« Swisscom is transitioning into an IT services firm »

This article was published in the September 2022 issue of the EPFL magazine Dimensions.

Christoph Aeschlimann, a computer science graduate from EPFL, was recently appointed CEO of Swisscom – another step in a successful career marked by a number of senior management positions in Switzerland. Aeschlimann, who will receive an EPFL Alumni Award at the 2022 Magistrale graduation ceremony, spoke with us about the growing role that digital technology is playing in our everyday lives and about how Swisscom, the country’s biggest telecom operator, is helping to shape the digital transformation.

You took over as CEO of Swisscom in June 2022. How has your life changed?

Before this appointment, I was the head of Swisscom’s IT, Network & Infrastructure Division – a position I’d held since joining the company in 2019. In that role I was responsible for developments related mainly to technology and innovation. Now, as CEO, my responsibilities are increasingly diverse and I interact with a broader range of people. I spend more of my time on management, for example, and on representing the company to outside stakeholders like politicians and the press. Investor relations is also a big part of my job now, and it wasn’t something I did at all in my previous role. On a more personal level, given everything that’s involved in being the chief executive, I have to make more of an effort to keep a healthy work-life balance and set boundaries when needed.

Swisscom is still 51%-owned by the Swiss government. Is there a difference between managing a publicly held company and one that’s partly state-owned?

Not really, no. Swisscom is a listed company with over 70,000 shareholders, and the markets we operate in – telecoms and IT services – are free and open. As the majority shareholder, the Swiss government sets an overall strategy for us every four years outlining things like our business goals, financial targets and HR objectives. But Swisscom doesn’t receive any government subsidies and is managed just like any other profit-seeking venture in the private sector. That said, we do operate in areas that are of direct importance to policymakers, such as fiber optics and mobile and land-line networks. However, the government’s interest has to do with the nature of these businesses and their impact on Switzerland’s competitiveness, and not with anything specific related to Swisscom.

Most of Swisscom’s revenue comes from telephone, television and IT services. What trends do you see in these different businesses?

We actually have four business lines: mobile telephony, fixed network, television and IT services. This last business line is the one that’s growing the fastest – and this is causing a real transformation in our organization. Until now, Swisscom has been mainly a telephone operator; today, we’re transitioning into a predominately IT services firm. Most of our revenue still comes from mobile and land-line services, but that won’t last much longer. IT services, and especially enterprise services, will take the lead in a few years.

In Switzerland alone, the volume of data being generated is growing by some 25% per year.

Is the growth in IT services due mainly to the pandemic, which led to an explosion in the use of digital technology both at work and at home?

The shift had already been under way for several years, but it’s true that the pandemic accelerated it. We’re seeing a change in both the number and type of customers: before we worked mainly with large corporates, and now we’re getting more and more requests from small and mid-sized businesses, which have a growing need for data storage and cybersecurity. And given the relentless expansion in the amount of data being collected, their needs will only increase. Cloud storage will be essential for retaining all those data, and artificial intelligence programs for processing them. Other growth drivers for enterprise IT services will be the internet of things and the metaverse.

Another consequence of the pandemic and the switch to working from home is that customers have become more demanding in their digital services. They expect everything to work perfectly all the time. That’s being reflected in the higher number of technical support requests and in the greater press and media coverage being given to network incidents.

The fast pace of digitalization is creating a number of challenges, especially in the areas of worker health and the environment. How is Swisscom responding?

In terms of worker health, we’re very aware of our duty as an employer to protect the well-being of our employees. That’s especially true for their mental health, since employees can have a hard time dealing with the isolation that comes with teleworking and increased digitalization, not to mention the way working from home can blur the lines between our professional and personal lives. At Swisscom, we’re setting up programs to help our employees cope.

In terms of the environment, we’re supporting the circular economy in a number of ways, such as by making it possible for customers to return their old mobile devices. Precious metals can be recovered from those devices and used to make new ones. We also offer a repair service so that broken devices don’t just get thrown away, and we sell used devices. Over a million mobile devices have been reused or recycled through our initiatives since 2012. In addition, the electricity we use comes from renewable sources – mainly solar and hydropower – and we’re taking steps to reduce the emissions from our vehicle fleet and buildings. We’ve already cut our emissions by 80%, and our goal is to reach 90% by 2025. Our efforts target the emissions not just from our own operations but also those along our entire supply chain. These are concrete commitments and changes we’re implementing to have an impact now – not in some distant future. This year, Swisscom was selected for a second time by World Finance magazine as the most sustainable telecoms company in the world.

One of the main challenges in telecoms right now is the transition to 5G. What are the benefits of this new technology?

This transition is being driven mainly by the huge expansion in data volumes that I mentioned earlier. In Switzerland alone, the volume of data being generated is growing by some 25% per year. And since we obviously can’t build 25% more cell towers every year to carry the additional data, we have to develop technology that can absorb the extra traffic. That’s where 5G comes in – it can both carry more data and transmit it faster. In addition, the internet of things will result in more and more connected devices. 5G can help there too since it allows a larger number of objects to be connected to a single tower. In short, 5G will provide technology that is essential for the digital transformation of our society.

We’ve dedicated considerable resources to cybersecurity.

Many citizens are concerned about the implementation of 5G, including the potential impact on public health. Are they right to be worried?

We take these concerns seriously and are examining the issue very closely. Many people are worried about the radiation emitted by 5G towers. However, several studies have shown that 5G emits less radiation than 4G. In addition, 5G towers send out waves only towards people who are actively using the technology. And for these users, 90% of the radiation they receive actually comes from their mobile devices and not the towers they run on. These findings were confirmed by experts including Prof. Martin Röösli at the University of Basel – one of the best-known specialists in the effects of wireless network radiation – and by a June 2022 study by the Swiss Federal Office for the Environment.

Swisscom is very active in the area of data protection and is a founding member of EPFL’s Center for Digital Trust. What efforts are needed to build and maintain citizens’ trust in digital technology?

Just to give you an idea of how important this issue is, every month our infrastructure experiences some 4.5 million cyberattacks! That’s a huge number and will only get bigger. We have systems in place that can intercept and block these attacks, but it’s still a serious problem – especially since the attacks are getting more and more sophisticated. We’ve dedicated considerable resources to cybersecurity and have set up a Security Operation Center that continuously monitors our infrastructure. We’ve also hired a lot of cybersecurity professionals, and our headcount in this area is growing steadily. Apart from Swisscom, most other large companies are also generally well-equipped to handle cybersecurity threats.

I think the key issue going forward will be to build awareness among small and mid-sized businesses. They’re typically less up to date on cybersecurity issues and allocate fewer resources to them. Our hope is that the Center for Digital Trust will serve as a forum for discussion and play this informative role, helping businesses to adopt best practices.

Our hope is that the Center for Digital Trust will serve as a forum for discussion and play this informative role, helping businesses to adopt best practices.

Swisscom is a member of EPFL Innovation Park and is closely involved with our School and research labs. Why are these ties with EPFL so important?

We opened the Swisscom Digital Lab at Innovation Park in 2016. Having a center right on EPFL’s site makes joint R&D a lot easier. We view our ties with EPFL as crucial, and they help bridge the gap between technology development and market application. Many promising young students work with our lab for their Master’s projects, giving them an opportunity to apply the theory they’ve learned to real-world problems. And because Swisscom has built up vast datasets, we provide an ideal testing ground for students to explore new ideas, such as in the area of artificial intelligence. What’s more, the lab is an excellent recruitment vector for us. Students who do well in their Master’s projects often stay on with Swisscom after they graduate.

It's true that Swisscom is a big employer of EPFL graduates. What kinds of engineers will be most needed in the future?

Mainly engineers in tech-oriented fields – especially IT infrastructure, software engineering and virtual technology. But we’ll also need people with skills in consulting and system integration to support the rapid growth in our enterprise IT services. I think in general Swisscom offers a broad range of opportunities for engineers coming out of EPFL. We’re looking for people who have a solid technical foundation, of course, but also who are passionate about innovation, who want to change things and drive progress, and who get excited about the latest technology.

What memories do you have from your time at EPFL?

That was a great period of my life. The School’s campus is amazing, and you get a top-notch education. You can also choose from a variety of extracurricular activities, such as joining a student club and taking part in the many fun events going on around campus. I have excellent memories of the festivals, especially Sysmic and Balelec. And I also really enjoyed spending summer days down by the lake. But like many people, my favorite place on campus will always be the Satellite bar!

Bio:
1977 – Born in Basel
2001 – Graduated from EPFL with a computer science degree
2017 – Appointed CEO of ERNI, a Swiss software engineering firm
2019 – Joins Swisscom as the head of the IT, Network & Infrastructure Division
2022 – Appointed CEO of Swisscom

Main photo credit: © Keystone / Christian Beutler