Sunrise is Switzerland's second largest telecoms operator. It provides award-winning mobile voice and data, landline voice, landline internet and IPTV (internet protocol television) services to residential customers, business customers and other carriers across Switzerland through an integrated nationwide landline network and its Swiss mobile network.
Making the right calls
Making the right calls at the right time
CVC had followed the complex and challenging European telecoms market for some time and, in 2010, identified an opportunity to make a transformational investment in Sunrise, challenger brand to the dominant operator in Swiss telecoms, Swisscom.
CVC's strategy for Sunrise was centred around investing responsibly: to drive market innovation, enhance the customer experience, and take advantage of network improvements – all of which would generate greater value.
Sunrise was a subsidiary of Teledanmark (TDC), the Danish incumbent, which was looking to IPO later that year, so it was critical that CVC could execute any transaction with speed, certainty and in total confidentiality. In CVC's favour was a deep knowledge of Sunrise and its operating environment, a strong relationship with the past and present management team, as well as a good relationship with TDC and its ultimate shareholders.
The investment would be a landmark post-crash transaction, so securing stable financing quickly was key, as well as convincing the relevant regulators and stakeholders. CVC's Capital Markets team worked closely with CVC's Technology and Telecoms team and together they achieved the Europe's largest LBO financing post 2009.
Harnessing the CVC network across London, Brussels, Frankfurt and Zurich under the leadership of the Technology and Telecoms sector team, the firm delivered a fully-financed investment within six weeks. Work began on implementing the value creation plan immediately: back-office costs were reduced with the cost savings being reinvested in growth; the retail portfolio was expanded by 20%; pioneering flat rate tariffs and price plans, innovative internet-based TV services and the iPhone launch grew the customer base.
By 2012, Sunrise was performing to plan, with record new subscribers. Then, the outlook changed.
To increase and future-proof Sunrise's network strength, CVC entered the competitive spectrum auction and acquired one of the best allocations of any European operator. But soon after this, an aggressive price war amongst the Swiss telecoms providers led to network performance and customer service suffering as management sought to steady the company's finances. As a committed partner, CVC took decisive action.
Investment commitment and steadfast stewardship delivers customer satisfaction
Rather than selling, CVC helped attract a new CEO and heads of Network and Marketing, and worked with management to devise an adapted value creation plan.
- The team developed an innovative new customer offering and launched a quality improvement plan across the whole customer journey, leading to much higher satisfaction levels
- Sunrise's network capability was boosted by renegotiating with key suppliers
- CVC refinanced Sunrise's capital structure to facilitate the company's turnaround
Sunrise returned to EBITDA growth in 2014 and won industry awards for Best Telephony Network in DACH (German, Austria and Switzerland) and Best Customer Service in Switzerland that same year. With the company's reputation on the rise, world champion tennis player Roger Federer became brand spokesman for the company.
On the back of the strong investment CVC made to support Sunrise's growth, the company was listed on the Zurich stock exchange in 2015 as a strong, independent telecoms company.