The operator reported net profit up 90.4% at CHF 1.57bn ($1.23bn) for 2003, compared with CHF 824m ($647m) in 2002.

Revenue remained flat at CHF 14.58bn ($11.44bn) in 2003, only slightly up from CHF 14.52bn ($11.40bn) in 2002. The decline in revenue in retail and wholesale traffic in its Fixnet unit and enterprise division was evened out by the growth in its mobile business and ADSL broadband offerings.

Unlike many of its European competitors that embarked upon expensive expansion policies during the late 1990s, Swisscom decided to opt for the conservative route and concentrate on its core Swiss market. This meant that economically the telco rode the downturn better than most and has emerged with very little debt and is cash rich.

This conservative policy did have its downside however, as Swisscom now has limited opportunities for expansion. Swisscom has however confirmed it is still interested in taking a stake in Telekom Austria after talks last year faltered over proposed pricing of the deal.

Late last year, Swisscom also denied reports that it planned to increase its stake in Czech Republic incumbent Cesky Telecom by buying out its consortium partner, KPN NV.

With no immediate acquisition in sight, Swisscom has therefore decided to return its cash pile to shareholders, promising that CHF 2.9bn ($2.28bn) will be paid in the form of a divided of CHF 13.00 ($10.22) per share, as well as spending up to CHF 2bn ($1.57bn) on a share buy-back.

Looking forward, the operator said it expects to report consolidated revenue of CHF 10bn ($7.87bn) and EBITDA of CHF 4.3bn ($3.38bn) for fiscal year 2004, based on current conditions and the successful disposal of its interest in Debitel, its German mobile operator.

Swisscom bought Debitel amidst the tech and telecoms boom for 3bn euros ($3.66bn), but when the operator backed out of Germany’s expensive 3G license auction, the acquisition was viewed as overpriced. Swisscom holds a 93% stake in the Stuttgart, Germany-based mobile operator and currently has 8.1 million German subscribers. According to recent reports, Swisscom is in ongoing talks to sell its stake to UK private equity firm Permira for 750m euros ($915.8m).

This article is based on material originally published by ComputerWire