Swisscom Q2 profit up by over a quarter

BERN, Switzerland (AP) — Swisscom AG said Wednesday its second quarter net profit rose 29 percent but warned that price erosion due to regulatory pressure would lower future earnings.

Net profit attributable to shareholders was 530 million Swiss francs ($492 million), compared with 412 million francs for the second quarter of 2008. Earnings per share rose to 10.23 francs from 7.93 francs.

Switzerland's biggest telecoms company achieved the increased profit despite a 2 percent drop in net revenue to 3 billion francs from 3.06 billion francs during the year-ago period.

Analysts at Zuercher Kantonalbank said the company had been able to effectively cut costs and financial expenses.

Swisscom, which is still majority-owned by the government, said the drop in earnings was partly the result of regulatory pressure to cut mobile roaming costs and price erosion outstripping new customer acquisition.

The company's Italian broadband subsidiary Fastweb reported an 11 percent rise in net profit to 473 million francs from 425 million francs.

Swisscom shares were down 0.8 percent to 353 francs ($327.38) on the Zurich exchange.