming out of the wireline business. The Solution business is growing by 5.8% and you see on the left bottom on from which segment is positive contribution is coming. Page 16, operational excellence, we are on track to, to achieve our savings over a CHF 100 million. We had in the first three quarters, cost savings of CHF 99 million. Page 17 financial results of Swisscom Switzerland, so slightly increasing revenue. It went up by 0.3%. Service revenue went down by CHF 140 million so less than last year. And you see where we were able to grow. The, one of the big impact is certainly the Solutions business from B2B. EBITDA is stable, reported EBITDA is stable underlying I showed before was slightly higher. And we have an operating free cash flow proxy, which is CHF 59 million above previous quarters. Fastweb, some results are so far, some remarks so far so from page 18. So in the different segments, we were successful on the commercial fiber as an example, we were able to increase our ultra broadband growth. That's important because the churn is lower on ultra broadband customer and the ARPU was higher. We are leading in the net from ultra score, that's important also if we talk about the churn figures. And we made also innovation with a new route, an internet router NEXXT, which is a fantastic router and which differentiates us in the market. Enterprise, successful business in enterprise and wholesale. We are entering now the mobile enterprise market with 5G and then wholesale we were able to increase our lines so more revenue generating units in wholesale. Infrastructure 1.2 to mention Fastweb is easy to recognize as a leading ISP. For example, Netflix gave us the number one position in the ISP index. Then the financial results on page 19, in consumer segments our overall good figures. Churn went down and you see also on the right side, on the left side of this chart, the benefits of fixed mobile converged offer. So higher ARPU, lower churn, and then that's why Fastweb is also pushing this fixed mobile converge product. Page 20, the B2B and the wholesale business, so you see the positive moment in these two segments on enterprise and wholesale. So we are growing there and have a good momentum. The financials on Page 21 so let's say on the revenue we have 5% growth. On EBITDA we have a growth of 6%. And operating free cash flow proxy in the first nine months of plus CHF 123 million. So overall a good financial performance and in the guidance so as expected. Now I would like to hand over to Eugen for the financial results.

Good morning, everybody and welcome also from my side. Happy to dive into the numbers, as Urs mentioned overall and very good results and very good quarter. I'll go directly to Page 23 to talk about group revenues. Group revenues were up in the first nine months of CHF 142 million net of currency effects. That's an underlying plus CHF 107 million. Fastweb is expected and as in the past with the contribution of plus CHF 87 million, 5% growth, but also growth year-over-year from Swisscom in Switzerland with a positive contribution from B2C behind those plus CHF 46 million the typically mix of service revenue decline on the one hand, but higher hardware sales on the other hand, and also higher other revenues in particular, the famous decoupling effect in the first half of the year, that case has list here. On the B2B segment, minus CHF 29 million mix of service revenue decline on the one hand, IT solutions revenue up on the other hand, but not fully compensating for the service revenue to change. If you take a look at the quarterly evolution, there is no major changes to be talked about within Swisscom Switzerland. Q3 pretty much in line with what we saw previously in the first half of the year. One comment on Fastweb, we had, on Fastweb in the first quarter revenue was up by CHF 6 million. Growth was not strong in the first and in the second quarter. the reason for this is primarily that the Enterprise segment that is typically the main engine of growth had lower hardware sales in the third quarter which obviously has only a minor impact on it as we will see on the later pages. So far on revenue, I move on to Page 24 and dive into the revenue for Swisscom Switzerland. We saw CHF 20 million up; overall, I'm not going to spend so many words on this page as, in Q2, for those of you who attend the Q2 call. The reason is results came in by and large as expected and as explained in the second quarter, if anything, a bit better than expected. So I run you quickly through it. On the left hand side, we have the revenue reach for Swisscom Switzerland, starting with our service revenue decline. Now in the first month nine months, minus CHF 139 million compensating for that, the decoupling effect, which has run its course, as we explained. So that was an effect out of the first half of the year. And it relates to old tariff plans that have now run out over 24 months. And we won't see this effect again. Solutions revenue up CHF 35 million, with a nice contribution also in the third quarter of CHF 15 million. So that's clearly positive. The hardware increase, increase in hardware revenue plus CHF 41 million, already, that's mostly from the first two quarters, no big change in Q3. Same for wholesale, no big changes here, maybe one word on the plus CHF 25 million from other revenue there's two or three components in there. One is IFRS 15 reconsider, reconciliation that has nothing to do with decoupling effect with the old tariff plans that are, two or three years old, but as we run how their promotions, we build, under IFRS 15, new reconciliation items. And currently we have a number of those promotions out there. So that gave a positive effect, obviously that will turn back on us in the coming years. There was also a sort of one-off in there with a insurance premium refund, that contributed to that extra other revenue. And finally, our thanks to change one that similar business is speaking up again, and there also contributed, a bit to this number, although to be a fair change – I think Chuck came out in October, not in September, so it was not change bond yet, but the similar business in general. Okay. Top right of the page, the B2C of service revenue evaluation over the quarter. I explained in Q2 that we are more or less in a range of, if you take out the Roaming effects of a service revenue can run right quarter between CHF 40 million and CHF 50 million, Q3 confirmed that range. We have minus CHF 50 million in Q3 Roaming had almost no influence, what to anymore Roaming that's minus CHF 51 million. If you look at the bottom side of the page talking, about of the page to the right, no big surprises, no surprise on fixed voice lines, obviously no surprise on, fixed mobile convergence, no surprise either on Roaming, I would like to remind you that most of our tariff plans include roaming in the European union. So even if people travel more and people did travel more, this time than last year, it has no impact on our, on our Roaming revenues from retail or B2B customers. I quickly comment on the, other lines here, going from this to right. So on the wireline, B2C side change in RGU mix minus CHF 6 million, that's a bit lower than in the last quarter. The effect here is, some of the traffic tailwinds that we talked about before seem to have from their cause, but overall, it's not a huge change, price pressure in B2B as before. No big change. I move over to the wireless side, B2C change in RGU mix, same, same but different than usual effects, branches promotions et cetera. And finally, the only one that is definitely lower than in the previous quarter is, price pressure wireless on the B2B side that talked about that last time, we do have some visibility on upcoming contract renewals and, that led to increased ARPU pressure on the B2B wireless side, by and large, we do expect a pretty similar picture in Q4. I move on to a group EBITDA on Page 25 in the first nine months up by CHF 109 million underlying plus CHF 89, Fastweb is plus, CHF 36 million, 6% growth, also Swisscom Switzerland, up at CHF 49 million, B2C and B2B basically following revenue trends. I would say no big change and in the infrastructure and support functions, plus CHF 31 million that you see here reflects primarily the savings in the cost savings in IT networks division, and our support, in our support functions. One word on Fastweb, some of you I'm sure, certainly noted that we are up CHF 6 million on revenue but up CHF 16 million on EBITDA. One is that I mentioned before is lower hardware revenues on the revenue side, so very little effect on the EBITDA. And the other is that we had income from regulatory litigations on the Fastweb side. We do have that most of the time, if not all the time, its part of the business, but it was a bit higher in Q3 than in the other quarters. I move on to Page 26, diving into EBITDA Swisscom Switzerland. I mentioned on the previous page underlying plus CHF 49 million, we talked about revenue plus CHF 20 million and move on to direct cost subscriber acquisition cost, no big change compared to previous year in the third quarter. We did some, we did have some higher cost in the third and the second quarter, but that was more related to the previous year, because in the previous year, in the first half of the year, first half of the year due to COVID acquisitions didn't go as planned. Outpayments flat, there is a bit of a saving here in the third quarter, which might be counterintuitive because obviously there is higher roaming volumes but with higher roaming volumes, we have lower roaming prices. That's how the agreements are structured. And these lower roaming prices where retroactively applied also to the first and second quarter. So this explains the plus CHF 13 million, but as you see over the whole nine months that adds up to basically zero. Cost for goods purchased and others CHF 46 million higher costs in the first nine months. If you take at a look at the full nine months, that's basically higher hardware costs, which reflect the higher hardware revenues that we talked about on the revenue side. If you look at the third quarter in particular, there is a bit of an outlier with CHF 36 million higher costs that does not have necessarily to do with hardware and the quarter but last year in Q3, we had some one-off effects that led to lower expenses last year. So they chose up as a negative year-over-year comparison in 2021. In direct costs, we are quite happy with the performance here, savings of CHF 99 million compared, to be compared to an over annual target of CHF 100 million. So we are already stretching at the target with contributions from workforce expense and other operating expense as usual, quite a bunch of different initiatives across, across all the segments but adding up, in the end to the right number, maybe just two words to comments on that, one comment and one word of caution. One comment is these savings would be even higher if we had growth, fortunately growth in the Solutions business on the B2B side. So with revenue growth in the Solutions business, there's also additional costs in the Solution business. So that's all in that number probably next year, we are going to separate this for you in order to show the separate effects for the backup business and for the Solution business. But now it's all in that number. So that's the comment the word of caution is, you shouldn't extrapolate necessary these nine months figures to the full year, because typically in the fourth quarter, we have some seasonality and not the same amount of savings due to for example, marketing and communication expense which is typically very heavily skewed to the fourth quarter. I move on to Page 27, CapEx, CHF 1.6 billion in the first nine months basically on the same level as last year in Q3 Swisscom Switzerland CHF 372 million minus 9.3% year-over-year, there is no big structural effects behind this just the usual seasonality. Our FTTH rollout was maybe a bit slower than we expected. We had a bit lower IT expenses, but part of seasonal fluctuations to be clear, there is no impact in there out of the, COMCO investigation story that that was mentioned. And there is also not yet any impact there from the Salt agreement, because the Salt agreement was about to be implemented by the end of the September and is now on hold, so just normal course of business.

Finally, our tax rate is particularly lower in the first nine months of this year. It has to do with the exact same transactions that are just mentioned. And in addition, there is a new tax law in Italy that allows to do a step up on good win and transactions that are long gone. And that creates a tax asset that we use that possibility and created a tax asset. And this leads to a low tax rate for the first nine months of the year. Finally, Page 30 on the guidance let me do a quick, a quick review of what I told you in the first quarter because that's important to understand what we did here. So those of you who attended in the first quarter, they explained the impact of the Salt agreement on our numbers. And I talked about a full year impact back then, Q1 and explained that due to the IFRS 16 treatment of that deal, the Salt agreement has a positive impact on revenue, on EBITDA and on CapEx. So I explained that, and I also explained that in 2021 is a ramp up here. So it's not a full year, it's a ramp up here. So all the effects I talked about for Salt agreement for a full year has only a limited impact, limited positive impact in 2021. Now the impact is limited, but it's there. And now that the Salt agreement is on hold, it's gone for the fourth quarter. So this is the reason why we adjust the guidance. And I walk you through the individual line items. So on revenue, as Urs already mentioned, guidance is down from CHF 11.3 billion to CHF 11.2 billion. There is two pieces in there. There is the expected revenue from the Salt agreement in the fourth quarter, which is now not in the guidance anymore. And we also attracted the – exchange, the Euro, Swiss bank exchange rate to the currency prevailing rate in the same goal. And that gives an overall effect of minus CHF 100 million from about CHF 11.3 to about CHF 11.2. On EBITDA guidance so far CHF 4.4 million to CHF 4.5 million. Very important, no change on the EBITDA guidance, why there was, we expected in the first quarter, a positive impact from the Salt agreement, but it was fairly low numbers. This positive impact is now gone. That's compensating for that the ongoing business, went a bit better than expected in particular service revenue, as you saw, claiming quite fairly in the third quarter. So the guidance on EBITDA stayed the same CHF 4.4 million, CHF 4.5 million. On CapEx guidance. So far was CHF 2.2 million to CHF 2.3 million included in there was an expected CapEx reduction of a low double digit number out of the Salt agreement that is gone now. So we'll end up towards the upper end of these 2.2 to 2.3 guidance. And therefore we adjust the numbers to about CHF 2.3 billion. Finally and most importantly, no impacts whatsoever of all of this on our dividend guidance, which remains, CHF 22 per year. With that, I hand back to the Operator.

Thank you. [Operator Instructions] Thank you. I will now open the first one, which is Ulrich Rathe, Jefferies.

Yes, thanks very much. I have three questions please. Two very short ones there just clarifications, so the Fastweb litigation income, is it correct to assume that could be sort of a, CHF 6 million benefit beyond what you usually have. You mentioned that you have this quite often, so it's about CHF 6 million or so, second question is the other say is the, your slide you're highlighting from in Switzerland CHF 15 million insurance income at CHF 14 million average IFRS 16 effects. Could you comment a bit on the nature of these two items in particular, whether they are continuing items or somewhat sort of one-off items in the third quarter? And my last question is sort of the more substantial one, you're talking about sort of the review of the rollout strategy, the fiber rollout strategy. And it sounds if I understand the sort of indications correctly as if you want to maintain really at all cost, the fiber coverage target of 60%, but possibly on a different time scale and at a different cost, if indeed the regulator sticks to their view, switch with you my challenge, is that a correct summary or is there any chance that you would actually adjust also the coverage ambition as such. Thank you.

How are you? I’ll take the two. Eugen will take the rollout question. Okay. So starting with the income from litigation at Fastweb, please understand that we cannot comment on specific numbers for specific litigation there, counterpart is involved and these are individual these, but overall these are items that are recurring in the sense that we do have litigation income, most of the time it's just sometimes it's up and sometimes it's lower, but I can't, comment on specific numbers. On the other revenue in Switzerland, the IFRS 15 is a, IFRS 15 line is a recognition line that comes up when we have hardware promotions. So as we do have new and additional hardware promotions, this line has a positive effect. As we reach a certain steady state of hardware promotions, this comes becomes basically zero. And if at some point we would reduce our hardware promotions. This would become a negative number. So you should expect given that these events have further hardware promotions, you should expect that some numbers of these, what will be future numbers. On the insurance refund, this has to do that. We offer insurance to our retail customers. And it’s for the insurance company, this is a profitable undertaking. We get a refund after a while. Typically it's been given after three years, if I'm not mistaken, this is something that we probably come year after year. So it's a continuing effect. It was just that for the first time in this quarter we had before, the full CHF 15 million effects. Okay.

So on the question of the rollout strategy is, have I already explained, there are a lot of open questions we are talking about precautionary measures. So a lot of things are unclear. That's why we are reviewing our rollout strategy. Yes. On the one side it's important to increase the, the footprint, but it’s must also be on let's say, not for all costs. It must be on a way, we can digest it or we will certainly proof all or evaluate all the different options, how we could optimize our rollout. It's too early. It would be speculation on how we do it, but if we would go for a full point-to-point rollout, we would have to reconstruct some of the feeders, but that's a quite complex thing. Not each feeder has the same cost. So it's too early to speculate on this topic, important for us. It's a, now to evaluate all the different options, maybe we could also, go for more segmented rollout approach. We will come later, as soon as we have more clarity and get also more clarity from the regulating. We have, in our view; we have an optical product for layer-1. There are options on the point-to-point. We have with Salt deal actual which brings more competition. I think a lot of things are opening this rollout, fiber rollout topic. Important to know is also that we are fully aware that dividend is an important topic for Swisscom and certainly also the investors that's clear and we have also a solid balance sheet, so don't let speculate us today we will review the rollout strategy and come back as soon as possible when we have more clarity. And I think that it's our ambition to come back in February with our full year results.

Thank you very much.

Thank you. Next Georgios Ierodiaconou [Citigroup].

Hi good morning. And thank you for taking my questions. Firstly, a couple of follow-ups on Urs question on fiber. If it's possible, Urs can you give us an indication of, why is point-to-point, less efficient? Like if, is there an indication you can give us in terms of the additional cost you would have, if you were to go in some of the screen field things and go for a point-to-point solution and online point-to-multipoint? The second one is, just understand a bit more the process itself and you talked about potentially updating us in February with the full year results. Is there any chance or as part of the process that we get clarity before then, or is it more likely than not that this process will actually last for a while? Hence why you are talking about an updating February with some of the intermediate measures you are taking. And then my second question is on Fastweb, just to understand, I don't think there's a huge surprise that the broadband moment has slightly reversed, but if you could just give us any commentary around how you see the market developing and any actions you guys are taking to reverse the trend. Thank you.

Good. To the cost, if we would have to switch totally to point-to-point, it's too early to give you figures because it's strongly correlated to our rollout strategy, how we would do it and what is actually, what would be actually the major investment, we could use all the investments we made, so we don't have actually, let's say the appreciation on the, the old investments because we can review it, but what we have to do it is actually to increase the tax to make taking work to increase the tax. And then this is community per community different. So the situation is very different and taxes as an example, we don't have to do something on the [indiscernible]. If you are more in a rural area, you have to reconstruct some bucks. So that's why the rollout strategy will have a huge impact on this, this additional cost. And that's why we have to do now our homework. We have to get more clarity, how, what would be actually, what is the view of the regulation? So we'll certainly get in contact with the regulator to see what is this ids. And so that's right, is also, difficult to answer your certain. Second question on the timeline, I can't tell you the timeline. I hope that we have more clarity on within February. So that's a bit the view, but we will get in contact with the COMCO to see what is really their view, what kind of flexibility we have. And then we will come back at. On Fastweb, on the, the dynamic in the B2C market broadband. And yes, you are right that the whole market in Italy was weaker the broadband connections. I explained September was a bit better than August and July. We have a lot of promotion activities in Italy. This is also certainly driven by some preemption activities of competition because of the daily up market and for us, it is important that, we execute our strategy on the network side, the customer service side, the product side and have a combined products, fixed mobile combined products for the B2C market. But the B2C market will be certainly a bit more on the pressure that for sure. On the other side, we have a very good moment on B2B a lot of opportunities in B2B and also wholesale. So that's why we – you're optimistic that Fastweb will continue to have a good moment.

Thank you.

Next question Steve Malcolm, Redburn.

Yes, good morning guys. Thanks for taking the question. I've got a couple of, I can first, just on, on overall cost reduction, when I look put the sort of individual cost lines, it seems like the biggest contributor to your OpEx improvement year-on-year is the increase in capitalized costs in other income, which I think is probably two thirds of the CHF 99 million. So I guess when you're looking into sort of 2022 and beyond, do you think you can maintain that, benefit from that line in your OpEx performance, and then just going back to Fastweb and I take the point on your inability to sort of call it individual regulatory settlements. But if I look at the sort of capitalized and other cost line there it's quadrupled in Q3, I think it's gone from sort of normal run rate of 10 or 11 to about CHF 40 million. And if I kind of normalize that then Fastweb EBITDA would've been down by about 5% because can you help us understand, I'd say at the point you get regular settlements that I've look at the last three or four years. I think only once has it been anywhere near as high as that? So any more color on just why that, contribution to EBITDA has gone up quite so much in Q3 would be welcome. Thanks.

Okay. Hi, Steve so first on the capitalized cost, our personnel expense in the end is obviously net of capitalized cost. There is a gross number, then there is capitalized cost, which goes into CapEx, and then there is a net number. And that is the one we; when we think about cost reduction. As to our commitment going forward. Yes, we are commitment. We are fully committed to continue our cost reduction at program. We don't commit on individual lines though. So, every year different in that respect, but overall the commitment transforms. On other operating income in Italy, I mean you spotted it correctly the impact of the regulatory settlement, that we talked about is not totally immaterial and it shows up in that number that’s correct.

Okay. So, but it's all, most of the increases regulatory, it's not sort of increase in the amount of CapEx that you're or OpEx, sorry that you're capitalizing. Is that how we should think about it?

It's a mix of both numbers.

Okay. But from Q4, which should we expect it to kind of revert back to the sort of CHF 10 million to CHF 15 million that we're more used to seeing in Fastweb?

Yes. It should be normal.

Okay. Thank you.

Next question Jakob Bluestone, Credit Suisse.

Hi. Good morning. Thanks for taking the questions. Just to come back to this point around the…

Sorry we lost Jakob. Please, let me get him back. Sorry, Jakob your line is unmuted again. Thank you.

Great. Thank you. So just to come back to this point around the costs of, point-to-point versus point-to-multipoint, I was just wondering if you maybe a little bit more specific about what does it actually cost to reconstruct the feeder, which seems like, is sort of the main cost difference. If, you went down the sort of went more down the point-to-point root, I mean, is it €500 per home path, or what does it sort of typically cost in a non-urban area? And then just secondly just a point of clarification on that you said that one of your options was a more segmented rollout for fiber. Can you maybe just clarify what does that actually mean? So just to maybe elaborate a little bit on what are some of your options, not necessarily what will you do, but just what are the options that you have? And then just finally, if I can ask a question just on competition in Switzerland, I mean it looks like it was sort of a fairly stable quarter competitively for most of the quarter. But I think towards the end of the quarter, we saw some new tariffs from Sunrise UPC, for example, on the Yallo brand. So if you can maybe just to give a little bit of a comment around how do you see the outlook for competition in the Swiss consumer market? Thank you.

On the cost, it would be speculation if I give you our figure, but because the lead construction of the figure, feeder depends extremely strong on your rollout strategy. If you go in a city as an example, or in a rural area, there are communities where you don't have to reconstruct feeders. In a more rural area, it costs you quite a lot because you have to do construction work. So it's all correlated footprint is correlated also with this feeder cost. So I don't feel comfortable to give you our figure, because we should now look how we can, let's say optimize our rollout strategy. And for this, we need a bit time. We need also clarity on what the COMCO is really asking for or what is actually the space of manure. And so it would be speculation. That's a bit the topic, I can't tell you more today, unfortunately. Sorry. And on competition, yes. Competition in Switzerland is approximately the same as before. If you look to the new offer of Sunrise to Sunrise we, if you take the list prices, you see that there is actually no big change. It's also not a kind of price decrease. There are so many incentives to do more cross-selling and with our product portfolio, we are well positioned also against this new, Sunrise offer. And, also with the move we made now on the TV side with blue play and all the different feature, I think we are well positioned, Yallo is actually the fighter brand of Sunrise. That's clear. But also there, the impact of a SAK brand or low cost brand on the wireline business was quite small in the past. So it's more Yallo it’s more turning strong on the mobile. I think also there that, that there, we have not a fundamental change in the market dynamics through this launch of Yallo and we have Wingo to compete against such an offer.

Great. Thank you. If I can just ask a follow up or just one clarification. I mean, you mentioned earlier is the one of your options, in terms of Swiss fiber network architecture was segmented approach. What did that actually refer to? Was that just sort of picking specific regions or?

Yes, maybe, but its speculation. I don't want to say no something and tomorrow I will say something and tomorrow I will say something an obviously I would really, like to take the time to see what could we do the best and the best would be an optimization between the boundaries we have and certainly our competitive positioning in the market and also the CapEx. So we will not, we are a rational player at the end.

Very clear. Thank you.

And we have, what you should also see is that, we made our fiber to the home footprint rollout. Today, we have 70% in the Swiss mark to a speeds above 200 mega. So, we are in a good situation at the end, but yes we have to find a solution how we do this fiber rollout. And I think we have also strong argents. That's why it's not, that's why we talk about this unclarity. We have, I think good arguments point-to-multipoint, is the state of the art technology in the telecommunication world. If you go to more rural areas. So, I think we have to explain us also on this level.

Okay. Let's take next Polo Tang from UBS.

Yes. Hi, I've got some two questions. The first question is really just about, the competition commission situation. So you mentioned it's possible to offer layer-1 access on a point-to-multipoint network, given that this is what your agreement with Salt entails currently if this is the case, why did in it seven not take up this offer. So do you really need to change your network technology to satisfy COMCO? Or is it, just a case of changing commercial terms around layer-1 access? My second question is really just about your operating performance, you saw very strong trends in terms of postpaid net ads. It was like 50,000 in Q3. That was a big step up versus prior quarters. So can you just clarify, what drove that improvement? Thanks.

Well, I will take the first question and then I can take the second one. So on this agreement with Salt take co-invest, it's a kind of co-invest deal with Salt so they invest and in each seven is actually looking for a dark fiber axis without investment. So it's a pure layer-1 wholesale product they are looking for. And so that's the difference between these two things. So they are looking for a dark fiber and Salt with Salt we have a corporation or that's different. And the players in Switzerland, they have access to our network and also on a point-to-multipoint architecture, they have access. They can have these products that as other competitors are using it, and they are very successful in the market.

Maybe on the second question, strong that performance in postpaid value in the third quarter, that is primarily driven by two factors. One is a churn came down. You might remember in the first quarterly as pretty high churn that came down over the year and particular in the third quarter and second and most importantly, the Wingo performance was very good. So we seem to have a very strong competitive lesson here, also to compete against the other low cost offerings. So it's very much driven by Wingo and brand by the return on the Swisscom brand.

Thanks.

Next is Joshua Mills, Exane.

Thanks very much. One question and one clarification, just on the wholesale deal with Salt, are there any discussions ongoing with the company about alternative setups if this regulatory delay persists, so either giving them access to your existing fiber network or maybe finding small agreements to be done on a point-to-point basis rather than point-to-multipoint. Just want to understand whether we can see or expect any real host of revenue come through in 2022 without clarification on this. And then the second one was just on the annual impact for 2021. I think you said that the CapEx impact was low tens of millions from losing the Salt deal. And I can't remember if you noted the revenue impact, but it'd be great if you could clarify what that is just for this year in Q4. Thank you.

Okay, good. You take the questions on the impact; I begin on this discussion with salt. So, what I can tell you today is that, we have to put the agreement on hold. So the short-term impact is limited. Eugen, will explain the impact on the guidance, but we are committed to make the cooperation work. But to, for this, we need more clarity. It's actually like the rollout strategy. And we need a bit time, what would be the best way. That's what I can tell you today.

Maybe just add more additional comments. I may have not been entirely clear when the [indiscernible] talked about the Salt agreement. The rollout under the salt agreement is on hold, but the agreement is very much alive. And as what explained the spirit of the parties is and actually also the agreement is to deal with this situation. And both parties are committed to make the agreement work even under the changed circumstances. So the rollout, the originally planned point-to-multipoint rollout under the salt agreement is on hold, but not the agreement itself, which leads me to your question on the impact for 2021. So originally we planned an impact of this agreement in the fourth quarter. You understood correctly that, CapEx is in the low type digit. You saw that we adjusted the revenue guidance from 11.3 to 11.2 part of it is ethics. That's easy to calculate and the rest by and large is the salt agreement.

Great. Thanks very much.

Next question Ulrich Rathe, Jefferies

Thanks very much. Sorry for the delay. Thank you for letting me on, again. Just on this regulatory situation, once more a lot what we're discussing today and the way you answering questions sound as if a change to your strategy is likely because of what is happening at the moment, but could you talk about the possibility that we are going to be looking back in six months time? And it was a storm of the heat cup because the regulator essentially dropped the whole thing again. And what I'm really after is the sort of assessment of the likelihood of that rather than what you think should happen. So I'm, so I mean, obviously you think that should happen, right? It would be a normative comment, but in terms of how likely it is in your view, also based on your conversations with COMCO, that they essentially just turn around and say, what we looked at all this, we looked at the impact on it has on Salt. We looked at what Swisscom was telling us, and we looked at the competitive issues and ultimately we think this is a non-issue and we dropped the again, is that still a realistic possibility? Thank you.

It's hard to answer your question. We will have next week. I will have a first discuss with COMCO. Then maybe I see a bit clear, but we will not have clarity, a lot of clarity in the next weeks. That's a bit, my feeling, the likelihood that we get clarity on it, SAK fast is low that's why we are saying, we have also to work or reviewing our rollout strategy. And I think we have to have a parallel work, we have to get in a dialogue with COMCO to see what kind of opportunities and solutions we have. On the second path, we have to elaborate the best options for us. And then we can come back but the likelihood that we have clarity in the next weeks is low. So, yes that's what I can say.

Makes perfect sense. Thank you very much.

Thank you, Ulrich. And thank you to everyone. Timing wise, we are at the end and we would like to conclude today's conference call. If you should have any further questions, please do not hesitate to contact us from the IR team. Speak to you soon and have a great day. Bye-bye

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